Approvals under Section 28A of the SEC Act
As per Section 28 A of the SEC Act any allotment of shares done by a public company within a period of one year immediately preceding from the date of listing will fall within the ambit of Section 28A of the SEC Act. Further, as per the Circular No 01/2011 dated 07th February 2011 and Circular No 03/2011 dated 24th February 2011 shares allotted by a company within a period of one year immediately preceding from the date of listing will be locked-in for a period of one year from the date. Approvals under Section 28A of the SEC Act in 2013
Approvals – off the floor Share Transactions – Section 28(1) of the SEC Act
Approvals – off the floor Share Transactions – Section 28(1) of the SEC Act ”no person holding securities in a public company listed in a licensed stock exchange shall without the prior approval of the Commission buy, sell, gift or otherwise deal in such securities except in compliance with trading procedure adopted by such licensed stock exchange”. Fees Application form
Approvals under Section 29(A) of the SEC Act
- No listed public company or any public company which has applied to obtain a listing in a licensed stock exchange, shall make any issue of securities unless the issue has been approved by the Commission or any person authorised in that behalf by the Commission.
- For the purposes of this section, “issue of securities” means-
- in relation to a public company which has applied to obtain a listing, an introduction, an offer for subscription, an offer for sale or any placement of securities on a licensed stock exchange;
- in relation to a listed public company-
- new issues or offer for sale of securities to the public, whether such issues or offers for sale are by way of public issues or otherwise or any placements of securities;
- rights issues of securities;
- bonus issues of securities;
- schemes of arrangements, schemes of reconstruction, take over schemes, share option schemes and acquisition of assets by way of issues of securities.
Issuance of UNLISTED SECURITIES by a listed public company or a public company which has applied to obtain a listing
- Please refer Circular No 16/2008 for the approval criteria with regard to the issuance of unlisted debt securities by listed public companies.
Issuance of LISTED SECURITIES by a listed public company or a public company which has applied to obtain a listing
- Please refer Section 2 of the CSE Listing rules with regard to the issuance of listed debt securities by listed public companies.
- Please refer Section 5 of the CSE Listing rules with regard to the further issuance of listed shares by listed public companies.
Waiver of Section 5.4 of the CSE Listing Rules
Issue of Shares by Private Placement
- A Private Placement is an issue of shares to an identified investor/s or category of investors other than by way of a Rights Issue offered pro-rata to existing shareholders or a general offer to the public for subscription.
- The percentage of shares to be issued by a Listed Entity through a private placement shall not exceed 20% of the shares in issue, immediately subsequent to such issue of shares through the private placement. The application of this rule may be waived by the SEC under exceptional circumstances.
- The entity shall not issue shares through a private placement during the 24 month period immediately following such issue of shares. The application of this rule may be waived by the SEC under exceptional circumstances.
- The Entity shall obtain shareholder approval by way of a Special Resolution for the issue of shares through a Private Placement at a General Meeting.
- A listed company shall be required to enter into an agreement with the licensed stock exchange in which it is listed, that the securities of such company shall-
- Remain on the official list solely at the discretion of such stock exchange; and
- Not be withdrawn from the official list, without the prior written approval of such stock exchange.
- A licensed stock exchange shall have the right to remove any securities of a listed company from its official list at any time, for any reason which such licensed stock exchange considers as appropriate. Any person aggrieved by the decision of a licensed stock exchange to remove any securities from it’s official list, may appeal to the Commission against such decision within a period of fourteen days from the date on which the decision to remove the securities was communicated to such person.
- On consideration of an appeal made to the Commission under paragraph (2), the Commission may where it is satisfied that in the interest of the public or for the protection of investors it is necessary to do so, direct the licensed stock exchange to restore the listing of the appellant company or where the Commission is not so satisfied, dismiss the appeal. The licensed stock exchange shall restore the listing of the company immediately upon receipt of the instructions from the Commission.
