How to List

Before you decide to list your business on the JSE, we advise you to consider the following or simply contact businessdevelopment@jse.co.za

Benefits of a JSE listing

There are a number of advantages to listing your business on the Johannesburg Stock Exchange:

• Improved capital raising ability, which can be used for organic growth or to fund acquisitions.
• Improved corporate reputation and profile, both externally and internally. Access to a diversified, deep investor base consisting of both local and international investors.
• Enhanced relations with many stakeholders such as banks, suppliers, distributors and customers.
• The JSE was ranked first worldwide for the regulation of securities exchanges which gives extra comfort and protection to investors.
• Enables the company to offer share option incentives, which increases the ability to attract and retain high quality talent.
• Compels the company to improve its reporting, meaning better information is available for decision making, both internally and externally.
• Listing increases liquidity for investors and allows shareholders to realise the value of their investments through a public trading platform.
• Allows you to facilitate broad-based black economic empowerment (BEE) deals.

Why list on the JSE?

The Johannesburg Stock Exchange (JSE) is one of the top 20 exchanges in the world in terms of market capitalisation. It is Africa’s premier exchange and has operated as a market place for nearly 120 years. The international investment community considers the exchange to be a mature, efficient, secure market with world class regulation, trading, clearing, settlement assurance and risk management. The exchange also has extensive surveillance capabilities. The JSE is well positioned to help you leverage your listing to its maximum.
Listing on the JSE allows you to:

• Enjoy local analyst coverage as well as high media interest.
• Attract international investors who are easily able to trade in JSE-listed shares without any restrictions.
• Trade your shares securely and efficiently on the London Stock Exchange’s trading system.
• Be eligible for inclusion in the FTSE/JSE Africa Index Series, thus creating additional exposure for your company both locally and internationally.
• Marketing your business to investors with the assistance of the JSE Business Development team.

Costs of  listing

The cost of listing your company depends on a number of factors and will be influenced by your objectives. Typical costs to consider include:

• sponsor (Main Board and Africa Board), designated advisor (AltX)
• attorneys
• auditors
• transfer secretary
• printing of prospectus and/or other documentation
• marketing, PR, IR and advertising
• JSE listing fee (once off)
• annual JSE listings fee and
• sundries.  

Contact

If you are interested in listing your company, or if you would like more information, please call the JSE Business Development team on: +27 11 520 7253 / 7027 / 7130 or E-mail  businessdevelopment@jse.co.za

Considerations before listing

The decision to list your company’s shares on a stock exchange is a significant one. It must be based on an honest and realistic assessment of your company and it must be made after full consideration of all the alternative routes by which your business might achieve its goals.

Consider the following questions:

• Where is our current business plan taking us?
• What are our likely capital requirements?
• How strong is our competitive position and how can it be maintained or strengthened?
• What is the quality of the management team, both at board level and throughout the company and does it need strengthening?
• Are all members of management working to the same agenda?
• What outside advice and perspective - such as non-executive directors - does the board have access to?
• What will attract investors to the company and are we ready to commit time to communicating with investors?

Keep the following factors in mind:

• Possible loss of control - the sale of equity in the company would involve ceding a degree of management control to the outside shareholders, especially with regard to significant acquisitions;
• Disclosure requirements and ongoing reporting - a much higher degree of disclosure and reporting is required, which may require an additional investment in management information systems and more rigorous application of compliance controls;
• Loss of privacy - greater accountability to outside shareholders means that the directors lose much of the privacy and autonomy they may have enjoyed whilst running an unlisted company. The company’s heightened profile also means that any underperformance receives a greater degree of media coverage which may have a direct effect on the share price;
• Costs and fees - the overall costs of listing and maintaining the listing must be considered and understood before embarking on the process;
• Management time - the listing process, continuing obligations and other listing related duties may require additional management time; and
• Directors’ responsibilities and restrictions - the responsibilities and restrictions placed on directors are complex and include disclosure of total remuneration packages, restrictions on share dealing and the communication of price-sensitive information.

• your company,
• its management,
• resources,
• stage of development,
• long-term strategy,
• goals and
• future prospects.

• the Main Board,
• Africa Board and
• AltX.

The decision to list on these markets depends on factors like the size of your company, your funding requirements and what you would like to achieve with your listing. Listing may be just what you need to take your business to the next level.

There are many specific requirements that you need to meet which are in the JSE Listing Requirements. 

Find a Sponsor or a DA

Sponsors

The appointment of a sponsor is required by the JSE to be able to list on the Main Board or the Africa Board. The sponsor's main responsibilities include:

• Advising the company about the listings requirements and the directors of their responsibilities and obligations
• Ensuring that the company is suitable to list
• Submitting the listing documentation to the JSE and
• Fulfilling a liaison role between the JSE and the company.

A list of JSE Approved Sponsors

Designated Advisors

The main role of a designated advisor (DA) is to competently, professionally and impartially advise the applicant company on all its responsibilities during the application process and its responsibilities to maintain its status once listed.

