Maintenance of Minimum Public Holding as a Continuing Listing Requirement
Tuesday, 21 January 2014 00:01
The first presentation was conducted by Ayanthi Abeywickrama, Director Legal and Enforcement at the SEC, on the rules on Minimum Public holding as a continuous listing requirement for public listed companies.
With the introduction of Minimum Public holding rules, within the next three years companies listed on the Main Board have to comply with a minimum public holding of 20% in the hands of 750 public shareholders unless the market capitalisation of the public float is above Rs. 5 billion with a minimum public holding of 10% in the hand of 500 public shareholders.
For Diri Savi Board companies, public holding requirement is only 10% in the hands of 200 public shareholders. The presentation further covered the importance of having such rules to improve the liquidity of the Colombo Stock Exchange and to curb certain market abuses.
Code of Best Practices on Related Party Transactions
The second presentation was made by Harshana P. Suriyapperuma, Director Corporate Affairs at the SEC, on the Code of Best Practices on Related Party Transactions.
The presentation comprehensively covered the salient features of the Code including the nature and functions of the Related Party Transactions Review Committee, the circumstances within which the shareholder’s approval is needed for certain related party transactions, immediate and annual disclosures on related party transactions and exemptions provided within the SEC Directive.
Disclosure Requirements for Directors’ Dealings in Shares
Dhammika Perera, Officer-in-Charge/Deputy Director General of the SEC, made the final presentation on new rules on Disclosures of Directors’ dealing in shares. He emphasised that said rules were introduced to minimise ambiguities in the existing rules on timely disclosures of directors’ dealings.
The other salient feature of the rule is the inclusion of ‘Chief Executive Officer’ to the existing definition of directors’ dealing in shares. The Deputy Director General communicated that these are the maximum number of days allowed for disclosures by the listed entity, but entities are very much welcome to disclose even on the day of the transaction.