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What is an Empowerment Segment Listing?
The JSE’s Empowerment Segment allows for the listing and trading of restricted share schemes in a regulated, controlled environment. BEE share schemes are one example of a restricted share scheme, where previously disadvantaged South Africans have an opportunity to own a stake in a company and participate in its growth.
The JSE has expanded our Empowerment Segment listing requirements and rules to enable the listing and trading of a range of restricted shares which may previously have traded only on the “Over-the-counter” (OTC) market. These include – but are not limited to – BEE share schemes. The restrictions of a particular scheme are incorporated in the scheme’s MOI. The JSE has the discretion to approve an Empowerment listing, subject to the nature of the share restrictions. Requirements include that the restrictions should support empowerment objectives, must be properly enforceable and must meet the objectives of the Financial Markets Act (the “FMA”, Act No. 19 of 2012).
Restricted share scheme listings are subject to a discount on JSE annual listing fees.
What does it do?
The JSE’s Empowerment Segment caters for companies that have implemented BEE or other empowerment share schemes, and allows participants to buy and sell shares in a well-regulated environment. In order to protect investors, the Financial Services Board requires that shares be traded on a licensed exchange.
To ensure that trading in the shares meets the selected Empowerment restrictions, an issuer agent is appointed to conduct a verification process on each shareholder and to maintain the integrity of the share register.
Who is it for?
- Empowerment Segment listings are appropriate for any company wishing to implement BEE share schemes, or any other restricted share scheme which has empowerment as a primary objective.
- Investors may buy and sell Empowerment Segment shares, as long as both parties comply with the relevant share restrictions. These restrictions are detailed in each scheme’s MOI.
- Note that companies do not have to be listed on the JSE (or any other exchange) in order to list qualifying share schemes on the JSE’s Empowerment Segment
What are the requirements?
The main requirements are:
- The Applicant will be required to comply with the conditions for listing set out in the JSE’s rules.
- The scheme’s MOI must indicate relevant ownership and trading restrictions, which may relate to BEE or additional empowerment-related restrictions. The JSE evaluates whether the restrictions meet the Empowerment Segment requirements, which include inter alia that they must be properly regulated and enforced and must accord with the objectives of the Financial Markets Act (the “FMA”, Act No. 19 of 2012).
- A company does not have to be listed on an exchange (including the JSE) in order to list a share scheme on the JSE’s Empowerment Segment.
How to access Empowerment Segment listings?