section 2 listing of shares and debentures 2.1 listing … · time of listing, the applicant entity...
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SECTION 2
LISTING OF SHARES AND DEBENTURES 2.1 LISTING OF SHARES
2.1.1 GENERAL REQUIREMENTS
(a) Shares may be listed on the Exchange provided that the listing is for all
shares issued and to be issued by the Entity. (b) In the event of Offer for Subscription or Offer for Sale shares shall be issued
for cash only.
(c) In the event shares are to be listed by way of an Introduction, such shares should have been allotted at least six (06) months prior to the date of application to the Exchange, unless such shares have been offered in terms of a Prospectus as required by the Companies Act.
(d) In the event of an Offer for Subscription;
(i) Subject to Rules 2.1.1(d)(iii) and 2.1.1.(d)(iv) below, shares held by Non Public Shareholders prior to the date of the Initial Listing Application shall be locked-in for a period of six (6) months from the Date of Listing the shares of the Entity.
(ii) Subject to Rules 2.1.1(d) (iii) and 2.1.1. (d)(iv) below, shares held
by Public Shareholders prior to the date of the Initial Listing Application shall not be locked-in.
(iii) shares acquired by way of a transfer by Non Public Shareholders
or Public Shareholders during the period of twelve (12) months prior to the date of the Initial Listing Application shall be locked in for a minimum period of six (6) months from the Date of Listing the shares of the Entity or twelve (12) months from the date of acquisition of such shares, whichever is longer.
(iv) shares allotted to Non Public Shareholders or Public Shareholders
during the period of twelve (12) months prior to the date of the Initial Listing Application shall be dealt with according to the discretion vested in the SEC in terms of Section 28A of the SEC Act.
(e) In the event of an Offer for Sale;
(i) the shareholders who intend to divest their shareholding through
the Initial Public Offering should have held such shares for a minimum period of eighteen (18) months prior to the date of the Initial Listing Application.
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(ii) Subject to Rules 2.1.1(e)(iv) and 2.1.1.(e)(v) below, shares held by Non Public Shareholders prior to the date of the Initial Listing Application, which have not been divested through the Initial Public Offering, shall be locked-in for a period of six (6) months from the Date of Listing the shares of the Entity.
(iii) Subject to Rules 2.1.1(e) (iv) and 2.1.1. (e)(v) below, shares held by Public Shareholders prior to the date of the Initial Listing Application shall not be locked-in.
(iv) shares acquired by way of a transfer by Non Public Shareholders
or Public Shareholders during the period of twelve (12) months prior to the date of the Initial Listing Application shall be locked-in for a minimum period of six (6) months from the Date of Listing the shares of the Entity or twelve (12) months from the date of acquisition of such shares, whichever is longer.
(v) shares allotted to Non Public Shareholders or Public Shareholders during the period of twelve (12) months prior to date of the Initial Listing Application shall be dealt with according to the discretion vested in the SEC in terms of Section 28A of the SEC Act.
(f) In the event of an Introduction;
(i) subject to Rules 2.1.1(f)(iii) and 2.1.1.(f)(iv) below, shares held by
Non Public Shareholders prior to the date of the Initial Listing Application shall be locked-in for a period of six (6) months from the Date of Listing the shares of the Entity.
(ii) subject to Rules 2.1.1(f) (iii) and 2.1.1. (f)(iv) below, shares held by
Public Shareholders prior to the date of the Initial Listing Application shall not be locked-in.
(iii) shares acquired by way of a transfer by Non Public Shareholders
or Public Shareholders during the period of twelve (12) months prior to the date of the Initial Listing Application shall be locked-in for a minimum period of six (6) months from the Date of Listing the shares of the Entity or twelve (12) months from the date of acquisition of such shares, whichever is longer.
(iv) shares allotted to Non Public Shareholders or Public Shareholders
during the period of twelve (12) months prior to the date of the Initial Listing Application shall be dealt with according to the discretion vested in the SEC in terms of Section 28A of the SEC Act.
(v) if the Entity fails to satisfy the minimum Public Holding requirement
on the date of listing due to shares of the Entity being locked-in as a result of Rules 2.1.1 (f) (i), 2.1.1(f)(iii) and 2.1.1(f)(iv) above, the Exchange may, with the concurrence of the SEC, reject the listing application of the said Entity. For the purposes of Rules 2.1.1 (d)
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and 2.1.1(e) and 2.1.1(f); ‘Non-Public Shareholders’ shall mean the following parties who hold, directly or indirectly, shares of the applicant Entity;
a) its parent, any subsidiary or associate companies or any subsidiary or associate companies of its parent company;
b) its directors who are holding office as directors of the Entity and their Close Family Members;
c) Chief Executive Officer and his/her Close Family Members;
d) Key Management Personnel and their Close Family Members;
e) Any party acting in concert with the parties set out in (a), (b), (c) and (d) above;
f) Shareholders whose shares are in a locked account with the CDS due to a statutory or regulatory requirement other than those shareholders exempted under (h) below and whose shares have been subject to a voluntary lock-in at the option of the shareholder;
g) Employees of the Entity, who have been allotted shares of a Listed Entity which are directly or indirectly controlled by the management or the majority shareholder of the Entity; or
h) any Entity or an individual or individuals jointly or severally holding 5% or more of the shares of the Listed Entity if the Entity is a Diri Savi Board Entity and 10% or more of the shares if the Listed Entity is a Main Board Entity, except where such shareholder is;
i. a statutory institution managing funds belonging to contributors or investors who are members of the public; or
ii. an entity established as a unit trust or any other investment fund approved by the SEC; or
iii. not a related party declared in terms of Sri Lanka Accounting Standards or a party acting in concert declared in terms of the Company Takeovers and Mergers Code.
