Driving Growth: SEC and CSE Collaborate to Expedite Listings Through Advisor Awareness

The Securities and Exchange Commission of Sri Lanka (SEC) in collaboration with the Colombo Stock Exchange (CSE) conducted an awareness session for Corporate Finance Advisors focusing on enhancing regulatory compliance and streamlining the listing process.

The forum brought together Corporate Finance Advisors and senior officials from the SEC and CSE to enhance the listing process by addressing regulatory expectations, identifying prevalent shortcomings in applications, and establishing best practices to strengthen investor confidence and market integrity.

Addressing the participants, Senior Prof. D.B.P.H. Dissabandara, Chairman, SEC highlighted the vital role Corporate Finance Advisors play in building market confidence beyond their traditional functions in facilitating listings, mergers, and acquisitions.

"Your screening process, your due diligence supports market confidence directly in addition to your key major roles," the Chairman stated. "As a regulator, our main job is to look at investor confidence plus investor protection. And indirectly your job facilitates that as well."

The Chairman emphasized that the overall reputation of the Sri Lankan capital market depends on the professional judgment and performance of Corporate Finance Advisors, as investors make decisions based on their assessments and recommendations.

Reinforcing this message, Mr. Rajeeva Bandaranaike, Chief Executive Officer, CSE emphasized the importance of collaboration in improving market efficiency. "The objective is to completely revamp and improve the overall listing experience for companies and issuers," he stated. "This is a journey that we need to go together with the community. We cannot do this alone."

He also noted the complexity of public listings compared to bank financing, explaining that heightened scrutiny is necessary when dealing with public money. "At the end of the day, if the prospectus is not clean and accurate, we're going to face problems. We don't want companies going into the watchlist after one or two months of listing."

Building on this framework, Ms. Kanishka Munasinghe, Vice President, Listing, CSE highlighted critical gaps in recent listing applications, particularly regarding litigation disclosure and legal due diligence. The CSE has expanded its disclosure requirements to cover not just financial impact but also operational continuity and licensing implications.

She outlined the CSE's 2026 initiatives including comprehensive guidelines for prospectus preparation, a digital listing portal for enhanced transparency, and a commitment to seven-day review timelines once minimum requirements are met. "Consult the CSE before you structure a particular issue. Any complex scenario can be accommodated within the listing and regulatory framework," she advised.

Addressing the regulatory perspective, Ms. Manuri Weerasinghe, Director Corporate Affairs, SEC, emphasized the critical gatekeeping role of Corporate Finance Advisors and the regulatory consequences of inadequate due diligence.

"You are not merely transaction advisors when it comes to listing applications. You are the gatekeepers to maintain the credibility of this market," she stated. "From retail investors to institutional investors, they rely on your information. Therefore, I expect you to take your job role in a serious manner and to ensure what you disclose to the market is always credible."

She stressed the mandatory requirement under Section 33 of the CFA Rules to verify each piece of information in prospectuses, warning that failure to do so constitutes a violation. Ms. Weerasinghe also highlighted recent enforcement actions, noting that penalties and public reprimands have been imposed against corporate finance advisors for regulatory breaches.

Further elaborating on practical requirements, Ms. Nilupa Perera, Chief Regulatory Officer, CSE highlighted the critical importance of comprehensive due diligence and educating issuers about post-listing obligations.

"We had a few instances where due diligence was not done properly. We had to reject applications and go to the Central Bank and Insurance Regulator to get their views. So it's better if you do that due diligence properly before sending the documentation to us," she stated.

She urged Corporate Finance Advisors to guide issuers on continuous listing requirements even after their formal role ends: "Even though your role is over from the listing, try to tell them about the continuous listing requirements so that their securities will not be transferred to the watchlist."

Concluding the regulatory perspectives, Mr. Suneth Perera, Acting Director Supervision, addressed several compliance requirements requiring stricter adherence from Corporate Finance Advisors. He reminded advisors of the mandatory submission of post-issue reports to the Supervision Division and the requirement for quarterly financials to be signed by both a director and CEO, or alternatively by the CFO and CEO. Additionally, annual business plan status updates must be submitted by January 20th.

Following the presentations, the session featured a panel discussion with industry experts and an interactive Q&A segment that provided Corporate Finance Advisors the opportunity to seek clarifications and engage in constructive dialogue on practical challenges and solutions.

The awareness session represents a significant step in the SEC and CSE's ongoing commitment to strengthening the Sri Lankan capital market infrastructure. By fostering closer collaboration between regulators and Corporate Finance Advisors, and implementing technological solutions such as the digital listing portal, both institutions aim to create a more efficient, transparent, and investor-friendly listing environment.