Second board to enable trading of non-listed companies planned

A second board will be established to enable the public to trade shares of companies that are not listed on the main board of the Yangon Stock Exchange (YSX), U Htay Chun, member of the Securities and Exchange Commission of Myanmar (SECM), said earlier this month.

The move is expected to create an official platform for the trading of shares in public companies that do not meet the strict requirements to list on the YSX. “Rather than pursuing an over the counter (OTC) market, we are working on this plan under the YSX as a priority to make trading more legitimate,” said U Htay Chun.

Although less stringent than listing on the YSX, public companies will also need to meet the requirements of the second board before their shares are open for trading, said U Htay Chun.

“Right now, we are defining the necessary qualifications and working on details to control and monitor the trading of shares in unlisted companies. As such, the second board might not be established until next year,” he said.

In fact, the SECM had attempted to implement an OTC market in the past. “However, to do so requires the combined support of three securities companies, which is not easy. Establishing a second board is much faster,” U Htay Chun said.

Although there were more than 300 public companies in Myanmar in the past, after the re-registration process required under the Myanmar Companies Law, only 251 public companies remain for which an official platform is needed for buying and selling shares.

Unlike many international markets, where qualifying to become a public company involves meeting a slew of conditions such as being profitable for a consecutive period of time, providing evidence of growth potential and listing on a stock exchange, in Myanmar, companies can opt for public status at their inception.

Public companies are set up with two main objectives – to raise capital from the public and compete for government tenders. They are also required to obtain permission from the SECM and other authorities and meet a list of criteria before they are officially allowed to sell their shares.

So far though, there has not been a proper platform from which to trade shares in public companies and no oversight on compliance, financial viability and corporate governance. – Translated

Source: Myanmar Times

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