On 30 June 2017, after an initial round of public commentary undertaken by the JSE Limited ("JSE") on the proposed amendments to the JSE Debt Listings Requirements ("DLRs"), the South African Registrar of Securities Services announced that "Part 2" of the 2016 amendments are available on the Financial Services Board's website for further public comment. The deadline to review and comment on the proposals is 14 July 2017.
On 17 January 2017, we reported on the JSE's release of a new set of proposed DLRs. Given their significance and scope, we encourage all market participants to carefully consider the proposed changes.
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. These include:
- increased disclosure;
- complete overhaul of the document change process (for example, changes to security documents and credit enhancement agreements will now also require prior JSE and noteholder approval unless such changes are of a "technical nature, made to correct a manifest error or to comply with the mandatory provisions of any applicable laws";
- separate disclosure requirements for securitisations and "other asset-backed debt securities";
- adding to the list of documents that must be published on the JSE website (for example, security structure documents and credit enhancement agreements);
- expanding the types of information that may be incorporated by reference;
- streamlining the listings process (for example, applicant issuers may now elect to appoint a debt sponsor or an internal "designated person" to liaise with the JSE);
- making inward listings by foreign issuers simpler (for example, 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);
- the approvals process relating to changes to documentation;
- 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.
These changes are likely to increase the costs of listing programmes and notes, and the time involved, until market participants and the JSE have fully changed and implemented the significant changes.
We will track the progress of the proposed amendments and post analyses and news of developments.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.