SEC revises ‘lock-in’ period for pre-IPO shares

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http://www.cse.lk/cmt/upload_cse_announcements/3701377491437_.pdf

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Redbulls · 4 SEC revises ‘lock-in’ period for pre-IPO shares Tue Aug 27, 2013 12:19 am

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The Securities and Exchange Commission (SEC) has issued a fresh directive amending the ‘lock-in’ period for shares held prior to an Initial Public Offer (IPO).

It said all shares held by non public shareholders prior to 12 months from the date of Initial Listing Application will be locked-in for a period of six months from the date of listing of the entity. Furthermore all shares held by public shareholders prior to 12 months from the date of an initial listing application shall not be locked-in.

All share acquired by way of a transfer from another shareholder irrespective of being non-public or public shareholders, during 12 months period immediately preceding the date of an initial listing application shall be locked in for a minimum of six months from the date of listing or 12 months from the date of acquisition of those shares whichever is longer.

All shares acquired by way of an allotment during 12 month period immediately preceding the date of initial listing application shall be dealt with by the discretion vested in the Commission under Section 28A of the SEC Act No. 36 of 1987 where the Commission grants a waiver to an entity in terms of the said provision.

In respect of listings by way of an offer for sale, where a company makes an application to list, the shareholders considering divesting their shareholding through an IPO should have held such shares at least for a period of 18 months prior to the initial listing application.

For the purpose of imposition of lock-in periods only, non-public shareholders will be the following parties who hold, directly or indirectly shares of the applicant entity – parent, subsidiary or associate companies or any subsidiaries or associates of its parent company; directors who are holding offices as directors of the entity and their close family members; key management personnel and their close family members; any party acting in concert with above parties or any individual or company holding jointly or severally 5% or more of the shares of the applicant entity.

Public shareholders mean any party who holds shares of the applicant entity other than the parties identified as non-public shareholders as above.

The date of listing shall be the first date on which shares of an entity is allowed to be traded on the Colombo Stock Exchange.

The SEC directive also stated that an entity at the time of making an application for a listing will be required to make adequate disclosures pertaining to locked-in/not locked-in shares in the prospectus or any other similar supplementary or replacement document.

The SEC also said it reserves the right to revisit the restrictions imposed by this directive as and when deemed necessary by the Commission.
http://www.ft.lk/2013/08/27/sec-revises-lock-in-period-for-pre-ipo-shares/