JSE’s Response to Minister’s Budget Announcement on
Prudential Regulation
February 24, 2011
Johannesburg, 23 February 2011 – The Johannesburg Stock
Exchange (JSE) is pleased to note today’s announcement of Treasury’s move to
finalise the prudential regulatory framework for the regulation of foreign
exposure for institutional investors. The announcement was part of today’s
Budget speech given in Parliament by Finance Minister Pravin Gordhan.
While Treasury has indicated that it intends to consult on the complex
issue of how best to define foreign and local assets for the purposes of
prudential regulation, the JSE welcomes the confirmation in today’s Budget
speech that any change in the classification of foreign companies listed on the
JSE will be forward looking only and will not affect the current status of
foreign companies listed on the JSE. This ends speculation about the
classification of the existing dual listed companies (known as the “London
Five”), which include some of the largest companies listed on the JSE. These
will continue to be treated as domestic companies despite their foreign
domicile. During 2010, trade in five of these companies – including Anglo
American, BHP Billiton, SAB Miller, Old Mutual and Investec – made up 9% of all
shares traded, 11% of the total number of trades and 24% of all value traded on
the JSE.
National Treasury’s classification of listed companies – as
domestic or foreign inward listings – is important as it determines the manner
in which South African investors, particularly institutions, are able to invest
in listed companies.
“The JSE has had detailed conversations with
National Treasury about this topic over the years. The exchange supports
Treasury’s gradual relaxation of exchange controls and recognises the
significant steps taken in this regard over the past number of years. We are
pleased that the ‘London Five’ will continue to be treated as domestic
listings,” says JSE CEO Russell Loubser.
“Once we have reviewed
Treasury’s discussion document, the JSE looks forward to engaging with National
Treasury on the most appropriate way to classify other foreign companies with
listings on the JSE,” says Loubser. “It is important that finality is reached,
so that South Africa is able to attract more foreign listings into South Africa
so that South Africans can use South African infrastructure to diversify their
investment portfolios and so that the country can play a meaningful role as a
gateway for investment into African markets.”
FOR MEDIA
ENQUIRIES:
Roz Thomas/Victoria Williams
Corporate
Communications Consultants
Tel: (011) 463 2198
Email: victoria@corpcom.co.za
rozt@corpcom.co.za
On
behalf of JSE CEO Russell Loubser and Deputy CEO Nicky Newton-King
JSE Ltd
Tel (011) 520 7229