‘Close Family Member’ shall mean the spouse or a financially dependent child.
‘Key Management Personnel’ shall mean those persons having authority and responsibility for planning, directing and controlling the activities of the applicant Entity, directly or indirectly, including any director (whether executive or otherwise) of that Entity.
‘Public Shareholders’ shall mean any party who hold shares of the applicant Entity other than the parties identified as Non-Public Shareholders.
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‘Date of Listing’ shall mean the first date on which the shares of the Entity are allowed to be traded on the Exchange.
2.1.2 MAIN LISTING SEGMENT (i) Eligibility to be listed on the Main Board
(a) Stated Capital of not less than Rupees Five Hundred Million (Rs.500, 000,000/-) at the time of listing,
(b) Net profit after tax for three (3) consecutive years immediately preceding the date of application,
(c) Positive Net Assets as per the consolidated audited financial statements for the last two (2) financial years immediately preceding the date of application, and,
(d) On the date of listing, the applicant Entity shall meet the Minimum Public Holding Requirement by selecting any of the options as set out in the table below:
Option
MINIMUM PUBLIC HOLDING REQUIREMENT
Float Adjusted Market
Capitalization
Public Holding Percentage
Number of Public Shareholders
1 Rs. 10.0 Bn. no minimum % required
500
2 Rs. 7.5 Bn. 5% 500
3 Rs. 5.0 Bn. 7.5% 500
4 Rs.2.5 Bn. 10% 500
5 less than Rs.2.5 Bn. 20% 500
The applicant Entity shall comply with the Float Adjusted Market Capitalization, corresponding Public Holding Percentage and Number of Public Shareholders (hereinafter collectively referred to as ‘Minimum Public Holding Requirement’) applicable under the option the Entity selects to adopt, as depicted in the table above.
For the purposes of these Rules, Float Adjusted Market Capitalization shall be calculated by multiplying the Public Holding Percentage of the applicant Entity by the Market Capitalization of the applicant Entity. In order to calculate the Market Capitalization of the applicant Entity at the time of listing, the applicant Entity shall utilize the issue price of a share in respect of an Offer for Subscription/Offer for Sale and the Reference Price of a share in respect of Introductions.
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(ii) Eligibility to be listed on the Diri Savi Board
a. Stated Capital of not less than Rupees Hundred Million (Rs.100, 000,000/-) at the time of listing,
b. Positive Net Assets as per the consolidated audited financial statements for the financial year immediately preceding the date of application,
c. On the date of listing, the applicant Entity shall meet the Minimum Public Holding Requirement by selecting any of the options as set out in the table below:
Option
MINIMUM PUBLIC HOLDING REQUIREMENT
Float Adjusted Market Capitalization
Public Holding Percentage
Number of Public
Shareholders
1 Rs. 1 Bn 7.5% 200
2 less than Rs.1 Bn 10% 200
The applicant Entity shall comply with the Float Adjusted Market Capitalization, and the corresponding Public Holding Percentage and Number of Public Shareholders (hereinafter collectively referred to as ‘Minimum Public Holding Requirement’) applicable under the Option the Entity selects to adopt, as depicted in the table above. For the purposes of these Rules, Float Adjusted Market Capitalization should be calculated by multiplying the Public Holding Percentage of the applicant Entity by the Market Capitalization of the applicant Entity. In order to calculate the Market Capitalization of the applicant Entity at the time of listing, the applicant Entity should utilize the issue price of a share in respect of an Offer for Subscription/Offer for Sale and the Reference Price of a share in respect of Introductions.
In the event the applicant Entity is seeking a listing on the Exchange by way of an Introduction, such Entity shall ensure that not more than 50% of the shares in the hands of the Public Shareholders are held by the three (03) largest Public Shareholders of the Entity at the time of listing.
d. An operating history of at least one (1) year immediately preceding the date of application.
For the purposes of Rules 2.1.2(i)(c) and 2.1.2(ii)(b) ‘Net Assets’ shall mean total assets after deducting total liabilities, preference share capital and advance against share capital.
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(iii) Transferability from the Main Listing Segment to the Alternate Market Segment
Entities whose Securities are listed on the Main Listing Segment shall not be permitted to transfer to the Empower Board in the Alternate Market Segment, unless the prior written approval of the SEC is obtained for such transfer. Such application to transfer shall accompany a recommendation obtained from the Exchange indicating the rationale of the Exchange.
2.1.3 ALTERNATE MARKET SEGMENT
(i) Eligibility to be listed on the Empower Board
a. Stated Capital of or above Rupees Twenty Five Million (Rs.25,000,000/-) and below Rupees Hundred Million (Rs.100,000,000/-) at the time of listing.
b. Additionally, in the event of an Initial Public Offering, the applicant Entity
shall have a Stated Capital of not less than Rupees Ten Million (Rs.10,000,000/-) as at the date of Listing Application.
c. Positive Net Assets as per the audited financial statements for the financial
year immediately preceding the date of application.
In the event the applicant Entity is a parent Entity, Positive Net Assets as per the consolidated audited financial statements for the financial year immediately preceding the date of application.
d. An operating history of at least two (2) years immediately preceding the date
of application. e. An unmodified audit opinion for the Financial Year immediately preceding
the date of the Initial Listing Application or an audit opinion which does not contain an emphasis of matter on “going concern” as set out in the Independent Auditor’s Report of audited financial statements contained in the annual report of the Entity.
f. Total assets of or below Rupees Six Hundred Million (Rs. 600,000,000/-) as
at the date of the Initial Listing Application. g. Application to list Securities shall be made through a sponsor approved by
the Exchange in conformity with the requirements set out in Appendix 2 E of these Rules.
