CSE and SEC encourage more family -owned businesses to go public

Panel discussion

• Family-owned biz urged to make use of current conducive environment and concessions offered
• Point out listing isn’t a cumbersome, expensive process despite perception 
• CSE-SEC forum attracts 70 representatives from prominent family businesses in Sri Lanka

The Colombo Stock Exchange (CSE) and Securities and Exchange Commission (SEC) are encouraging family-owned businesses to go public to make use of the concessions offered to new listings, while boosting the country’s capital market’s liquidity.

To this end, CSE and the SEC hosted an issuer forum themed ‘Founder to Family - Leveraging Going Public’, at the Shangri-La Hotel Colombo recently. 

Speaking at the event, SEC Chairman Viraj Dayaratne said, “One of our objectives is to increase liquidity of the market. There are many misconceptions in the market. One is that listing process is cumbersome, that it takes time and also it can be very expensive. But it is not cumbersome or expensive as many would perceive.”  “It is one of the best options to raise capital. And that is why we want businesses to come to the capital market and make use of the opportunities. The government has created a healthy environment. The last budget proposal has given many tax incentives, which are open until the end of the year. So it is the best time to come and list your company,” 
he added.

The Budget 2021 proposed a 50 percent tax concession for the years 2021/2022 for companies that will be listed before December 31, 2021 and a concessionary corporate tax rate of 14 percent will be provided for the subsequent three years.

   Speaking during the event, CSE Chairman Dumith Fernando said, “It’s an interesting juncture in our equity markets and in our capital markets with an environment that has become much more conducive to more companies accessing capital markets. We thought now is the right time to start speaking to companies, especially family-owned businesses about the types of benefits, the types of processes and the types of multigenerational value that you could get from being listed on the Stock Exchange.”

“With family Businesses, one of the most important things that listing can do for you is strengthening your governance and creating a legacy where your company can withstand various issues that might come as a private company,” he added.

The Forum drew an encouraging response from the family business community and was attended by over 70 representatives of prominent family businesses in Sri Lanka. 

The content discussed at the event included sessions on how best to structure an IPO, the preparatory process for a family business prior to an IPO and wealth management for family businesses, as well as regulatory benefits and tax advantages post IPO, which will help in balancing the family’s needs as well as those of future stakeholders. 

A number of resource persons representing the country’s equity and capital markets addressed the event.