A list of JSE Approved Designated Advisors

The designated advisor must ensure that:

• the company complies fully with the applicable JSE and AltX listings requirements
• all relevant documentation required by the listings requirements has been submitted
• each company brought to the JSE by the DA is suitable for listing
• each pre-listing statement is compliant with the listings requirements and has been completed accurately and fully,
• all directors of each company have the necessary expertise and experience, understand the nature of their responsibilities under the listings requirements, the Companies Act, the SRP Code and GAAP, are aware of the expectation to prepare and publish all information necessary and that directors’ declarations need confirmation and verification;
• all new appointees to the board of directors of the company are fully briefed as to the nature of their responsibilities;
• all directors complete the Directors Induction Programme within two months of their appointment (if newly appointed) or upon confirmation of acceptance on AltX;
• the directors of each company are informed on time of any amendment to the listings requirements or other regulations;
• all periodical financial information announcements are reviewed with the directors prior to publication to check accuracy and full disclosure;
• regular reviews are held of the company’s actual trading performance and financial condition to ensure appropriate disclosure of information to investors;
• at least one of the DAs attends all company board meetings in an advisory capacity.  

Requirements and checklists

The full JSE Listings Requirements

Responsibilities of being a listed company

In deciding if listing is appropriate for your company, it is important for you and your executive team to understand and accept the following responsibilities of being a listed company:

• Sharing corporate control
  By becoming a listed company, you will be relinquishing exclusive control of your company’s future, as the number of company owners (shareholders) will increase. You will require shareholder approval to do certain corporate actions as well as having to share the financial benefits and losses with shareholders.
• Managing to maximise shareholder value
  As a listed company, you will be accountable to shareholders and responsible for the enhancement of shareholder value. Directors will be required to diligently perform their fiduciary responsibilities as well as maintain a high quality of investor relations and communication.
• Sharing strategic information
  As a listed company you will be required to disclose all relevant information to both shareholders and regulators. To build and maintain shareholder loyalty, it is advisable that you share strategic information with your current and potential shareholders on a regular basis.
• Ongoing costs
  As a listed company, you will be responsible for the following ongoing costs:
  • Continuing fees to corporate advisors, including auditors, attorneys and sponsors or designated advisors.
  • An annual fee.
  • Production of information for shareholders and regulators.
• Relinquishing control over personal assets invested in the company
• Attending a Directors Induction Programme (DIP) is a compulsory education programme for all executive and non-executive directors of AltX companies.

Dual listings

The JSE is your entry to a continent rich in capital and resources. Dual listings offer you marginal cost with maximum value. Listing your company on the JSE as well gives you the opportunity to:

• Obtain a diversified and extensive shareholder base in South Africa which will facilitate increased liquidity and alternative capital raising opportunities.
• Tap into local knowledge, skills and interest.
• Use your listing as a springboard into the rest of Africa.
• Access deep pools of capital relative to other African markets.
• Use your shares as local currency for transactions.
• Increase and diversify your company’s pool of liquidity.
• Facilitate compliance with South African government charters on broad-based black economic empowerment.
• If you are already listed elsewhere, your listing on the JSE can be fast-tracked as the JSE recognises exchanges that are members of the World Federation of exchanges.

There are three boards to choose from:

• The Main Board
• Africa Board
• AltX.

For mining companies there are some specific additional requirements:

A Competent Persons Report is mandatory for the JSE Main Board, Africa Board or AltX and the application needs to be compliant with one of these three codes:

• SAMREC (South Africa)
• JORC (Australia)
• Ni 43101 (Canada)

No profit or profit history is required but assets must be under the control of the company for at last three years.

Methods of listing on the JSE

Your listing can either be via the ‘front’ or ‘back door’.

• introduction,
• a public offer or a
• private placing, in conjunction with the issue of a prospectus or a pre-listing statement.

Introduction

An introduction is suitable if you do not need to raise capital and you have an existing wide spread of shareholders. This is the cheapest and quickest means of entry, since there is no offer to the public and minimum formalities are required. A pre-listing statement is required that contains salient information about the company.

Public offer

An public offer may be an offer for subscription or an offer for sale.

In an offer for subscription, members of the public are invited to subscribe for un-issued shares and the proceeds accrue to the company.

In an offer for sale, existing shareholders invite subscribers to purchase their shares and therefore the proceeds accrue to the sellers.

This method requires the publication of a prospectus, which must be approved by and registered with the Registrar of Companies.

• allows for a wide spread of shareholders
• marketing advantage of public attention and interest and
• may obtain the best price through a larger market.

Private placing

A private placing is an offer of shares to selected parties where shares are ‘placed’ or offered to subscribers by the company as the result of private negotiations. A private placing with an institution may help to ensure a stable, long term shareholding in the company and may also facilitate the raising of funds in the event that the company wishes to raise additional capital in the future by way of a rights offer.

The advantages of a private placing include:

• allowing for major preferred shareholders
• generation of goodwill through placing with customers, suppliers and staff,
• relatively low cost
• suits a specialised business with limited investor appeal and
• the issue price may be privately negotiated.

A back door listing takes place either by means of a

• cash shell or
• a reverse listing.

Cash shell

A listed cash shell company acquires a viable business, either for cash, or for the issue of additional shares in the cash shell company. A cash shell is a listed company whose assets consist entirely or mostly of cash or shares because it has disposed of all, or a substantial part of its business.

Reverse takeover

A listed company acquires a larger but unlisted company or business. This results in a change of control of the shareholding of the listed company, and also requires the publication of a listing statement.

In a reverse takeover, a compatible listed company will acquire the unlisted company with the purchase consideration being paid by the issue of new shares in the listed company. These new shares must be sufficient in number and value to ensure that the shareholders have a controlling interest in the listed company after the issue of new shares.