Securities Commission Issued Warning Against Illegal Share Sales
By Kyaw Hsu Mon 22 July 2016
RANGOON—The Securities and Exchange Commission of Myanmar (SECM) warned public companies this week that it would take action against those that sell shares without the SECM’s approval, according to a commission member.
To protect investors, the SECM said it will ensure that companies are in compliance with the Securities Exchange Law and will take action against those that are not.
“Recently, some companies have announced that they have shares available to sell. But if they do not have approval from the SECM, they can be punished under the law,” said commission member Tin May Oo.
According to the law, public companies—which are jointly owned by numerous private shareholders—are required to submit a prospectus to the SECM before selling shares. After submission, the approval process takes about 60 days, according to the commission.
According to Article 66 of the Securities Exchange Law, public companies that violate the law can be imprisoned for up to a year or fined. The law was approved by Parliament in 2013, but some companies still lack information regarding the details.
“That is why we are announcing the rules again and our intention to take action,” said Tin May Oo. “Some companies have advertised shares in the state-owned newspaper. We’ve asked them to stop. If they continue, they will be charged,” she added.
No public company has been sued yet under the law.
“This is the second time we’ve issued a warning regarding this. We will also announce it on DICA’s [Directorate of Investment and Companies Administration] website soon,” Tin May Oo said.
According to DICA, more than 200 businesses in Burma are registered as public companies. Only six are expected to list their shares this year on the country’s stock exchange, which opened in March.
Thet Tun Oo, a senior official from the Yangon Stock Exchange (YSX), said many companies do not have a proper understanding of the Securities Exchange Law.
“Businesses need to gain knowledge and follow the rules. The YSX will check that any companies listed in the future are compliant with the law,” he said.
The state-owned Global New Light of Myanmar cautioned that action would be taken by the SECM against those selling stocks through illegal or “non-transparent” means, including over social media sites.