- The Commission shall have the right on its own to direct a licensed stock exchange to remove the securities of a listed company from its official list, where the Commission considers it necessary to delist such securities in the interest of the public or for the protection of investors. Any licensed stock exchange which is directed by the Commission to remove any securities from its official list shall immediately carry out such directive. The decision of the Commission to direct a licensed stock exchange to remove the securities of a listed company from the official list shall be final.
- Where any listed company wish to delist its securities from the official list of the licensed stock exchange in which such company is listed, it shall, having informed in writing of its decision to the security holders and the licensed stock exchange, forward an application to the Commission within two weeks of passing of the resolution referred to in paragraph (2)(a) of this Rule in the case of delisting its equity from the official list and in the case of any other security other than equity, within two weeks from the date the Board of such company resolved to delist its securities from the official list.
- An application made to the Commission under paragraph (1) shall be accompanied by-
- In the case of delisting of equity from the official list, a copy of a resolution passed by not less than seventy five per centum of the shareholders present at such meeting approving the delisting and the price at which the directors of the company has arranged to buy the securities of any shareholder who wishes to sell their securities;
- A list containing the names of all security holders as at the date of making the application, together with (their addresses and security holdings, certified by the Secretary of the Company;
- Copies of the audited or certified accounts and balance sheet of such company for the three years preceding the making of such application;
- In the case of delisting of equity from the official list, copies of press notices published in all three languages informing the general public of the resolution to delist as referred to in sub paragraph (a), and in the case of delisting any other security other than equity, copies of press notices published in all three languages informing the general public that the Board of the Company has resolved to delist.
- Any person aggrieved by the resolution of a board of a company to delist its securities or in the case of delisting of equity, by the resolution of the shareholders of a company to delist its securities may appeal against such shareholders of a company to delist its securities may appeal against such resolution to the commission, within fourteen days of the passing of the resolution concerned.
- Upon the receipt of the written information pertaining to the delisting of securities from the stock exchange, the stock exchange shall immediately take steps to suspend the trading of the securities of the applicant company, until the Commission makes its decision on the application made to it.
- On receipt of an application made under paragraph (1), the Commission shall immediately call for any recommendations or observations as the case may be, on such application, from the licensed stock exchange in which the applicant company is listed, and a list containing the number of transactions and the volume and prices of securities transacted during the twelve months preceding the making of application.
- It shall be the duty of a licensed stock exchange to submit the information requested for under paragraph (a), within ten days of being so requested by the Commission.
- The Commission, having considered the application together with any recommendations or observations as the case may be, made by the licensed stock exchange, and where it considers it necessary, having given the applicant an opportunity of being heard shall, within twenty one days of the receipt of such application, inform the applicant of its decision.
- In the case of delisting equity from the official list, the licensed stock exchange shall, after having satisfied the successful completion of the sale of securities of the shareholders who wish to sell their securities, inform the Commission and obtain its approval before the removal of such company from its official list.
Approvals for Global, Regional and Country Funds
Every Global, Regional and Country fund seeking registration in Sri Lanka to invest in securities of companies listed in the Colombo Stock Exchange, must first obtain the approval of the Securities and Exchange Commission of Sri Lanka. Approval for a fund is granted subject to the condition that it complies with the criteria for the approval of Country and Regional Funds stated in the Gazette Extraordinary No.1232/14 of 19th April 2002 amended by Gazette Extraordinary No.1248/19 of 08th August 2002 and Gazette Extraordinary No.1685/2 of 21st December 2010 pertaining to investments by non-residents in companies incorporated in Sri Lanka, Exchange Control Regulations, Financial Transaction Reporting Act No.06 of 2006, Prevention of Money Laundering Act No.05 of 2006 and the Law relating to Securities in Sri Lanka.
Administration of the Takeovers and Mergers Code
The Takeovers and Mergers Code of 1995 as amended in 2003 (Cod