Oct 11, 2013 (LBO) - Sri Lanka's securities watchdog said it was allowing companies to list through an 'introduction' process with tighter rules on lock-in periods, minimum public shareholdings and more disclosures.
The so-called introduction process where stocks are listed without calling for public subscriptions for a minimum volume at an offer price, was halted after it was abused during a stock market bubble that ended in 2011.
During the bubble many fundamentally weak shares which were illiquid were heavily manipulated, including those that were already listed with or without introductions.
But newly 'introduced' tightly held stocks were prime targets for manipulation.
The SEC said was allowing introductions again "after much deliberation and public consultation."
SEC had imposed lock in periods for shares held by connected shareholders (non public shareholders), and those recently transferred or allotted.
Disclosures were also required on non-public shareholders on their relationship to the company.