22 February 2018 by Cliffe Dekker Hofmeyr

Review of provisions of act that refer to the JSE

There are a number of provisions in the Act that refer to the Johannesburg Stock Exchange (JSE) or JSE Limited Listing Requirements (Listings Requirements).  

For example:

  • the definition of “company” in s1 of the Act includes, inter alia, a portfolio of a collective investment scheme in property that qualifies as a REIT as defined in paragraph 13.1(x) of the Listings Requirements;
  • a dividend is defined to exclude the acquisition by the company of its own shares by way of general repurchase as contemplated in paragraph 5.67B of s5 of the Listings Requirements; 
  • an “identical share” includes any other share that is substituted for that listed share in terms of an arrangement that is announced and released as a corporate action as contemplated in the Listings Requirements; and 
  • most importantly, a “REIT” as defined in the Act refers to a company which is a South African tax resident and whose shares are listed on an exchange as shares in a REIT, as defined in terms of the Listings Requirements.

Over the last couple of years, additional stock exchanges (such as ZAR X, 4Africa Exchange and A2X Markets) have been introduced into South Africa. As a result, there have been numerous lobbying efforts to National Treasury to make the requisite amendments to the Act in order to incorporate these new stock exchanges. 

It seems that National Treasury has finally heeded this call as the Budget proposes the review of the relevant provisions of the Act to include the newly introduced stock exchanges, subject to certain regulatory and transparency criteria.  

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