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Extending trading periods of warrants restricted
April 02, 2012
The Securities and Exchange Commission of Sri Lanka has directed that the warrant holders should not be allowed to transfer the risk attached to the terms of such share warrant after the risk event has occurred, by extending the cut off date.
As per the SEC directive dated 2nd April 2012. the Commission has considered the impact on the investors in the secondary market due to corporate actions taken by public listed companies relating to warrants.
Under Section 5.10.2 of the Listing Rules of the Colombo Stock Exchange, a listed company is required to announce to the market the terms and conditions of warrants at the time of issuing it. The terms and tenure of a warrant is determined by the risk attached to such financial instrument. Therefore the warrant holders should not be allowed to transfer the risk attached to the terms of such share warrant after the risk event has occurred, by extending the cut off date.
All Listed Companies will now be required to prohibit the trading of warrants in the secondary market after the initial cut off date & the Colombo Stock Exchange is further directed to inform all public listed companies of this prohibition.
CSE Listing Rules Ameded
Securities and Exchange Commission of Sri Lanka (SEC) says that it is introducing additional conditions to the general listing requirements for public companies seeking listings on the Colombo Stock Exchange (CSE).
Accordingly the CSE is directed to amend Section 2.1 of Listing Rules of the Colombo Stock Exchange as follows with effect from 1st April 2012.
- In respect of listings by way of an Introduction – To delete the provisions relating to “Listing Of Equity” by way of an introduction as a means of listings with effect from 1st April 2012. However all applications received under this category on or before 31 March 2012 shall be accepted.
- In respect of listings by way of an Offer for Subscription – To introduce a lock in period for all shares issued prior to an Initial Public Offer (IPO) in the following manner:
- Shares held by the promoters and all other shareholders prior to an offering to the public shall be ‘Locked-In’ for a period 9 months from the date of listing of shares on the CSE.
- Where a public company has allotted shares within in a period of one year prior to the date of Initial Listing Application all such shares shall be locked in for a period of 12 months from the date of listing on the CSE.
- Further in respect of listings by way of an Offer for Sale – Where a company makes an application to list under this category the shareholder/s considering divesting their shareholding through an Initial Public Offer (IPO) should have held such shares at least for a period of 18 months prior to the date of the Initial Listing Application.To introduce a lock in period for all shares held by promoters and other existing shareholders, other than shares offered and accepted by the public through an Initial Public Offer (IPO) in the following manner:
- Shares continued to be held by the promoters and all other shareholders at the time of the initial Listing Application to be locked in for a period of 9 months from the date of listing on the CSE.
- Where a public company has allotted shares with a period of one year prior to the date of the Initial Listing Application such shares shall be locked-in for a period of 12 months from the date of listing on the CS
