Mar 04, 2016 (LBO) – AIA Insurance has issued an explanation clarifying its position on minimum public float saying the shortfall is to be rectified complying with the relevant listing rules.
Existing public holding of the company is 2.84 percent as at the end of last year.
1,794 public shareholders of the company represent 874,435 shares in the total issued and fully paid up shares of 30,749,370 of the company.
The company said it received an exemption from the Securities and Exchange Commission in July 2015 on the maintenance of minimum public holding as a continuous listing requirement.
“The said exemption is valid until 31 December 2016 or until a draft legislation to amend the Regulation of Insurance Industry Act is passed, and the company delists itself from the CSE in pursuance of same, whichever is earlier with the right reserved for the SEC to re-visit the said exemption by 31 December 2016.”
Several companies have already de-listed and several others have transferred to the secondary Diri Savi Board following the introduction of mandatory public holding rules.
The SEC introduced the mandatory minimum public float requirement for listed companies following a practice that has already been adopted by a large number of international and regional jurisdictions.
In addition to increasing liquidity in the market this initiative was also expected to facilitate a better price discovery mechanism.
Chief Executive Officer at the Colombo Stock Exchange Rajeeva Bandaranaike recently said Sri Lanka’s securities regulator is currently reconsidering the rule as the intention of introducing such rule was not met.
As per the current minimum public holding rules, there are two ways to get listed on the main board of the Colombo Stock Exchange.
One option is that a listed entity on the main board should maintain a minimum public holding of 20 percent of its total listed ordinary voting shares in the hands of a minimum of 750 public shareholders.
Second option is that a market capitalization of 5 billion rupees of its public holding in the hands of a minimum of 500 public shareholders while maintaining a minimum public holding of 10 percent.
To list on the secondary DiriSavi Board, a company should maintain a minimum public holding of 10 percent of its total listed shares in the hands of a minimum of 200 public shareholders.