Most Read Contributor in South Africa, September 2016
On 5 July 2016, the Registrar of Securities Services posted
draft amendments to the JSE Debt Listings Requirements (the
"DLRs") on the Financial Services
Board's website. The proposed amendments are open for public
comment until 15 July 2016.
The draft amendments include a number of changes to various
sections of the DLRs that, if adopted, will have an impact on the
issuers (specifically special purpose
vehicle issuers of asset-backed debt securities
("ABSs") and issuers of credit-linked
guarantors (including guarantors of
the obligations underlying ABSs)
issuers and guarantors'
Included in the proposed amendments are provisions that:
make it clear that issuers will
require the approval of "holders of debt securities holding
not less than 66.67% ... of the value of a specific class of
notes or all outstanding notes for changes to the terms and
conditions of the debt securities" (our emphasis). This may
mean (depending on the quorum requirements for noteholder meetings)
that the standard provisions in most issuers' programmes that
permit amendments to the terms and conditions with the approval of
an "extraordinary resolution adopted at a properly-quorated
noteholder meeting" may no longer comply with the DLRs.
impose more onerous disclosure
requirements on issuers of ABSs. Issuers of ABSs will now be
required to –
ensure that the financial information
of any underlying obligor whose obligations make up 10% or more of
the value of the underlying obligations is made publicly available
(on a website), unless the underlying obligations are guaranteed
under an irrevocable, unconditional on-demand guarantee, in which
case the guarantor's financial information may be made publicly
available instead. The above disclosure requirements will also be
imposed in respect of the obligors of reference obligations (or if
no reference obligations are specified, the reference entities) in
respect of credit- linked notes;
make periodic reports on the
underlying pool of assets within set time frames (previously this
was open-ended); and
make use of a new reporting template
with certain minimum disclosures.
require (i) issuers to prepare and
publish both annual financial statements and interim financial
statements; and (ii) guarantors, if required by the JSE, to also
prepare and publish annual financial statements and interim
require issuers to submit their
audited financial statements to the JSE within four, rather than
six, months of the issuers' financial year-end.
Given the potential impact on various
role players in the debt capital markets, the amendments will need
to be carefully reviewed to determine their full impact.
In the milieu of global financial markets, securities of various types are often classified as either ‘listed’, ‘unlisted’ or ‘quoted’.
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