For the purposes of Rule 2.1.3 (c), ‘Net Assets’ shall mean total assets after deducting total liabilities, preference share capital and advance against share capital. (ii) Eligibility to be listed on Multi-Currency Board
Please refer Section 10 of these Rules for the eligibility criteria and other listing/continuous listing requirements applicable to the Multi-Currency Board.
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2.1.4 INITIAL LISTING APPLICATION OF SHARES
An application for an initial listing shall include the following documents:
a. An Initial Listing Application which conforms to Appendix 2A of these Rules.
b. The Certificate of Incorporation or a document equivalent thereto where the Entity is incorporated/established/situated outside Sri Lanka or is a Statutory Corporation, certified by the Secretary of the Entity to be a “true copy.”
c. The Articles of Association or any document equivalent thereto where the
Entity is incorporated / established/ situated outside Sri Lanka or is a Statutory Corporation certified by the Company Secretary to be a ‘true copy’. The Articles or equivalent document must have incorporated the additional clauses as set out in Section 6 of these Rules, which clauses shall take precedence if there are any conflicting articles.
d. An extract of the Board Resolution certified by the Company Secretary, that in the opinion of the Board the consideration for which the shares are to be issued is fair and reasonable to the Entity and to the shareholders as required by the Companies Act.
e. A Board Resolution authorising the Initial Listing Application certified by the Company Secretary to be a ‘true copy’.
f. The ‘Listing Undertaking’ duly perfected in conformity with Appendix 2B.
g. A certified copy of every letter, report, balance sheet, valuation, contract or other document referred to in the Prospectus / Introductory Document.
h. In the case of an Offer for Subscription or an Offer for Sale a draft Prospectus prepared in compliance with Rule 3.1 of Section 3 of the Rules;
i. In the case of an Introduction a draft Introductory Document prepared in compliance with the requirements of Rule 3.4 of Section 3 of the Rules.
j. Where the Entity is seeking an exemption under item (h) (iii) of the definition of ‘Public Holding’ in calculating the Public Holding of the Entity, the Entity shall submit to the Exchange a Declaration signed by two (02) Directors of the Board or the Secretary of the Entity and one (01) Director stating that the shareholder concerned does not fall into the category of a related party in terms of the Sri Lanka Accounting Standards or a party acting in concert in terms of the Company
Takeovers and Mergers Code.
k. Fees as may be prescribed by Section 12 of the Rules.
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2.2 LISTING DEBT
2.2.1 GENERAL REQUIREMENTS
a. Debt Securities to be eligible to be listed on the Exchange shall be; (i) fully paid (ii) freely transferable
(iii) issued only for cash (in the event of Offer for Subscription or Offer for Sale)
b. In the event a Debt Security is to be listed by way of an Introduction, such Debt Security should have been allotted at least six (6) months prior to the listing application, unless such Debt Security has been offered in terms of a Prospectus as required by the Companies Act.
c. ELIGIBILITY TO BE LISTED
a) Where the applicant Entity is a Government Entity or Public Corporation;
(i) Such Entity shall provide an unconditional and irrevocable
guarantee from; the Government of Sri Lanka; or a bank licensed by the Central Bank of Sri Lanka and
having a minimum of a “A” rating from a rating agency registered with the SEC. In the event the bank has obtained two or more ratings at the same time from different rating agencies registered with the SEC, the lowest of such ratings shall be a minimum of a “A” rating; or
an international multilateral or bilateral or other agency acceptable to the Exchange for the repayment of the capital and interest;
or;
(ii) The Debt Security to be listed shall have an Investment Grade rating obtained from a rating agency registered with the SEC. In the event the applicant Entity has obtained two or more ratings for the Debt Security, at the same time from different rating agencies registered with the SEC, the lowest of such ratings shall be considered when listing the Debt Security.
b) Where the applicant Entity is a Company;
(i) to obtain a mandatory rating for the Debt Security to be listed;
and
(ii) the rating shall have a minimum of one notch above the Investment Grade, obtained from a rating agency registered with the SEC.
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In the event the applicant Entity has obtained two or more ratings for the Debt Security, at the same time from different rating agencies registered with the SEC, the lowest of such ratings shall be considered when listing the Debt Security.
A Company may additionally at its own discretion provide an unconditional and irrevocable guarantee from;
a bank licensed by the Central Bank of Sri Lanka and
having a minimum of a “A” rating from a rating agency registered with the SEC. In the event the bank has obtained two or more ratings, at the same time from different rating agencies registered with the SEC, the lowest of such ratings shall be a minimum of a “A” rating; or
an international multilateral or bilateral or other agency acceptable to the Exchange for the repayment of the capital and interest.
If a Public Listed Company wishes to change the rating agency during the tenure of the Debt Securities, such Entity shall be mandatorily required to obtain a rating from the original credit rating agency at the point of exit. Such rating obtained from the original rating agency shall be immediately published by the Company.
d. ELIGIBILITY TO BE LISTED ON THE SECOND BOARD (DELETED)
SAVINGS
(i) The Debt Securities already listed as at the date these Rules come into effect shall deemed to be validly listed till the expiration of the maturity date of the Debt Security.
(ii) The Initial Listing Applications received on or before the date
these Rules come into effect shall deemed to be validly made till the expiration of the maturity date notwithstanding anything to the contrary in these Rules.
e. MANDATORY PUBLICATION OF A REVISION TO THE RATING
An issuer shall publish any revision to the credit rating assigned to the Debt Securities during the tenure of the Debt Securities listed on the Exchange.
f. INTRODUCTION OF A PROHIBITION IN LISTED ENTITIES TO ISSUE DEBT
SECURITIES IN CERTAIN INSTANCES
An Entity shall not issue Debt securities in the event the securities of such Entity are on the Watch List.
