JSE Suggests Changes to Listing Requirements for Market Segmentation Introduction

The Johannesburg Stock Exchange (JSE) has announced a groundbreaking initiative to reposition its Main Board into two segments, the Prime and General Segments, in order to provide smaller companies with more flexibility and support in the capital markets.

The Market Segmentation Project, proposed by the JSE, aims to create a regulatory environment that is tailored to the size and liquidity of Main Board companies, while also maintaining investor confidence. The feedback from stakeholders has been overwhelmingly positive, with many supporting the repositioning of the Main Board into two distinct segments.

Some of the key reforms proposed for the General Segment include introducing more flexibility for capital raisings, removing fairness opinions for related party transactions, and simplifying financial reporting requirements. These reforms are designed to reduce regulatory burden and costs for smaller companies, while also supporting capital raisings and financial markets activity.

Andre Visser, Director of Issuer Regulation at the JSE, emphasized the importance of these reforms in attracting investment and boosting investor confidence. He highlighted the role of the JSE as Africa’s largest stock exchange in creating an environment that fosters growth and enhances investor engagement.

The proposed amendments to the Listings Requirements are now open for public comment until May 20, 2024, and will be subject to approval by the Financial Sector Conduct Authority (FSCA). This initiative is part of a broader set of reforms aimed at simplifying regulations and enhancing the attractiveness and effectiveness of the South African capital market.

Overall, the Market Segmentation Project represents a significant step towards creating a more dynamic and supportive environment for smaller companies on the JSE Main Board, ultimately contributing to the growth and development of the capital markets in South Africa.