New board for IT, start-ups
The Securities and Exchange Commission (SEC) has plans to set up a dedicated board for the IT and start-up sectors. SEC Chairman Prof. Harendra Dissabandara stated that the regulator has broad plans to set up a dedicated board for the IT sector and start-ups.
The SEC, along with the Colombo Stock Exchange (CSE), launched the “Empower” SME Board in 2018 to provide a dedicated platform for Small and Medium Enterprises to raise capital. There is also a Diri Savi Board, a platform tailored for mid-sized and growing companies that do not yet fulfil the more rigorous criteria of the Main Board. However, IT companies and start-ups have not been able to use these boards to raise capital.
Prof. Dissabandara added that setting up a dedicated board will provide these businesses with an opportunity to access capital markets and enhance their visibility without the stringent requirements typically associated with larger boards.
For the medium term, the SEC is also working on a plan to support start-ups and venture capital funds in raising capital through the stock market.
To help finance venture capital funds, an amendment to the current Act is planned to enable their listing on the CSE, addressing current technical issues.
However, since that is a long route, the SEC, with the Digital Ministry, has planned to submit a proposal in the upcoming budget to enable start-ups to raise capital through the CSE, Prof. Dissabandara said.
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