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g. MINIMUM TENURE FOR A DEBT SECURITY TO BE LISTED
All Debt Securities to be listed shall be issued for a minimum tenure of two (02) years from the date of issuance.
h. MINIMUM SUBSCRIPTION REQUIREMENT APPLICABLE FOR AN INVESTOR
(i) In the event of an Offer for Subscription or Offer for Sale, the
minimum subscription requirement applicable for an investor applying for Debt Securities shall be Rupees Ten Thousand (Rs. 10,000/-).
Provided however, the minimum subscription requirement applicable for an individual investor applying for BASEL III Compliant Debt Securities as defined in Rule 2.2.1 (l) of these Rules shall be Rupees Five Million (5,000,000/-)
(ii) Any application in excess of the said minimum subscription requirement specified in Rule 2.2.1 (h) (i) shall be in multiples of Rupees Ten Thousand (Rs.10,000/-).
i. PAR VALUE OF DEBT SECURITIES
The par value of the Debt Securities to be listed on the Exchange shall be Rupees Hundred (Rs. 100/-).
j. APPOINTMENT OF A TRUSTEE
(i) The applicant Entity shall appoint a Trustee for the benefit of the
holders of Debt Securities, which are to be listed. (ii) The Trustee shall be incorporated and is required to have a
minimum stated capital of Rs. 25 million or the equivalent thereof in any other currency in the event the company is incorporated outside Sri Lanka.
(iii) The Trustee company shall have employees having the requisite
educational and professional experience as set out below:
Employees of the Trustee company who are carrying out trustee functions shall possess educational/professional qualifications and experience as set out in (A) or (B) below:
(A) A minimum of one (01) employee shall be a Member of
a recognized accounting body/holder of a degree in Accountancy, Economics or Finance from a recognized university and having two (02) years’ experience in handling trustee functions,
and,
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A minimum of one (01) employee shall be an Attorney-at-Law/holder of a degree in Law from a recognized university, and having two (02) years’ experience in handling trustee functions,
Or,
(B) a minimum of two (02) employees shall have at least seven (07) years’ experience in handling trustee functions.
(iv) The directors and employees of the Trustee Company so
appointed shall meet the “Fit & Proper” criteria approved by the SEC in the context of Market Intermediaries, as reproduced below.
The directors and employees of the Trustee Company carrying
out trustee functions shall not have been: (a) convicted by any Court of Law in Sri Lanka or abroad for
the commission of any offence which involves fraud, deceit or dishonesty;
and/or
(b) found to have committed or been connected with the commission of any act which involves fraud, deceit or dishonesty by anybody with regulatory or supervisory authority;
(I) established by law in Sri Lanka or abroad,
(II) constituted under law as a commission of inquiry, tribunal or other similar body,
or (III) by any professional association which in the opinion
of the SEC is of an established and credible stature.
(v) Any conflict of interests which may arise between the Trustee/its directors and the applicant Entity shall be disclosed in the Prospectus/Introductory document.
k. DEBT SECURITIES WITH A RIGHT OF CONVERSION TO ANOTHER CLASS OF
SECURITIES BY AN ENTITY LISTED/UNLISTED
Where an Entity proposes to issue Debt Securities (referred to herein for purposes of clarity as “Primary Securities”) with a right of conversion to another class of Securities (referred to herein for purposes of clarity as “Secondary Securities”) for which a listing would be sought, the Entity shall obtain a listing in principle for the Secondary Securities arising from such conversion at the time of listing the Primary Securities.
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The Listed Entity shall obtain shareholder approval by way of a Special Resolution for the issue of the Primary Securities at a General Meeting/Class Meeting of the holders of such classes of shares. Please refer Rule 5.9 for the procedure applicable in respect of listing of the Securities arising from the conversion.
I. BASEL III COMPLIANT DEBT SECURITIES
Where a commercial bank or specialized bank licensed by the Central Bank of Sri Lanka proposes to issue BASEL III Compliant Debt Securities for which a listing would be sought on the Exchange, the issue and allotment of such BASEL III Compliant Debt Securities shall be limited to ‘Qualified Investors’.
For the purpose of this Rule 2.2.1 (l);
‘Basel III Compliant Debt Securities’ shall mean, Debt Securities issued by commercial banks and specialized banks licensed by the Central Bank of Sri Lanka in compliance with Direction No. 01 of 2016 of the Central Bank of Sri Lanka dated 29th December 2016. ‘Qualified Investor’ shall mean,
a commercial bank licensed by the Central Bank of Sri Lanka in
terms of the Banking Act No. 30 of 1988 (as amended);
a specialized bank licensed by the Central Bank of Sri Lanka in terms of the Banking Act No. 30 of 1988 (as amended);
a mutual fund, pension fund, Employee Provident Fund or any other similar pooled fund;
a venture capital fund/company and private equity company; a finance company licensed by the Central Bank of Sri Lanka in
terms of the Finance Business Act No. 42 of 2011(as amended); a company licensed by the Central Bank of Sri Lanka to carry on
finance leasing business under the Finance Leasing Act No. 56 of 2000 (as amended);
a company licensed by the Insurance Board of Sri Lanka to carry on insurance business in terms of the Regulation of Insurance Industry Act No. 43 of 2000 (as amended);
a corporate (listed or unlisted) which does not fall under the above categories and is incorporated under the Companies Act No. 7 of 2007;
an investment trust or investment company; a non-resident institutional investor; and, an individual with an initial investment of Rs. 5,000,000/-.
