On 9 October 2015, the JSE announced amendments to the JSE Listings Requirements (Requirements) that will come into effect on 9 November 2015.

Click here for the marked-up revisions to the Requirements. The following key amendments to the Requirements should be noted:

Amended definition of price sensitive information

The concept of "price sensitive information" has often been the subject of debate. With a view to clarifying it, the definition in the Requirements has been amended to bring it largely in line with the definition of "inside information" in the insider trading provisions of the Financial Markets Act 2012. In addition, the JSE has issued a Practice Note (2/2015) to assist directors and sponsors of issuers to determine whether information constitutes price sensitive information. The Practice Note provides guidance on the two key elements of the new definition, namely, the "specific or precise" nature of the information and the "material effect" of such information on the price of the issuer's securities. In light of these changes, the JSE advises issuers to have a policy in place to assist their directors in applying the provisions of the Practice Note on whether any information relating to the issuer constitutes price sensitive information.

Additional disclosure requirement relating to gender diversity at board level

The amended Requirements require issuers to have a policy on the promotion of gender diversity at board level and encourage issuers to set voluntary gender diversity targets and to report on the achievement of these targets. In addition, issuers must disclose in their annual report how the board of directors or the nomination committee have considered and applied the policy of gender diversity in the nomination and appointment of directors.

Repurchase of securities by financial services companies

The amended Requirements exempt issuers that qualify as financial services companies from complying with the requirements for repurchase of shares in the Requirements where such issuers (or the subsidiary, which is a financial services company, of an issuer) purchase, on an arm's length basis, their own securities (or in the case of a subsidiary, the issuer's securities) in the normal course of their financial services offering to clients or where such securities are held by such financial services company for the benefit of (or to hedge an obligation to) a third party. These securities are then also not treated as treasury shares in the issuer, and are thus not subject to the transactional and voting restrictions applicable to treasury shares under the Requirements.

Disclosure requirements in respect of subsidiaries

Previously, issuers had to make certain disclosures in relation to all their subsidiaries. The amended Requirements provide that certain disclosures only need to be made in relation to major subsidiaries and not to all subsidiaries. However, in some such instances, disclosure is still required in relation to subsidiaries that are not material subsidiaries where the matter nevertheless remains material to the issuer itself.

Disclosure requirements for mineral companies

The disclosure obligations of mining companies and exploration companies have been amended to align with the type of activities carried out by these companies (mining or exploration activities or both). As a result, exploration companies need only make disclosures relevant to their exploration activities, and need not make disclosures applicable to mining activities.

Amendments to Requirements in relation to property entities

The JSE made a number of amendments in relation to property entities, including the eligibility criteria for the listing of property entities and the criteria to obtain REIT status on AltX. These amendments aim to provide as much certainty to the JSE as possible that the applicant issuer is factually a property entity and that, if it is applying for a listing based on its profit forecast, that such forecast will be met. Such profit forecasts are thus now required to be based solely on contracted revenue and may not include near-contracted or uncontracted revenue. Short-term rental revenues are also now subject to more stringent requirements. Click here for the marked-up provisions of the JSE Listings Requirements on property entities.

Published by Webber Wentzel