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JSE looks to tighten listing rules

The JSE wants to increase the minimum capital required for a primary listing, as well as impose stricter rules for secondary listings.
The JSE is seeking to improve its corporate governance. Picture: Moneyweb

The Johannesburg Stock Exchange (JSE) wants to increase the minimum capital amount required for a primary listing and is considering stricter rules on secondary listings as it seeks to improve corporate governance.

Africa’s biggest securities exchange published its proposals in a public consultation paper circulated on Wednesday, aiming to ease investor concerns about listed companies following recent high-profile corporate scandals.

The paper proposes increasing the capital amount required for a primary listing from R500 million ($34 million), but did not suggest a new minimum level.

On secondary listings, the exchange could limit which jurisdictions would be suitable.

“The intention would be for the JSE to create a pre-approved list of foreign exchanges with regulatory regimes with which the JSE is comfortable,” JSE says in the consultation paper. “This approach is followed by peer global exchanges such as the Australian Stock Exchange and the Toronto Stock Exchange.”

The Johannesburg exchange is already crafting tighter disclosure rules for companies with listed debt instruments, announced in May, as part of efforts to improve corporate governance and increase transparency.

It has been hit by scandals including that of retail group Steinhoff International. Steinhoff’s shares crashed last December after the group revealed “accounting irregularities” and its CEO quit, prompting a JSE investigation into whether the group broke the exchange’s disclosure rules.

The consultation will conclude on October 22.

“Depending on the nature of the comments received in response to this paper, it may be appropriate to convene a colloquium to discuss the improvement of governance,” JSE’s Chief Executive Nicky Newton-King said in a statement. 

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