Sri Lanka’s SEC to get tough with listing rules from January
Sri Lanka’s markets regulator has reportedly decided to adopt a more stringent policy of enforcement of listing rules with tougher regulations to be enforced from January 1st next year.
According to reports, the Securities and Exchange Commission (SEC) has asked the Colombo Stock Exchange (CSE) to incorporate several rules drafted in relation to violations of rules on corporate governance of listed companies.
The rules include late submission or non-submission of interim financial statements and annual reports and the incidence of modified audit opinions and incidence of an emphasis of matter of going concern in audited financial statements.
Under the new rules, a listed firm must give to the CSE for public release an ‘impact report’ containing a detailed description on the impact of the audit qualification to the financial statements.
At present CSE listing rules do not contain any rules on action to be taken by the CSE in the event the audit opinion in the annual report is found to be a “modified audit opinion” or contains an “emphasis of matter on going concern”.
Reports on the matter further noted that the impact report shall at a minimum contain cumulative impact on profit or loss, net assets, total assets, turnover/total income, earnings per share and any other financial item(s) which may be impacted due to qualified audit opinion.
Listed companies will also be required make an announcement to the market via the CSE on the qualified audit opinion, stating remedial action adopted or proposed to resolve the matters set out in the qualified opinion.
The move by Securities and Exchange Commission (SEC) to get tough with listing rules would increase the confidence levels of buyers in the Colombo Stock Exchange. The safety net provided by the SEC’s latest decision would encourage positive trading in the stock exchange.
|Article Code :||VBS/AT/17/10/2017/Z_4|