The new Black Economic Empowerment (BEE) Segment came into effect on 11 November this year, aimed at addressing the operational and regulatory needs of BEE companies, including special purpose vehicles created with the specific objective of facilitating a BEE transaction (BEE SPVs). Noteworthy is that Tamela was instrumental both in the creation of the original Section 4.32 of the JSE Listings Requirements in 2015 as well as the development of this new segment!
This article highlights that BEE SPVs – which in addition to specific requirements on listing – must still adhere to a range of continuing obligations including the following:
Approval for material changes
Any material changes to a BEE SPV governing agreements or terms and conditions of securities must receive majority approval from security holders in a general meeting. Formal, minor, or technical adjustments, corrections of manifest errors, or legally mandated changes are exempt. Early engagement with the JSE is required to determine if such approval is necessary.
Disclosure of new issuances and amendments
BEE SPVs must promptly publish details of any new securities issuance or amendments to existing securities on the JSE’s Stock Exchange News Service (SENS) unless the JSE agrees otherwise.
Annual financial statements
The BEE Segment requires BEE SPVs to publish annual financial statements within four months of the financial year-end. Beginning 30 June 2025, these statements must be accessible via a JSE SENS-enabled web link to the full financial statements or annual report. As per current practice, BEE SPVs must include the website details on SENS where the full financial statements and related reports can be accessed.
Interim financial statements
A new requirement, applicable for interim periods commencing 30 June 2025, mandates that BEE SPVs prepare and publish interim financial statements, ensuring that stakeholders receive periodic updates on financial performance throughout the year. The availability of the interims on the issuer’s website must be published on SENS.
Corporate governance requirements
BEE SPVs are required to establish an audit committee to oversee financial reporting and internal controls, ensuring compliance with recognised accounting standards. Governance measures further mandate a balance of power and authority within the company, supported by the duties of an appointed company secretary. Additionally, issuers must apply the King IVTM Code disclosure and application regime, specifically Part 5.3, which addresses governing structures and delegation.
Notification of BEE verification agent changes
Any change to the BEE verification agent must be promptly communicated to the JSE to ensure continuity and compliance with BEE verification standards.
Trading Statements
In addition, BEE SPVs are now required to issue trading statements in compliance with Section 3.4(b) and comply with additional Section 3 requirements such as voting rights, shareholder spread, notification of changes in auditors, and appointments of auditors and reporting accountants, from which they were previously exempt.
How can we help?
Tamela provides tailored advisory services, including sponsor services, designed to address the technical and regulatory challenges faced by BEE SPVs under the new JSE BEE Segment requirements.
For more information, contact Ethan Fenwick at +27 11 783 4907 or ethan@tamela.co.za.