We first had line sight of these proposed amendments in the JSE’s Consultation Paper in respect of the Cutting Red Tape Project published in March 2021. In this consultation paper, the JSE proposed the removal of the obligation on issuers to produce an abridged report in respect of their annual financial statements and publish the report on SENS simultaneously with the publication of their annual financial statements, in accordance with Paragraph 3.21(b) of the JSE Listings Requirements.

The JSE’s Financial Reporting Disclosures Explanatory Memorandum dated 14 February 2023 further expanded on the nature of the proposed amendments, and the accompanying amendment schedule set out the amendments to be made. In the explanatory memorandum, the JSE noted that the requirement to produce an abridged report, as per section 3.21(b) of the JSE Listings Requirements, adds no regulatory benefit, but instead adds additional management time for issuers to prepare their full suite of financial results and also increases costs, not only in terms of internal resources, but external costs in terms of typesetting and auditors (in cases where the issuer decides to get its auditors to review those results).

In terms of the explanatory memorandum, the main features of the amendments aim to achieve the following:

• the simplification of the provisions in general;
• the removal of the previous obligation to always prepare an abridged report (which report follows the IFRS format applied to interim results, being IAS 34);
• limiting the need to prepare an IAS 34 format set of results only if the detailed audited annual financial statements are not available for public consumption electronically; and
• removal of the previous obligation to obtain an auditor’s opinion on interim results published where the previous set of annual results were accompanied by a modified opinion (according to the JSE, reviews rarely led to any change to the auditor’s position and provided no further information or comfort to investors).

The amendment schedule breaks the amendments down into five blocks, namely:

Block 1: The scope and nature of the financial results to be announced by issuers.

Block 2: The content of the results announcement.

Block 3: Minimum contents of interim results, condensed financial statements and summary financial statements.

Block 4: Minimum contents of annual financial statements, which includes annual reports.

Block 5: Practice notes and guidance letters.

The nature of the amendments is extensive, with the introduction of several new definitions and provisions. These can be found on the JSE’s website and issuers, sponsors and advisors alike are encouraged to consider and absorb these new requirements, which will come into effect on 17 July 2023.

The objective of the JSE’s Cutting Red Tape Project is to reduce the red tape to facilitate a more enabling regulatory environment. When they were first proposed, the financial disclosure amendments appeared to be well received by market participants and commentators, as suggested by the feedback the JSE received during its consultation processes.

At a time when more issuers are opting to delist from the JSE, it will be interesting to see whether these “cutting red tape” initiatives will entice new listings and persuade current issuers to remain listed on the JSE.