COLOMBO – Sri Lanka’s Securities and Exchange Commission (SEC) has approved amendments to the Colombo Stock Exchange (CSE) listing rules to provide greater flexibility regarding the minimum public holding (MPH) requirement for companies listing through the introduction method, the regulator said.
The flexibility is given to boost the share liquidity in the market under its 12 key strategic initiatives, the SEC said.
“The amendments reflect a joint effort by the SEC and CSE, underscoring strong collaboration between the regulator and the Exchange to address evolving market needs while maintaining market integrity, transparency, and investor protection,” the SEC said in a statement.
The new amendment will allow entities seeking listing by way of an Introduction on the Main Board or Diri Savi Board without minimum public holding at the time of submitting the initial listing application.
However, those entities will have to follow a phased minimum public holding compliance framework. The amendment allows firms to achieve minimum 50% compliance with minimum public holding requirement within 12 months and full compliance within 18 months from the date of listing.
It will also allow non-public shareholders who have held their shares for a minimum period of eighteen months prior to the date of the initial listing application to divest up to a maximum 2% of their shares each month during the six months commencing from the date of listing.
This, however, is subject to a lock-in requirement of 30% of their respective shareholdings as at the date of listing, until minimum public holding compliance or 18 months from the date of listing, whichever occurs first.
Before the amendment, non-public shareholders cannot divest their stakes for the first six months from the date of listing.
Under the new amendments, entities should include clear disclosures in the introductory document confirming their obligation to meet non-public shareholders requirements within the prescribed timelines.
The SEC also said it has introduced certain enforcement actions which will be implemented in the event of non-compliance with the minimum public holding requirement.
“The revised framework is expected to encourage more companies to consider listing via introduction, thereby broadening market participation, improving liquidity, and contributing to the overall development of Sri Lanka’s capital market,” the SEC said.
“Issuers, investors, and market intermediaries will benefit from a more enabling yet well-regulated listing environment.”
Sri Lanka’s main The All Share Price Index (ASPI) gained 41.7% year-on-year in 2025 amid lower interest rates maintained by the Central Bank. Lack of share volumes has been one of the major issues investors have faced when trading shares in Sri Lanka.
-economynext.com
Comments are closed, but trackbacks and pingbacks are open.