On 15 December 2016, we published a communication following the release by the JSE Limited (the “JSE”) of a new set of proposed JSE Debt Listing Requirements (the “DLRs”). Given the significance and scope of the proposed changes and in light of the fact that many of you may have missed the release over the December period, we thought it prudent to again send this communication in advance of the 30 January 2017 deadline to comment on the proposals.
The proposed amendments are the most extensive released in a number of years, and in some instances include effective rewrites of sections of the DLRs that have been little changed for some time. There appears to be a definite emphasis on:
streamlining the listings process (it appears, for example, that applicant issuers may now elect to appoint a debt sponsor or an internal “designated person” to liaise with the JSE, and that the lengthy JSE checklist may no longer be required);
making inward listings by foreign issuers simpler (it appears that certain categories of foreign issuers will now only need to prepare a “JSE wrapper” to their offshore programmes); and
clarifying those sections of the DLRs that were previously not entirely clear.
If adopted in their current form, the proposed amendments may have an effect on:
- standard disclosures usually included in placing documents;
- the classification of instruments, particularly asset-backed instruments issued out of special purpose vehicles (“SPVs”);
- the requirements applicable to guarantors (including security SPV guarantors);
- issuers’ obligations under the DLRs where they are also listed on the Main Board of the JSE;
- the life (and possible automatic termination) of programmes registered with the JSE where there are no notes outstanding and issuers do not issue for certain periods of time;
- the role of debt sponsors (with the introduction of the concept of “designated persons”); and
- the requirements applicable to financial information and financial statements.
We are considering the possible impact of the revisions on existing and future programmes and note issuances. It is not possible to predict how the process will unfold going forward: should the JSE receive extensive comments, the proposed amendments may be turned two or three more times before being finalised. Although it is not possible to accurately predict when the new DLRs (with additional amendments) will come into effect, based on past experience, this is likely to happen within the next three to six months.
The changes are likely to impact on all role players in the market and parties are encouraged to review and comment on the proposals by 30 January 2017.
We will track the progress of the proposed amendments and post analyses and news of future developments.
The proposed amendments (marked up against the requirements currently in force), an accompanying explanatory memorandum and the JSE’s announcement are available under the heading “Announcements regarding Listings Requirements” on the “Issuer Regulation” page of the JSE’s website.