1. Accredited exchanges
Companies listed on one of four accredited exchanges for at least 18 months can apply for a secondary listing on the Johannesburg Stock Exchange (JSE) Main Board or Alternative Exchange (AltX). The accredited exchanges are the Australian Stock Exchange, London Stock Exchange (LSE and AIM), New York Stock Exchange (NYSE and NYSE Euronext), and Toronto Stock Exchange (TSX and TSXV).
2. Fast process
The fast-track listing process significantly reduces the time and costs otherwise associated with obtaining a secondary listing on the JSE. The secondary listing process on the JSE is now faster than that of any other exchange in Africa. The entire process (from first engagement with the JSE to listing) can take three weeks.
A company with a listing on the main board of a foreign exchange may apply for a secondary listing on the JSE’s Main Board. A company with a listing on a junior board of a foreign exchange may only apply for a secondary listing on the JSE’s AltX.
Applicants must appoint and maintain a sponsor in South Africa to interface with the JSE.
5. Pre-listing announcement
Applicants do not need to produce a pre-listing statement, but a pre-listing announcement is required. The pre-listing announcement must contain a reduced list of prescribed information, including website details where information from the company’s latest audited financial statements, competent persons’ reports and valuation reports can be accessed.
6. Listing criteria
Applicants must comply with the normal Main Board or AltX listing criteria which include meeting the required spread of public shareholding on its South African share register. If the required spread cannot be met, arrangements may be made with the JSE to ensure that sufficient scrip is available on the South African share register so that there is an acceptable level of liquidity.
7. Capital raise
A company may obtain a fast-track secondary listing with or without a capital raise. For a secondary listing with a capital raise, the company must consult with the JSE regarding the process, and may have to register as an external company in South Africa.
8. Public offer or private placement
Companies raising capital in South Africa by way of an offer to the public, must have a prospectus, if it is an initial public offering or, if not, a written statement. These requirements would mean that much of the benefit of a fast-track secondary listing is lost. A private placement does not constitute an offer to the public and therefore is ideally suited to the fast-track process.
9. Taxation and exchange control
Companies looking to raise capital in South Africa will be subject to South African tax laws, and exchange control regulations to permit the outflow of funds from South Africa.
10. First listing
In December 2014, AIM-listed Sirius Real Estate Limited was the first company to obtain a secondary listing on the JSE through the fast-track process. Norton Rose Fulbright’s London and Johannesburg offices acted as the legal advisors to Sirius.