The JSE will be reviewing all its listings requirements with the objective of further simplifying its requirements, as part of its ongoing efforts to create an enabling listing environment and attract local and international listings.

The project is aimed at simplifying the listings requirements using plain language to record concise regulatory objectives, thereby aiding better understanding and application of the requirements by listed companies, sponsors and investors.

An additional benefit of the simplification will be the significant reduction in the volume of the listings requirements, the bourse says.

During the process, the JSE will also assess the regulatory relevance of each provision and reduce 'red tape' where possible to ensure that the listings requirements are fit for purpose and aimed at an effective and appropriate level of regulation. Therefore, any amendments beyond simplification will be clearly identified and the rationale explained.

“As we continue to create this enabling listings environment, a core component of the Simplification Project is to maintain the level of regulation and transparency in disclosure that the South African financial markets are accustomed to,” says JSE issuer regulation director Andre Visser.

The JSE aims to complete the project within 12 to 18 months through a staggered and open consultation process. It has released its first four simplified sections.

IN-PROGRESS INITIATIVES
In a progress update on the JSE's other listing reforms, the JSE removed the obligation to produce an abridged report when the issuer has published its audited annual financial statements on the issuer’s website. This follows its initiatives to reduce red tape.

The JSE further simplified the financial reporting requirements and removed provisions that do not provide regulatory value. These changes will save time and costs for companies and provide investors with relevant and appropriate information to make informed investment decisions, it says.

Further, the bourse had also taken active steps to expand on its offerings in specialist securities, through the introduction of Listings Requirement to cater for the listing of actively managed certificates and actively managed exchange-traded funds.

Additionally, given developments in other leading international markets, the JSE introduced weighted voting shares for applicants seeking a listing on the main board.

The proposed amendments in terms of weighted voting shares are accompanied with appropriate safeguards to afford the necessary investor protection and will allow the JSE to remain competitive and to attract new listings, it added.

The JSE said that although its current special purpose acquisition companies (SPACs) offering is accessible and flexible, it has made amendments to align with international leading markets to ensure the attractiveness and competitiveness of SPACs to issuers and investors, it said.

Further, in terms of free float for new listings, the JSE has reduced the 20% free float threshold to 10%, as it has been identified as a deterrent to listing.

"Currently one type of holdings of securities that does not qualify as free float on listing is any holdings of 10% or more in the securities of an issuer, irrespective of such shareholder’s relationship with the company. The JSE removed the 10% holdings free float exclusion, but introduced a minimum number of shareholders and a more appropriate exclusion for controlling shareholders to align with certain peer exchanges," the JSE says.

Meanwhile, the JSE is proposing the removal of the Auditor Accreditation Model. In line with support from the market, the JSE consulted with the Independent Regulatory Board for Auditors and formulated these proposed amendments to the listings requirements and debt listings requirements.

These amendments are in the final stages of public consultation, after which the JSE will seek approval from the Financial Sector Conduct Authority (FSCA), it says.

As part of its Section 19 Rejuvenation Project, the JSE proposes to remove Section 19 from the listings requirements, also called the equity requirements, and to combine the provisions that deal with specialist securities with the debt listings requirements.

"The debt listings requirements will now include specialist securities, and the combined set of listings requirements will now be known as the debt and specialist securities listings requirements, or DSS Requirements. The equity requirements will now be limited to equity securities and the DDS Requirements will focus on debt securities and specialist securities," the JSE says.

It adds that the aim of the project is to remove duplication and potential regulatory arbitrage between the existing debt requirements and Section 19 specialist securities of the listings requirements with regard to structured products and asset-backed debt securities.

Additionally, the aim is to standardise the ongoing obligations between the debt securities and the specialist securities, to provide regulatory relief for issuers who have both debt and equity securities listed on the JSE, and to ensure that the DSS Requirements are fit for purposes aimed at an effective and appropriate level of regulation.

"We believe that the revised DDS Requirements will be easier to understand and apply for both issuers and sponsors. All amendments have, therefore, also been clearly identified and the rationale explained," the JSE says in a statement.

Meanwhile, the JSE has proposed to introduce a bespoke black economic empowerment (BEE) section to the listing requirements. This will consolidate the requirements applicable to the current BEE segment.

The requirements take into account the existing framework and applicable principles to list a BEE special purpose vehicle (SPV) based on current asset-backed securities regime. The existing BEE regime has been maintained and incorporated into the new section, including the BEE SPV provisions.

"The amendments to Section 19 and the BEE Segment are in the final stages of public consultation, whereafter the JSE will seek approval from the FSCA."

Further, the JSE has expanded its real estate investment trust (Reit) offering beyond traditional property to unlock more opportunities in the Reit environment and attract listings.

The JSE is now able to list infrastructure Reits, provided that they meet the definition of property as contained in the listings requirements, the bourse said.