SRI LANKA Law and Practice Contributed by: Ayanthi Abeyawickrama, Varners
tral Bank of Sri Lanka, the Insurance Regulatory Commission of Sri Lanka, or the Telecommu - nications Regulatory Commission of Sri Lanka) before completing any merger, acquisition or corporate restructuring within those sectors. 6.2 Merger Control Procedure While there is no unified merger control regime, certain sectors impose mandatory notification and approval requirements that must be com - plied with prior to the completion of a merger or acquisition. In the banking and finance sector, approval must be obtained from the Central Bank of Sri Lanka under the applicable financial sector statutes (such as the Banking Act or the Finance Busi - ness Act). The parties must submit a formal application with relevant corporate and financial documents, including details of the proposed transaction and its impact on capital adequacy and market concentration. The review period varies but typically takes several weeks to a few months depending on the complexity of the transaction and regulatory queries. In the telecommunications sector, mergers or acquisitions involving licensed operators must be notified to the Telecommunications Regula - tory Commission of Sri Lanka (TRCSL). There is no codified timeline, but the TRCSL assesses such transactions on a case-by-case basis, con - sidering market effects, spectrum allocation and technical capacity. Approval is generally required before completing any change in control. For listed companies, any acquisition or takeo - ver falling within the scope of the Takeovers and Mergers Code (the “TOM Code”) requires prior SEC approval. The TOM Code stipulates that once an offer is announced the entire takeover process must be completed within 60 calen -
dar days, unless an extension is granted by the SEC under special circumstances. The acquirer must disclose the offer and obtain SEC clear - ance before any shares are acquired above the relevant thresholds. In all these cases, parties must comply not only with sector-specific procedural steps but also with any disclosure obligations applicable under the Companies Act, the Listing Rules or other relevant laws. There are currently no standard - ised pre-merger filing procedures or timelines for unregulated sectors. 6.3 Cartels Anti-competitive agreements and concerted practices are primarily regulated under the Consumer Affairs Authority Act, No 9 of 2003. This generally prohibits agreements, decisions or practices that have the effect of substantially lessening competition in any market in Sri Lanka. This would include classic cartel conduct such as price fixing, bid rigging, market allocation and collusive limitation of supply or production. The Consumer Affairs Authority (CAA) is the designated enforcement agency empowered to conduct investigations, issue directions and take administrative action against anti-competi - tive conduct. However, the existing legal frame - work is limited in both scope and enforcement capacity. It does not clearly distinguish between horizontal and vertical agreements, lacks a for - mal leniency or whistle-blower mechanism, and does not provide for significant civil or criminal penalties. Moreover, enforcement tends to be reactive and complaint-driven, rather than pro - active or systematic. The Act does not explicitly require that anti- competitive conduct occur within the country’s borders; rather, the relevant test is whether the
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