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2.2.2 INITIAL LISTING APPLICATION-DEBT An application for a listing shall constitute the following: a. An Initial Listing Application which conforms with Appendix 2A to these
Rules.
b. The Certificate of Incorporation or a document equivalent thereto where the Entity is a Statutory Corporation, certified by the Secretary of the Entity to be a ‘true copy’, if the Entity is not listed on the Exchange.
c. The Articles of Association or any document equivalent thereto where the
Entity is a Statutory Corporation, certified by the Secretary of the Entity to be a ‘true copy’. The Articles or equivalent document must have incorporated the additional clauses as set out in Section 6 of these Rules, which clauses shall take precedence if there are any conflicting articles, if the Entity is not listed on the Exchange.
d. A Board Resolution authorising the Initial Listing Application certified by
the Secretary of the Entity to be a ‘true copy’
e. The ‘Listing Undertaking’ duly perfected in conformity with Appendix 2B.
f. A certified copy of every letter, report, balance sheet, valuation, contract or other document referred to in the Prospectus / Introductory Document.
g. A copy of the Trust Deed prepared in compliance with Appendix 3B to
these Rules and Guarantee Agreement (if applicable), in draft form.
h. A Declaration by the Entity confirming that the Entity has complied with the requirements of the Companies Act and the requirements set out in Rule 2.2.1 (e) (ii), (iii) & (iv) with regard to the Appointment of a Trustee.
i. In the case of an Offer for Subscription or an Offer for Sale a draft
prospectus prepared in compliance with Rule 3.2 or Rule 3.3 of Section 3 of these Rules (as applicable).
j. In an Introduction a draft Introductory Document prepared in compliance
with Rule 3.4 or Rule 3.5 of Section 3 of these Rules (as applicable).
k. The relevant Fees payable to the Exchange for the listing as prescribed by Section 12 of the Rules.
2.3 APPROVAL FROM THE EXCHANGE
The application may be approved pending and subject to due compliance of the requirements as set out in these Rules and of such other additional requirements as may be specified by the Exchange.
In granting such approval the Exchange may call upon the Entity to add to,
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clarify, amend or delete any information that is contained in the prospectus or in any document by which the Securities of the Entity are offered to the public for sale in the course of an Initial Public Offering.
2.4 PROCEDURE FOR AN INITIAL PUBLIC OFFERING (OFFER FOR SUBSCRIPTION / OFFER
FOR SALE)
a. The directors of the Entity shall be collectively and individually responsible for the accuracy and completeness of the information given in the prospectus.
b. The Entity shall ensure that no offer is made to the public of its Securities or any intimation given thereof to the public until approval for the listing of Securities is obtained from the Exchange.
c. The Entity shall ensure that there is no contradiction or misstatement between the prospectus and the content of any advertisement published in connection with the Initial Public Offering (IPO). The advertisements shall be submitted to the Exchange for approval prior to publication.
d. The subscription list should open within twenty (20) Market Days from the date of receiving approval from the Exchange.
e. Copies of the prospectus and application forms relating to the offer shall
be made available to the member firms and trading members of the Exchange and public at least seven (07) Market Days before the date of opening of the subscription list. It shall be the responsibility of the Entity to arrange for adequate supply of prospectus and application forms.
Provided however, where the applicant Entity is seeking a listing on the Empower Board in the Alternate Market Segment, such Entity shall make available the soft copies of the prospectus and application forms relating to the offer to the members and trading members of the Exchange and the public at least seven (07) Market Days before the date of opening of the subscription list.
f. The offer period shall comprise of not more than fourteen (14) Market Days computed from and including the date of opening.
g. The Entity shall open a separate bank account for the purpose of depositing payments received on applications.
h. Cheques received by the Entity in response to the offer shall not be banked
until the day after the closure of the subscription list unless the applicant Entity undertakes to pay Interest (as defined) on payments received from the date of realization of the cheque up to the date of allotment of the Securities.
i. Allotment of shares or Debt shall be made in a fair manner.
j. When the issue is oversubscribed prior to the date scheduled as the closing date of the period for subscription the Entity shall inform the
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Exchange in writing immediately of such fact and the subscription list shall be closed on the same day at 16:30 hours with the notification to the Exchange.
k. The Entity shall arrange for the refund payments due on applications rejected either in full or in part as expeditiously as possible but not exceeding ten (10) Market Days from the date of closing the issue (excluding the date of closure of the issue). Applicants for shares and Debt shall be entitled to Interest (as defined) on any refunds not made within this period. If the applicant has provided accurate and complete details of his bank account in the application, the Entity shall make such refund payments to the bank account specified by the applicant, through Sri Lanka Inter Bank Payment System (SLIPS) and a payment advice shall be issued to the applicant. If the applicant has not provided details of his bank account in the application, the Entity shall make such refund payments to the applicant by way of a cheque.
l. The Entity shall credit the investors’ CDS accounts with the Securities allotted within a period of eighteen (18) Market Days from the date of closure of the subscription list.
m. Upon the completion of crediting of Securities into the investors’ CDS Accounts, the Entity shall send a written confirmation to the investors within two (02) Market Days of crediting the CDS Accounts.
n. The Entity shall submit to the Exchange a ‘Declaration’ as set out in Appendix 2C of the Rules, on the Market Day immediately following the day on which the investors’ CDS accounts are credited with the Securities.
n. The Securities shall be listed on or before the third (03) Market Day upon receipt of the Declaration by the Exchange.
