Podcast Summary
JSE segmentation: The JSE's main board will be segmented into prime and general segments to better regulate and accommodate smaller and medium-sized companies.
The Financial Sector Conduct Authority (FSA) and the JSE Limited (JSC) have recently approved amendments to the JSE's listing requirements as part of a market segmentation project. These changes will segment the JSE's main board into two distinct sections: the prime segment and the general segment. The primary objective of this project is to provide a suitable regulatory framework for smaller and medium-sized companies listed on the main board. The amendments will take effect on September 23, 2023. Companies will remain in the prime segment by default, but they can voluntarily consider whether the proposed amendments are suitable for them if they wish to move to the general segment. The aim is to create a more fitting and purposeful listings environment for smaller companies on the main board.
Companies transfer to general segment: Companies outside of JSC index can apply to transfer to general segment from Sept 20th, gaining access to a more flexible regulatory framework and potential cost savings based on survey results revealing the need for efficient capital raising, reduced financial reporting costs, and more time for business management. Implementation of several proposals from Sept 23rd.
Starting from September 20th, companies outside of the JSC all share index will be able to apply for a transfer to the general segment, gaining access to a more flexible regulatory framework and potential cost savings. This move comes after a survey conducted among listed companies, sponsors, and investors in 2023, revealing the need for a more enabling environment for raising capital efficiently, reducing financial reporting costs, and giving management more time to focus on business management. From September 23rd, several proposals will be implemented to address these objectives.
JSE Flexibility Changes: The JSE is implementing changes to offer more flexibility and cost savings for listed companies, including extended financial result submission deadlines and rolling share issuance authority, aiming to keep existing companies and attract new applicants.
The JSE is implementing changes to provide more flexibility and cost savings for companies listed on their general segment. This includes allowing an extra month for financial result submissions and providing rolling authority for share issuance over a 12-month period. These changes aim to keep existing companies on the exchange and attract new applicants, as they offer significant cost savings and effectiveness. The primary focus is on enabling the current environment for existing companies, but the attractive framework could also encourage more listings. These modifications are expected to provide numerous benefits, including faster capital raising and increased flexibility for companies, while also protecting investors with strict limitations. Overall, these changes should make the JSE a more appealing option for companies seeking to list.
JSE's new segment for growing companies: The JSE introduces a new segment, the 'General Segment', to attract more companies, particularly those not yet eligible for index inclusion, with a focus on transparency, disclosure, and proper corporate governance.
The Johannesburg Stock Exchange (JSE) is introducing a new segment called the "General Segment" to attract more companies to list, particularly those that don't currently qualify for index inclusion. This segment will offer more flexibility for companies to grow and eventually move up to the prime segment. The JSE emphasizes transparency, disclosure, and proper corporate governance in this model, which was developed after consulting with issuers, sponsors, and investors. The focus is on companies that are not yet eligible for the all-share index, but as they grow and become more liquid, they can eventually move up. The JSE's oversight role remains crucial, ensuring that transparency, disclosure, and corporate governance are maintained in this more relaxed regulatory environment. This new segment is an exciting development for the JSE, offering innovative solutions for companies at various stages of growth.