Tue, 19 Mar 2024 Today's Paper

SEC tightens related party transaction rules

By

13 December 2013 08:17 am - 0     - {{hitsCtrl.values.hits}}

A A A

The Securities and Exchange Commission yesterday tightened the rules on related party transactions by introducing a detailed best practices code with effect from January 1, 2014, aiming to safeguard minority shareholders and put in place an internal control mechanism in listed firms.

However, the adoption of the best practices code would be on voluntary basis during the first two years of the introduction. But from 2016, the adoption of the best practices code becomes mandatory for all listed firms.

The companies which will adopt the best practices code from January 2014 on a voluntary basis for an initial period of two years will be exempted from complying with the disclosure requirements stipulated in Listing Rule 7.6 (XVI) and item 29 of Appendix 8A, which will be repealed in 2016.

However, the provisions in the best practices code appear to be more detailed and demanding compared to disclosure provisions in the Listing Rule 7.6 (XVI).

For instance, the best practices code proposes to set up a Related Party Transaction Review Committee within the firm to confirm that a related party transaction is not against the company’s interest and mention whether the review committee obtained an opinion from an independent expert before forming its view.

Further shareholder approval by a way of a special resolution is required under the new best practices code if a listed entity or its subsidiary buys or disposes 1/3 of the total assets of either of them to a related party.

Order Gifts and Flowers to Sri Lanka. See Kapruka's top selling online shopping categories such as Toys, Grocery, Kids Toys, Birthday Cakes, Fruits, Chocolates, Clothing and Electronics. Also see Kapruka's unique online services such as Money Remittence,Astrology, Courier/Delivery, Medicine Delivery and over 700 top brands. Also get products from Amazon & Ebay via Kapruka Gloabal Shop into Sri Lanka

  Comments - 0

Order Gifts and Flowers to Sri Lanka. See Kapruka's top selling online shopping categories such as Toys, Grocery, Kids Toys, Birthday Cakes, Fruits, Chocolates, Clothing and Electronics. Also see Kapruka's unique online services such as Money Remittence,Astrology, Courier/Delivery, Medicine Delivery and over 700 top brands. Also get products from Amazon & Ebay via Kapruka Gloabal Shop into Sri Lanka

Add comment

Comments will be edited (grammar, spelling and slang) and authorized at the discretion of Daily Mirror online. The website also has the right not to publish selected comments.

Reply To:

Name - Reply Comment





Order Gifts and Flowers to Sri Lanka. See Kapruka's top selling online shopping categories such as Toys, Grocery, Kids Toys, Birthday Cakes, Fruits, Chocolates, Clothing and Electronics. Also see Kapruka's unique online services such as Money Remittence,Astrology, Courier/Delivery, Medicine Delivery and over 700 top brands. Also get products from Amazon & Ebay via Kapruka Gloabal Shop into Sri Lanka

How female change-makers are driving Sri Lanka’s energy saving platform

Saving energy has become more of a responsibility than a habit in today’s c

A dull Ramadan awaits Muslims amidst the Soaring Cost of Living

In the coming days, Muslims across the world will welcome the Holy Month of R

New wildlife underpass to curtail HEC

As of February 2024, Sri Lanka lost another 38 elephants as a result of the H

Will the Mannar wind power project kill ecological treasures?

In February 2023, Adani Green Energy (Sri Lanka) Ltd was given provisional ap

MIRROR CRICKET

More