Since the last time Tamela covered the topic of proposed amendments to the JSE Listings Requirements, the amendments regarding the Financial Reporting Requirements (mainly dealt with in Sections 3 and 8), the Weighted Voting Share Structure, Free Float and Public Shareholders as well as Special Purpose Acquisition Companies (all mainly dealt with in Section 4) have been promulgated.
The JSE have proposed further amendments to the JSE Listings Requirements, which are dealt with briefly below:
Auditor Accreditation Model Removal (Section 22)
The JSE is proposing the removal of the auditor accreditation model given that the Independent Regulatory Board for Auditors (IRBA) is the regulatory body for auditors, and the fact that significant changes and improvements have occurred within the areas of governance, auditing standards, the Companies Act, 2008 (Act No. 71 of 2008), as amended, regulatory oversight by audit regulators, and the JSE listings Requirements themselves.
The JSE needs to be notified of auditor changes (including terminations and non-reappointments) within two business days following the event. In the case of terminations, non-reappointments and resignations, a letter from the auditor must be provided, which sets out not only the reasons therefore but also details any reportable irregularities that were reported by the auditor to its regulator in the past 12 months.
The audit committee corporate governance requirements in Section 3.84(g) and the procedure for the appointment of auditors now dealt with in Sections 3.86 to 3.88 have been expanded on to cater for the fact that the whole of Section 22 (as well as Forms E1-E4) is likely to be removed as proposed.
The definitions are to be amended to remove accreditation and the requirement for IFRS advisors, reporting accountants and reporting accountant specialists as these roles will now be fulfilled by a suitably qualified auditor.
BEE Segment (Section 23)
The JSE is proposing the addition of a new Black Economic Empowerment (BEE) section which incorporates:
- a BEE special purpose vehicle (SPV) being a special purpose entity created with the specific objective of facilitating a BEE transaction,
- the old Section 4.32 requirements (including BEE Contract and Verification Agent),
- aspects of the old Asset Backed Securities (Section 19 Specialist Securities),
- references being expanded on to cater for the proposed new Debt and Specialist Security Requirements, as well as Mineral Companies (Section 12) and Property Entities (Section 13), as well as bringing in the concept of an operating BEE company.
How can we help?
Tamela is an approved JSE Equity sponsor and can assist listed companies and those looking to list in complying with the JSE Listings Requirements and understanding the content and impact of proposed amendments to these.
Furthermore, Tamela was intricately involved in the conceptualisation and drafting of the new Section 23.
For more information, please contact Amanda Markman on +27 82 499 2911 or Amanda@tamela.co.za.