Series 1 : Article 3

JSE Aiming at Cutting the Red Tape

Revised Listing Particulars & Reverse Take-Overs 

JSE targets effective and appropriate levels of regulation

Today’s article “Revised Listing Particulars & Reverse Take-Overs” continues the Merchantec Capital Sponsor Team’s Series “JSE Aiming at Cutting Red Tape”. As mentioned in our previous articles, the JSE is – as set out in its Consultation Paper published in March – looking to make the application of the Listings Requirements easier. The objective: to do away with “red tape” to facilitate a more flexible and fit for purpose application whilst supporting an environment to allow JSE listed companies to focus on their business and operations.  

With the key focus of the Consultation Paper being “effective and appropriate level of regulation”, the JSE is proposing amendments around, inter alia:

Revised Listing Particulars & Reverse Take-Overs 

Before we consider the proposed amendments, let’s look at the Current Listings Requirements’ provisions

Transactions, principally acquisitions and disposals by JSE listed companies and their subsidiaries, are governed by the provisions of Section 9 of the Listings Requirements.
These provisions describe how transactions are to be categorised and set out the requirements pertaining to announcements, circulars and shareholder approvals. Currently, in the case of an acquisition where:
– the percentage ratio in relation to the categorisation is ≥100%; or 
– there is a fundamental change in business; or
– there is a change in board or voting control (≥35%)
such acquisition will be categorised as a reverse take-over and the Issuer will be required, in addition to a circular, to prepare revised listing particulars 

What has been proposed?

The JSE has proposed the removal of the obligation to prepare revised listing particulars in the event of an acquisition where, whilst the categorisation percentage ratio is ≥100%, there is no fundamental change in the business, or to the board or voting control of the Issuer (≥35%). 


Issuers will be required to discuss an acquisition with the JSE at an early stage in order for the JSE to ascertain whether there is a resultant fundamental change in the business, or to the board or voting control of the Issuer. The Issuer’s board will not be able to make the assessment at its discretion as to whether revised listing particulars will be required

What is the JSE’s rationale for the proposed amendments?

As the acquisition will be a Category 1 transaction, shareholder approval is required. Accordingly, where clear synergies exist between the acquisition and the Issuer’s business, in the absence of any fundamental change in the business, or to the board or voting control of the Issuer, the requirement for revised listing particulars appears unduly burdensome.  

Would the proposals be beneficial to your company?



The Merchantec Capital Sponsor Team is going to keep unpacking the proposals contained in the Consultation Paper over the course of the next few weeks…

We hope that you will enjoy this series, and look forward to receiving your feedback.