2.5 PROCEDURE FOR AN INTRODUCTION
a. The directors of the Entity shall be collectively and individually responsible for the accuracy and completeness of the information given in the Introductory Document.
b. The Exchange may call upon the Entity to add to, clarify, amend or delete
any information that is contained in the Introductory Document prior to granting approval.
c. The Entity shall be responsible to ensure that there is no contradiction or
misstatement between the Introductory Document and the content of any advertisement proposed to be published in connection in any manner whatsoever to the Introduction. The content of such advertisement shall be submitted to the Exchange for approval prior to publication.
d. Copies of the Introductory Document shall be made available to the
member firms and trading members of the Exchange within twenty (20) Market Days of receiving approval from the Exchange.
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Provided however, where the applicant Entity is seeking a listing on the Empower Board in the Alternate Market Segment, such Entity shall make available soft copies of the Introductory Document to the member firms and trading members of the Exchange within twenty (20) Market Days of receiving approval from the Exchange.
e. The Entity shall submit to the Exchange a ‘Declaration’ as set out in
Appendix 2D of the Rules on the Market Day immediately following the day on which the Introductory Document was made available to the member firms and trading members of the Exchange.
f. The Entity shall be listed on the Exchange on or before the third (03)
Market Day from the date of receipt of the Declaration by the Exchange.
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APPENDIX 2A INITIAL LISTING APPLICATION Name of Entity/ : …………… Managing Company Address : ……………
Date :……………. Colombo Stock Exchange # 04-01, West Block, World Trade Center Echelon Square Colombo 1 Dear Sir/Madam, We hereby apply for a listing on the Colombo Stock Exchange (Exchange) and a listing for the under-mentioned Securities issued/to be issued by us on the basis of our undertaking that the Rules and Circulars of the Exchange and the Central Depository Systems (Pvt.) Limited as may be amended or replaced from time to time shall be complied with. The particulars of Securities/units to be listed are as follows: Type of Securities (e.g. shares, debt etc.): Number of Securities to be listed: Number of Securities to be offered to the public: Details of allotments effected during the last 12 months: Whether the offer is by an Offer for Subscription, Offer for Sale, Introduction: We confirm that the particulars supporting the application are true and correct. We further confirm that the Board of the Entity has resolved that in its opinion the consideration for which the shares issued/to be issued is fair and reasonable to the Entity and to all existing shareholders, as required by the Companies Act (applicable only for listing of shares). Yours faithfully, .............................. Limited Given under the Common Seal of the Entity/Managing Company this ……. day of ……in the presence of
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………………….. (Name) Director …………………….. (Name) Director/Secretary Or, Signed by the duly authorized signatories of the Entity/ Managing Company on this ….. Day of ……… …………………………………………… (Name) Authorized Signatory Note: Please attach a copy of the Board Resolutions/Power of Attorney in proof of
such authority.
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APPENDIX 2B LISTING UNDERTAKING BY … [enter name of applicant]... To: The Colombo Stock Exchange
# 04-01, West Block, World Trade Center Echelon Square Colombo 1
In consideration of being listed on the Colombo Stock Exchange (Exchange), by virtue of …….. ……. Securities (shares/Debt etc…) being listed, we (name of applicant Entity/Managing Company) being duly incorporated and having our registered office/ principal place of business at ………………………………….. hereby undertake and agree:
(if) to be bound by the applicable Rules and Circulars of the Exchange and the Central Depository Systems (Pvt.) Limited as amended or replaced from time to time.
(ii) to be Listed at the sole discretion of the Exchange, and for such period as may be determined by the Exchange.
(iii) within ten (10) working days of the Entity obtaining a listing, to give public notice of the change of name, and to forward a copy of such notice to the Registrar, and upon obtaining a fresh Certificate of Incorporation from the Registrar, to forward same to the Colombo Stock Exchange within three (03) months of obtaining the listing.
Given under the Common Seal of the Entity this ……. day of ……in the presence of ………………….. (Name) Director …………………….. (Name) Director/Secretary Or, Signed by the duly authorized signatories of the Entity on this ….. day of ……… …………………………………. (Name) Authorised Signatory Note: please attach a copy of the Board Resolutions/Power of Attorney in proof of such
authority.
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APPENDIX 2C DECLARATION (Offer for Sale/ Offer for Subscription) To: Colombo Stock Exchange
# 04-01, West Block, World Trade Center Echelon Square Colombo 1
(Name of Entity/Managing Company)…… ……… (hereinafter called “The Entity”) hereby declares: That .........(quantity)..........shares/debt/units at a price of Rs. ….. each have been subscribed/purchased for cash and duly allotted/transferred to the subscribers/purchasers. (Which subscription is not less than the minimum subscription as stipulated in the prospectus) That the Stated Capital of the Entity is Rs. ……. That the direct uploads to the Central Depository System have been completed on the ……. (date). That the proceeds of the issue will be duly utilized for the objectives for which such proceeds were raised in terms of the Prospectus. That there is no other fact bearing on the Entity’s application for listing which, should be disclosed to Colombo Stock Exchange. Given under the Common Seal of the Entity this ……. day of ……in the presence of ………………….. (Name) Director ………………….. (Name) Director/Secretary Or, Signed by the duly authorized signatories of the Entity on this ….. day of ……… …………………………………………… (Name ) Authorised Signatory Note: please attach a copy of the Board Resolutions/Power of Attorney in proof of such
authority.
