Authority of the JSE – Sections 1.1 to 1.27

The authority of the JSE is included in the Financial Markets Act, 2012 ("FMA") and in Section 1 of the JSE LR. JSE discretion to vary the application of the JSE LR has been removed throughout the JSE LR, except where discretion is required in respect of a particular JSE LR as the context requires. The JSE authority in Section 1 of the JSE LR is therefore not exhaustive and the FMA should be referred to for a full understanding of such authority. The JSE must:

• ensure that the eight general principles are observed in the application and interpretation of the JSE LR;
• grant, defer, refuse, suspend or remove a listing of securities (equity, debt and specialist securities) from the JSE list (Refer to Section 2 for new listings);
• prescribe, enforce and amend (subject to public consultation) the JSE LR with which ListCos, ListCo group directors, ListCo officers (prescribed officers/ company secretary/ies), sponsors, various experts, audit firms and individuals must comply; and
• review all listed securities annually and do so by requiring all ListCos to submit an annual compliance certificate evidencing annual compliance with the relevant JSE LR on the date of issue of ListCo's Annual Report ("AR") together with the AR. Non-compliance will eventually result in suspension of trading of ListCo securities. ListCos, ListCo group directors, ListCo officers (being prescribed officers including company secretary/ies), sponsors and designated advisers may object to a JSE decision via a formal "objection" procedure. However, only two matters are "appealable" in the JSE LR – a JSE-initiated delisting (termination) and deregistration of a sponsor.

The JSE has the power to suspend trading of ListCo shares ("suspension") at its instance when ListCo is in breach of the JSE LR. Prior to effecting such suspension, the JSE will consult with and receive representations from ListCo's Board ("consultation"). The JSE LR also provide for a non-consultative automatic suspension if ListCo is in breach of certain JSE LR, namely: financial reporting, submission of annual compliance certificate and cash company requirements. ListCo's Board can voluntarily request the JSE to suspend trading of its shares when ListCo:

• is in financial difficulties, including provisional liquidation, business rescue, cessation of business, Companies and Intellectual Property Commission ("CIPC") issue of a cease trading compliance notice or CIPC deregistration; or
• there is a false market, consisting of two levels of information in the market as a result of a leak of confidential information which is unable to be cured by announcement.

When a ListCo's securities are suspended, the ListCo must continue to comply with the JSE LR and must report the status of "curing" the suspension problem monthly to the JSE and quarterly to ListCo securities holders via the Stock Exchange News Service of the JSE ("SENS").

The JSE has the power to terminate a listing, subject to consultation with ListCo, and will do so after a ListCo has been suspended for a lengthy period of time (circa two years), has been unable to cure a suspension problem during this period and all shareholder value has been "lost".

A voluntary termination of a listing is fairly complex and is dealt with in the Corporate Action ("CA") tables.

Subject to consultation, the JSE is empowered to publicly or privately censure a ListCo, ListCo group directors and ListCo officers, in the event of a contravention of the JSE LR and may also impose a fine on such persons not exceeding the limit imposed by the FMA (being R7.5m per person escalated by the Consumer Price Index ("CPI") annually, commencing in June 2013). All or part of any fines imposed and received by the JSE will be used to settle external costs incurred and any project costs initiated for research and analysis. In the event of non-payment of a fine, the JSE may approach a competent court to obtain a civil judgment against the person concerned. The JSE may disqualify any person from holding the office of a ListCo director or ListCo officer for any period of time. Notwithstanding the deletion of the auditor accreditation model, the JSE may refer an Audit Person to the Independent Regulatory Board for Auditors ("IRBA") for disciplinary procedures when considered necessary.

The JSE is empowered to require disclosure of information from ListCos to the JSE and/or via SENS to ListCo shareholders ("sh/h") and the public.

Tabular summary

Listings Requirement			Summary of provision
Section 1			Authority of the JSE
1.1			General authority of the JSE
			General principles
1.2			General principles to ensure regulated market existence, appropriate listings, full disclosure of information, fair and equal treatment of ListCo sh/h, uniform application of the JSE LR and promote investor confidence.
1.3 – 1.7			Suspension of securities
1.3			The JSE may suspend a listing if the ListCo group is in breach of the JSE LR, fails to remedy a leak of Price Sensitive Information (“PSI”), enters business rescue, winding up, liquidation proceedings, is subject to CIPC deregistration proceedings or ceases business.
1.4			ListCo and/or sponsor must notify the JSE regarding 1.3 above.
1.5			Listing may be removed if ListCo fails to cure the suspension problem timeously (normally after two years).
1.6			The JSE LR allow for immediate suspension without consultation not exceeding 30 days if specific JSE LR require same (refer to breach of periodic financial reporting) or if a particular circumstance warrants such JSE action.
1.7			The JSE may impose conditions for lifting of any suspension.
1.8-1.10			Removal of listing of securities
1.8			Subject to 1.12, the JSE may remove a listing, in accordance with the FMA, in respect of a breach of the JSE LR, voluntary removal by ListCo directors, a successful takeover transaction or a redemption of securities provided the listing was first suspended.
1.9			ListCo and/or sponsor must notify the JSE regarding 1.8 above.
1.10			Voluntary application for removal of listing requires 75% independent shareholder approval of an ordinary resolution (excludes the offeror, offeror associates and offeror concert parties) plus an offer must be made to shareholders that is opined on as being “fair and reasonable” by an independent professional expert (“IPEx”) (compliance with Takeover Law is also required) and by the ListCo Independent Board.
1.11			Continuing obligations by ListCo during suspension – all JSE LR continue to apply, JSE (monthly) and ListCo sh/h notifications (quarterly) required regarding status of remedy.
1.12			Threat of suspension/removal requires the JSE to inform ListCo of the reason(s), inviting representation from ListCo as to why suspension/removal should not be effected.
1.13			Annual compliance certificate on date of AR issue required. Non‑compliance will result in suspension/removal.
1.14 – 1.16			Disclosure of information allows the JSE to force disclosure and announcement about any/all affairs of ListCo
1.17 – 1.20			Censure and penalties, information and publication
			The JSE is empowered to publicly or privately censure a ListCo, ListCo directors and ListCo officers in the event of a contravention of the JSE LR and may also impose a fine on such persons not exceeding the limit imposed by the FMA (being R7.5m per person escalated by CPI annually, commencing in June 2013). Fines imposed and received by the JSE will be used to settle costs incurred and project costs for research and/or analysis. In the event of non-payment of a fine, the JSE may approach a competent court to obtain a civil judgment against the person concerned. The JSE may disqualify any person from holding the office of a director of a ListCo for any period of time. The JSE is empowered to require disclosure of information from ListCos and to convene investigations and hearings if necessary. The JSE has absolute discretion to publish information or require ListCos to publish information in relation to any of the abovementioned actions taken.
1.21 – 1.23			Objection procedure against a JSE decision is available to ListCos, ListCo directors, ListCo officers, sponsors and designated advisers.
1.24 – 1.25			No JSE liability for any actions taken in terms of the JSE LR.
1.26 – 1.27			Amendments to the JSE LR
			Subject to the FMA, the JSE is empowered to amend the JSE LR through a public consultation process.