The Colombo Stock Exchange (CSE) will see Maldivian and Chinese securities listed on it when the Securities and Exchange Commission (SEC) introduces 'Cross Border Listing Rules' in a bid to facilitate foreign firms keen to go public in Sri Lanka, SEC sources said.
"Some Maldivian and Chinese companies have expressed interest to publicly list in the Colombo Stock Exchange (CSE), which is why we are keen to introduce some cross border listing rules," a SEC source told the Business Times on the sidelines of a meeting organised by them to discuss the Capital Market Development Plans 2011 - 2013 this week.
Indrani Sugathadasa, Chairman SEC in her presentation said that the SEC in a bid to encourage and facilitate the widening and broadening of issuer base will introduce cross border listings this year.
Replying a question on Price Curbs (Price Bands), she told the gathering of share market stakeholders that the SEC might decide to remove the Price Band if they feel it's not necessary.The SEC source said that the SEC plans to give some concessions to the Price Curbs, but not altogether do away with it. "We're studying to grant some concessions to the Price Band such as shortening the days that a security will be in the Band -e.g.; from the current 15 days to may be 10 days," he said. He said the SEC is now scrutinising the market since the price curbs and will announce a decision soon.
On broadbasing the share issuer base, Ms. Sugathadasa told the Business Times that the SEC will facilitate and support alternative methods of increasing listings on the CSE and also simplify and streamline issuing process of corporate bonds to encourage more issues.
She said the regulator plans to facilitate stepping up of liquidity and introduction of new products in the capital market. "Finalization of rules for Exchange Traded Funds is on the cards as well as introducing minimum public float requirement," she said.
She added that the SEC will follow up on the Corporate Bond Market Development Implementation plan approved by the commission and will also develop a 3-year plan for gradual reduction in transaction costs.
"We plan to encourage trading of Government Securities, while facilitating introduction of new products such as Commodities trading and also introduction of Derivatives," she added.
Cross border listings are a boon especially in terms of the liquidity of the market. As SL is a small country it would naturally have a limited number of listed entities. As such, foreign firms will hopefully add much needed weight. Sunil
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