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APPENDIX 2D DECLARATION
(Introduction) To: Colombo Stock Exchange # 04-01, West Block, World Trade Center Echelon Square Colombo 1 (Name of Entity/Managing Company)…… ……… (hereinafter called “The Entity”) hereby declares: that copies of the Introductory Document have been forwarded to Colombo Stock Exchange and distributed among the members / trading members on the … … … (date). that the Entity has complied with all the requirements for a Listing of Securities/units in the Colombo Stock Exchange by way of an Introduction. that there is no other fact bearing on the Entity’s application for Listing which, should be disclosed to Colombo Stock Exchange. Given under the Common Seal of the Entity this ……. day of ……in the presence of ………………….. (Name) Director …………………….. (Name) Director/Secretary Or, Signed by the duly authorized signatories of the Entity on this ….. day of ……… …………………………………… (Name) Authorised Signatory Note: Please attach a copy of the Board Resolutions/Power of Attorney in proof of such authority.
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APPENDIX 2E PART A REQUIREMENTS RELATING TO SPONSORS OF ENTITIES TO BE LISTED ON THE EMPOWER BOARD IN THE ALTERNATE MARKET SEGMENT Appendix 2E sets out the requirements relating to sponsors of Entities seeking a listing on the Empower Board in the Alternate Market Segment. 1. ROLE OF THE SPONSOR 1.1 The role of the sponsor shall be to advise, guide and assist the Entity in
relation to both initial listing activities and post-listing activities, for a period not less than the release of the second annual report of the Entity after listing the Securities of the Entity on the Empower Board in the Alternate Market Segment of the Exchange.
1.2 The sponsor shall act with integrity and use due care and skill, at all times,
when acting for an Entity to be listed/listed on the Empower Board in the Alternate Market Segment of the Exchange.
2. OBLIGATIONS OF A SPONSOR The obligations of a sponsor include the following:
(i) To assess the suitability of the applicant Entity seeking a listing on the Empower Board, upon making all due diligence enquiries from the applicant Entity and considering all relevant matters including the business operations, financial standing, future plans, risks and corporate governance record of the Entity.
(ii) To guide the Entity and its directors regarding their initial listing obligations and continuous listing obligations under the Listing Rules and to ensure that the Entity, at all times, complies with the Listing Rules, other additional instructions issued by the Exchange and the legal and regulatory requirements applicable to the applicant Entity.
(iii) To ensure that the initial listing application and the documents enclosed thereto are prepared in conformity with the Listing Rules and the legal and regulatory requirements applicable to the applicant Entity, and such documents provide sufficient information for Investors to make an informed assessment of the applicant Entity and its financial condition.
(iv) To ensure that the documents required to be submitted to the Exchange are included in the initial listing application and such documents are submitted to the Exchange in a timely manner together with the required number of copies in terms of the Listing Rules.
(v) To perform its duties independently with no conflict of interests with the Entities it sponsors. In the event of any conflict of interest that cannot be
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resolved satisfactorily, the sponsor is prevented from acting on behalf of that issuer.
(vi) The sponsor shall satisfy itself of the accuracy/credibility of the information submitted to the Exchange at all times and accordingly ensure that the documentation is updated.
(vii) To liaise with the Exchange on matters concerning the obligations of the
sponsor and other matters which should be brought to the attention of the Exchange.
3. ELIGIBILITY TO BE A SPONSOR 3.1 An applicant shall satisfy the following eligibility criteria, in addition to any
other applicable legal and regulatory obligations, in order to be approved as a sponsor: (i) The applicant shall be a body corporate incorporated in Sri Lanka or
an individual resident in Sri Lanka who will satisfy the criteria stipulated in items 3.1 (ii) – (v) below.
(ii) The applicant shall have sufficient skills and resources to discharge its
obligations as a sponsor. In the event the applicant is; (a) a body corporate, the applicant shall have at least one (1) staff
member with a minimum of five (5) years’ experience in the field of Investment Banking or Corporate Finance, out of which one (1) year of experience shall be in handling listing applications of Issuers or capital raising services; or,
b) an individual, the applicant shall possess a minimum of five (5)
years’ experience in the field of Investment Banking or Corporate Finance, out of which one (1) year of experience shall be in handling listing applications of Issuers.
(iii) The applicant shall be independent of and have no conflicts of interest
with the Entities it sponsors.
(iv) In the event the applicant is; a) a body corporate, the directors and/or Key Management Personnel
of the applicant shall not at any time have been declared bankrupt and/or convicted of fraud, misappropriation or breach of trust or any other similar offence which the Exchange considers a disqualification; or,
b) an individual, the applicant shall not at any time have been declared bankrupt and/or convicted of fraud, misappropriation or
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breach of trust or any other similar offence which the Exchange considers a disqualification.
(v) The Sponsor should have necessary infrastructure facilities in the form
of adequate and suitable office accommodation in Sri Lanka, necessary equipment, appropriate systems and controls in place to ensure it can carry out its obligations as a sponsor.
3.2 The sponsor shall, at all times, satisfy the eligibility criteria for approval as a
sponsor and any other conditions/restrictions imposed by the Exchange. 4. APPROVAL OF SPONSORS 4.1 The approval of a sponsor shall be at the sole discretion of the Exchange. The
Exchange shall grant approval unconditionally, or subject to conditions, or reject an application for approval, as it deems appropriate. Any rejection of an application shall be carried out by the Exchange in consultation with the SEC. The decision of the Exchange shall be final and binding on an applicant.
4.2 An application for approval as a sponsor shall be submitted to the Exchange
in the format prescribed in Part B hereof. 4.3 An approval granted to a sponsor in terms of these Rules shall be valid only
for a period of three (03) years from the date of granting/renewing the approval as a sponsor.
4.4 A sponsor may, two (2) months prior to the expiry of the approval, submit an
application to the Exchange in the format prescribed in Part B hereof, for renewal of the approval.
