The amended JSE debt listings requirements come into operation on 22 December 2014. They aim to bring the JSE debt listings requirements in line with the Financial Markets Act, 2012 that came into force in 2013.
The authority of the JSE, including its general powers over listing debt securities such as bonds and commercial paper, remain largely in place. But there are a number of developments to the listings requirements including those concerning the appointment and termination of a debt sponsor.
A debt sponsor (often a bank) guides and advises an issuer of debt securities which seeks a listing of the securities on the JSE. The new requirements are much clearer on the duration of a debt sponsor’s appointment and the requirements for any resignation or termination of appointment. The amended requirements explicitly demand that a debt sponsor be appointed for the duration of the period that an issuer’s debt securities are listed on the JSE. If a debt sponsor resigns, both the issuer and the resigning debt sponsor must each provide written reasons for the resignation to the JSE and to the prospective new debt sponsor.
Termination of a debt sponsor’s appointment requires issuer board approval. Again, reasons for the termination must be provided to the JSE by both the issuer and the existing debt sponsor. A replacement debt sponsor must request a copy of the report and must take account of the reasons for termination prior to accepting the new appointment.
Any decision to change debt sponsors must be accompanied by appropriate reasons or the issuer and existing debt sponsor may face disciplinary action.