The Securities and Exchange Commission of Sri Lanka (SEC) at its recent meetings having deliberated on the adequacy of the current Listing Rules of the Colombo Stock Exchange (CSE) relating to the enforcement procedures applicable to listed public companies, decided to adopt a more stringent policy of enforcement.
It was decided to direct the CSE to incorporate rules drafted in relation the following which includes, a) violations of rules on corporate governance by listed public companies, b) late submission or non-submission of interim financial statements by listed public companies; c) late submission or non-submission of annual reports by listed public companies; d) incidence of modified audit opinions in the audited financial statements of listed public companies; and e) incidence of an emphasis of matter on going concern in the audited financial statements of listed public companies.
Hence the CSE is directed to incorporate the enforcement procedures contained in Annexure I to the Listing Rules of the CSE as a matter of priority, with necessary changes in numbering as appropriate and give effect to the enforcement procedures constrained in annexure I from 1st of January 2018.
[For purposes of clarity, the enforcement procedures in respect of `modified audit opinions’ and `emphasis of matter on going concern’ shall take effect for all Annual Reports and Audited Financial Statements released after lst January 2018]
It was decided to rename the `Default Board’ as the `Watch List’; confirm compliance with the directive by submission to the SEC of the relevant sections of the Listing Rules as amended; and inform all listed public companies of the enforcement procedures as set out in Annexure I and their effective dates, pending incorporation to the Listing Rules of the CSE.
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