The Securities and Exchange Commission of Sri Lanka (SEC) in collaboration with the Colombo Stock Exchange (CSE) recently conducted an awareness session for Corporate Finance Advisors. The session aimed to enhance regulatory compliance and streamline the listing process.
This forum gathered Corporate Finance Advisors along with senior officials from the SEC and CSE to address regulatory expectations, identify common shortcomings in applications, and establish best practices. The goal is to strengthen investor confidence and ensure market integrity.
Senior Prof. D.B.P.H. Dissabandara, Chairman of the SEC, addressed the participants, underscoring the crucial role of Corporate Finance Advisors in building market confidence beyond their traditional functions of facilitating listings, mergers, and acquisitions. “Your screening process and due diligence directly support market confidence in addition to your key roles,” the Chairman remarked. “As a regulator, our primary job is to look at investor confidence and protection, and your work indirectly facilitates this as well.”
He emphasized that the reputation of the Sri Lankan capital market relies heavily on the professional judgment and performance of Corporate Finance Advisors, as investors base their decisions on the assessments and recommendations provided by these advisors.
Reinforcing this message, Mr. Rajeeva Bandaranaike, CEO of the CSE, highlighted the importance of collaboration in enhancing market efficiency. “The objective is to completely revamp and improve the overall listing experience for companies and issuers,” he stated. “This journey requires collaboration with the community; we cannot achieve this alone.”
Mr. Bandaranaike also noted the complexity of public listings compared to bank financing, explaining that heightened scrutiny is necessary when dealing with public funds. “If the prospectus is not clean and accurate, we will face problems. We don’t want companies entering the watchlist shortly after listing,” he added.
Building on this framework, Ms. Kanishka Munasinghe, Vice President of Listing at CSE, highlighted critical gaps in recent listing applications, particularly concerning litigation disclosure and legal due diligence. The CSE has expanded its disclosure requirements to address not only financial impacts but also operational continuity and licensing implications.
She outlined the CSE’s 2026 initiatives, which include comprehensive guidelines for prospectus preparation, a digital listing portal for enhanced transparency, and a commitment to a seven-day review timeline once minimum requirements are met. “Consult the CSE before structuring a particular issue. Any complex scenario can be accommodated within the listing and regulatory framework,” she advised.
From a regulatory perspective, Ms. Manuri Weerasinghe, Director of Corporate Affairs at 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 for maintaining the credibility of this market,” she stated. “Investors, both retail and institutional, rely on your information. Therefore, it is imperative that you take your role seriously and ensure that the information you disclose is 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 at CSE, underscored the importance of comprehensive due diligence and educating issuers about post-listing obligations. “We had instances where due diligence was not done properly, leading to application rejections and consultations with the Central Bank and Insurance Regulator. Proper due diligence should be conducted before submitting 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 ends with the listing, continue to inform them about the ongoing listing requirements to prevent their securities from being transferred to the watchlist.”
Concluding the regulatory perspectives, Mr. Suneth Perera, Acting Director of Supervision, addressed various compliance requirements necessitating 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, providing Corporate Finance Advisors the opportunity to seek clarifications and engage in constructive dialogue on practical challenges and solutions.
This 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.
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