4.5 (i) The Exchange may, in consultation with the SEC, revoke the approval
granted to a sponsor, in the following instances:
(a) Upon the written request of a sponsor; (b) If the sponsor is unable, unwilling or fails to comply with the
applicable Listing Rules of the Exchange; (c) If in the opinion of the Exchange, it is in the interest of the public
or the Exchange; or (d) In terms of item 9.2 of Appendix 2E, subsequent to a review of the
performance of the sponsor.
(ii) In the event an approval granted to a sponsor is revoked by the Exchange in terms of item 4.5 (i) above, such revocation shall be disclosed to the Market by the Exchange.
4.6 A sponsor whose approval has been revoked in terms of these Rules shall
remain responsible for all its actions, conduct, misconduct or breaches during its tenure as a sponsor.
4.7 The Exchange may disallow a sponsor from re-applying as a sponsor for a
specified period or indefinitely, in the event the approval of a sponsor has
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been revoked by the Exchange in terms of these Rules. 5. DOCUMENTATION TO BE SUBMITTED TO THE EXCHANGE An applicant shall submit the following documents to the Exchange to obtain an approval as a sponsor or to renew an existing approval as a sponsor:
(i) An application for grant/renewal of approval as a sponsor in the format prescribed in Part B hereof.
(ii) A copy of the Certificate of Incorporation or a document equivalent thereto
certified by the Secretary of the entity to be a “true copy.” (Not applicable in the case of individuals and applications for renewal of approval)
(iii) A copy of the national identity card or passport certified to be a “true copy.” (Not applicable in the case of corporate bodies)
(iv) A copy of the Board Resolution authorizing the application for approval as a
sponsor certified by the Secretary of the entity to be a “true copy.” (Not applicable in the case of individuals)
(v) A Declaration by the applicant declaring that the applicant has complied with the applicable Listing Rules.
(vi) A fee amounting to Rs.25,000/- (Not applicable for the initial application) 6. EXCHANGE’S RIGHT TO REQUEST FOR INFORMATION The Exchange reserves the right to request, at any time, for further information from the sponsor, including the qualifications, experience or training obtained by a sponsor or a director or a person employed by the sponsor or such other information on any matter as it may deem appropriate, to enable the Exchange to enforce compliance with the Listing Rules. 7. IMMEDIATE DISCLOSURES TO THE EXCHANGE Any material information that may have a bearing on the performance of the sponsor shall be immediately disclosed to the Exchange by the sponsor. Such material information includes but not limited to:
(i) Information concerning a significant change in the ownership of the sponsor. (ii) Any changes of the directorate / Key Management. (iii) Any other change as deemed material by the sponsor. (iv) Any acquisition or disposition of Securities by a sponsor in a Listed Entity
which it sponsors.
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8. TRADING RESTRICTIONS APPLICABLE FOR SPONSORS
8.1 A sponsor shall not trade in Securities of a Listed Entity which it sponsors,
based on price sensitive information that has not been disclosed to the public.
8.2 Additionally, a sponsor shall not trade in Securities of a Listed Entity which it sponsors, even after the release of the price sensitive information to the Exchange, for a period not less than two (02) Market Days after the release of such information. In computing the period of two (02) Market Days, the day on which the disclosure is made shall be excluded.
9. REVIEW BY THE EXCHANGE 9.1 The Exchange reserves the right to review the performance of the sponsors
on a continuous basis to determine as to whether;
(i) the sponsor is in compliance with these Rules; (ii) the performance of the sponsor is satisfactory; and, (iii) the sponsor has consistently maintained a high standard of service.
9.2 The Exchange shall have the sole discretion to revoke an approval granted to
a sponsor, if the Exchange is of the opinion that the sponsor has failed to comply with these Rules.
10. LIST OF APPROVED SPONSORS
The list of sponsors approved by the Exchange shall be hosted on the website of the Exchange.
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PART B APPLICATION FOR A GRANT/RENEWAL OF APPROVAL AS A SPONSOR To: Chief Executive Officer
Colombo Stock Exchange #04-01, West Block World Trade Center Colombo 01
1. I/We………………(name)……………………..of…………………(address)……
……………..hereby apply for approval/renewal of approval as a sponsor and agree to abide by the Listing Rules of the Colombo Stock Exchange, which are applicable to sponsors.
2. We confirm that:
a. I/we have never been denied an approval/renewal of approval as a sponsor by the Colombo Stock Exchange; and,
b. My/our approval as a sponsor granted previously has not been revoked by the Colombo Stock Exchange.
3. I/the following of our staff members possess the requisite skills and experience as required under the Eligibility Criteria for sponsors set out in Appendix 2E of the Listing Rules of the Colombo Stock Exchange:
Name Qualifications* Experience*
(Fill) (Fill) in investment bank/corporate finance
In handling Listing Applications
(Fill) (Fill)
* The qualifications and experience of the sponsor/staff members (as applicable)
shall be substantiated by documentary evidence.
4. I/We undertake:
a. to accept and discharge the obligations of the sponsor set out in the Listing Rules of the Colombo Stock Exchange, at all times, to the satisfaction of the Colombo Stock Exchange.
b. to comply with the applicable Listing Rules of the Colombo Stock Exchange, relevant legal and regulatory requirements and ethical and professional business practices.
c. to immediately notify the Colombo Stock Exchange of any material
change in my/our business affairs and any material alteration to the information submitted by me/us to the Colombo Stock Exchange, including any development which may affect my/our eligibility to act as a sponsor.
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……………………………………………… Signature of the Applicant/Authorized Signatory of the Applicant (as applicable) ………………………………………………………………………… Name and designation/profession (as applicable)
Date ………………………………………