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By Ravishanka Withanachchi
The deadline of June 30th given by the Central Bank of Sri Lanka for Registered Finance Companies (RFCs) to seek listing on the Colombo Stock Exchange (CSE) is likely to be met by all the RFCs by the end of this week, according to the Finance House Association (FHA) representatives and other stakeholders. The listing on the Colombo Bourse is expected to increase the transparency in the non-banking financial sector that experienced series of collapses and debacles couple of years ago.
“Out of the total 36 member companies of FHA, 28 of them have already been listed and the remaining eight unlisted companies are in the process of listing by way of an introduction,” said Brindley de Sylva, Vice President of the Finance House Association of Sri Lanka and the Managing Director of the Lanka Orix Leasing Company in an interview with The Bottom Line.
He says since none of the companies will fall short of listing, a request for extension by the Association to the deadline will not be made.
The Central Bank had earlier said that non compliance of its rule will mean action in terms of the Bank’s directive issued under the Monetary Law Act No. 58 of 1949 and the Finance Companies Act No.78 of 1988 as amended by the Act No. 83 of 1991.
Meanwhile, Gunendra Sellahewa, Head of Market Development at the CSE also confirmed that the CSE has already received applications to list from all eight remaining unlisted RFCs with the process being completed soon.
“Although the listing will increase the regulatory pressure upon the non banking financial institutions same as for the banks, this will provide an opportunity for the RFCs to raise their capital base to facilitate the strategic initiatives like branch expansion island-wide which would be difficult if they remain unlisted. This also improves the credibility of those companies in the eyes of potential stakeholders like investors and depositors,” said Mano Alles, the managing director of Abans Financial Services Ltd, a company which is in the process of listing said.
According to certain media reports earlier, it was stated that the deadline given to RFCs for stock market listing may be extended as most of these firms were slow in seeking listing. However, the Central Bank later clarified its position stating that there was no change in its deadline.
It has to be noted that since several of the smaller finance companies are closely-held family firms, they have been a little reluctant to go public as it would increase the transparency levels and may dilute control.
RFCs have already been given two years to seeking the mandatory listing, a senior official of the Central Bank said adding, however, that they are willing to be flexible when considering the reasons for the delay of some finance companies in complying with the regulation.
http://www.thebottomline.lk/2011/06/26/page1.html
The deadline of June 30th given by the Central Bank of Sri Lanka for Registered Finance Companies (RFCs) to seek listing on the Colombo Stock Exchange (CSE) is likely to be met by all the RFCs by the end of this week, according to the Finance House Association (FHA) representatives and other stakeholders. The listing on the Colombo Bourse is expected to increase the transparency in the non-banking financial sector that experienced series of collapses and debacles couple of years ago.
“Out of the total 36 member companies of FHA, 28 of them have already been listed and the remaining eight unlisted companies are in the process of listing by way of an introduction,” said Brindley de Sylva, Vice President of the Finance House Association of Sri Lanka and the Managing Director of the Lanka Orix Leasing Company in an interview with The Bottom Line.
He says since none of the companies will fall short of listing, a request for extension by the Association to the deadline will not be made.
The Central Bank had earlier said that non compliance of its rule will mean action in terms of the Bank’s directive issued under the Monetary Law Act No. 58 of 1949 and the Finance Companies Act No.78 of 1988 as amended by the Act No. 83 of 1991.
Meanwhile, Gunendra Sellahewa, Head of Market Development at the CSE also confirmed that the CSE has already received applications to list from all eight remaining unlisted RFCs with the process being completed soon.
“Although the listing will increase the regulatory pressure upon the non banking financial institutions same as for the banks, this will provide an opportunity for the RFCs to raise their capital base to facilitate the strategic initiatives like branch expansion island-wide which would be difficult if they remain unlisted. This also improves the credibility of those companies in the eyes of potential stakeholders like investors and depositors,” said Mano Alles, the managing director of Abans Financial Services Ltd, a company which is in the process of listing said.
According to certain media reports earlier, it was stated that the deadline given to RFCs for stock market listing may be extended as most of these firms were slow in seeking listing. However, the Central Bank later clarified its position stating that there was no change in its deadline.
It has to be noted that since several of the smaller finance companies are closely-held family firms, they have been a little reluctant to go public as it would increase the transparency levels and may dilute control.
RFCs have already been given two years to seeking the mandatory listing, a senior official of the Central Bank said adding, however, that they are willing to be flexible when considering the reasons for the delay of some finance companies in complying with the regulation.
http://www.thebottomline.lk/2011/06/26/page1.html
