Directive on Disciplinary Actions for Listing Rule Non-Compliances

SEC SECURITIES AND EXCHANGE
COMMISSION OF SRI LANKA
இலங்கை பிணையங்கள் மற்றும் பரிவர்த்தனை ஆணைக்குழு

BY HAND

Ref: SEC/LEG/23/10/07

06th October 2023

TO: THE COLOMBO STOCK EXCHANGE

DIRECTIVE ISSUED IN TERMS OF SECTION 16(c) TOGETHER WITH SECTIONS 26(5), 178(5)(a), 81(3), 175(1)(a) AND 175(4) OF THE SECURITIES AND EXCHANGE COMMISSION OF SRI LANKA ACT NO. 19 OF 2021

The Securities and Exchange Commission of Sri Lanka (SEC) at its 493rd Meeting held on 03rd October 2023 having taken into consideration the representations made and discussions held with the Colombo Stock Exchange (CSE) in respect of non-compliances relating to the Listing Rules of the CSE, decided to issue guidelines to the CSE in order for the CSE to take disciplinary actions and/or administrative sanctions in respect of same.

Therefore, the CSE is directed to take the following disciplinary actions and/or administrative sanctions in respect of non-compliances relating to the Listing Rules of the CSE as appropriate, subsequent to following the procedure stipulated below:

(1) The CSE to identify the non-compliances relating to the Listing Rules of the CSE in respect of the following:

a) Non-submission/delayed submission of Annual Reports; b) Non-submission/delayed submission of Interim Financial Statements; c) Non-disclosure/delayed disclosure of revision of ratings; and d) Non-disclosure of material information as per the CSE Listing Rules.

(2) The CSE to provide notice or an opportunity of being heard to the Listed Entity and to the Directors of such entity (as applicable) in respect of the aforesaid non-compliance(s) relating to the Listing Rules of the CSE.

(3) To take any one or more of the following disciplinary actions and/or administrative sanctions on the Listed Entity and/or its Directors upon providing notice or considering the responses received, pursuant to Item 2 above (as applicable):

(i) imposition of a penalty not exceeding Rupees 5 million in respect of the aforesaid non-compliances; (ii) issuance of a Letter of Caution; (iii) issuance of a Letter of Warning; (iv) issuance of a Public Reprimand to the Board of Directors of a Listed Entity which has committed the non-compliance.

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SEC SECURITIES AND EXCHANGE
COMMISSION OF SRI LANKA

Continuation Sheet

(4) The CSE to notify the SEC and publish information in respect of the disciplinary action and/or the administrative sanction taken.

The CSE is further directed to exclude the following categories for the time being from the imposition of the above sanctions:
(a) Companies listed on the Empower Board; and (b) State Owned Enterprises which would be listed on the Catalist Board of the Exchange.

These guidelines will be effective from the date hereof.

(Signature)

Chinthaka Mendis
DIRECTOR GENERAL