In exercise of the power conferred under Section 71 (b) of Securities Exchange Law 2013, Securities and Exchange Commission of Myanmar (the “Commission”) issued the Notification No.1/2019 (the “Notification”) on 12 of July 2019. This Notification now allows foreign investors to trade shares of listed companies on the Yangon Stock Exchange (YSX).
The Notification has two parts: the first one concerns further implementation and the second part is about the prerequisites for companies to be listed on the YSX.
The second paragraph of the Notification sets out the following conditions, which need to be implemented by the YSX:
- The date when the foreign investors can purchase shares of listed companies shall be announced by the YSX.
- The YSX shall announce all regulations related to foreign investments with the prior approval of the Securities and Exchange Commission .
- Only one type of shares shall be exchanged on the YSX.
- Trading activities shall be carried out within the legally authorised percentage of foreign ownership for listed company.
- Upon the completion of the trading activities, changes in the ownership structure need to be registered to the relevant securities companies. For foreign companies, the attribution of foreign ownership shall be calculated solely based on the directly owned local listed stocks.
The Notification’s third paragraph states that, with regards to the foreigner involvement in daily shares trading, the listed company of YSX must comply the following conditions:
- The listed company shall specify in advance to the YSX the maximum percentage of foreigner ownership of the company
- The listed company should have obtained the authorisation of the relevant regulatory authority prior to submitting a request to the YSX.
With respect to foreigners involvement in share trading, Securities and Exchange Companies must also comply with the instructions issued by the Commission related to the opening of securities and exchange account and shares trading. The instructions shall be issued on a non-regular basis based upon market activity and trading condition.
Through our office in Yangon, Duane Morris & Selvam advises corporations on investment, business and regulatory processes in Myanmar. For further information, please contact Mr Krishna Ramachandra (firstname.lastname@example.org), Mr Priyank Srivastava (email@example.com), or Mr CN Beilo (CBLo@selvamandpartners.com) or visit www.duanemorrisselvam.com. Duane Morris & Selvam is recognized as a leading law firm for Myanmar related Corporate, M&A and Projects (including Energy) work – The Legal 500 (2017 & 2018)