Tougher stock market rules from January, next year

The Securities and Exchange Commission (SEC) last week directed the Colombo Stock Exchange (CSE) to incorporate the amended rules for stringent policy enforcement into the existing Listing Rules, according to a disclosure made on the CSE yesterday.

The new enforcement procedures, contained in Annexure I to the Listing Rules of the CSE, will come into effect from January 1, 2018. Under the new rules, the regulator can take stronger action against the listed companies violating the corporate governance rules and the late submissions or non-submissions of interim financial statements and annual reports.

Stringent enforcement will also be taken on incidence of modified audit opinions and the incidence of an emphasis of matter of going concern in audited financial statements, the SEC said.

During two meetings held this August, the SEC had deliberated on the changes to the rules proposed by the CSE in April 2017.

SEC Director General Vajira Wijegunawardane in September said the final amendments approved by the SEC took away some of the subjectivity related to the enforcement action, which was present in the CSE’s proposals.