How the JSE plans to tighten the screws on disclosure
The JSE is crafting tighter disclosure rules for companies with listed debt instruments, combined with a greater focus on corporate governance to increase transparency.
State-owned companies, which are some of the biggest debt issuers, are overhauling their corporate governance after some were caught up in a recent influence-peddling scandal that rocked business and politics in Africa’s biggest economy.
"Commentators are often critical why exchanges don’t catch or stop a fraud etc ... what they [regulators] do is they require disclosures so people are informed before they make a decision to invest," said JSE CE Nicky Newton-King.
"That’s why we are looking at disclosures for nonlisted companies with debt securities as a means for investors, the media and interested shareholders to ask difficult questions."
Andre Visser, head of regulation at the JSE, said the new regulations, which were expected to be finalised by the end of 2018 would have a strong focus on corporate governance.
"You will see a lot more disclosures coming up from companies with debt instruments," he said.
State-owned South African state-owned companies, such as power utility Eskom and trains operator Transnet are among the country’s biggest issuers of debt.
The JSE is among the top capital market in the world with more than 160 companies listed on the main JSE all-share index. It has a market capitalisation of R11.7-trillion.
Newton-King said that the bourse has been cutting transaction prices in a bid to compete with the London Stock Exchange and the Australian Stock Exchange abroad and with newer entrants at home such as ZAR X and Equity Express Securities Exchange.
The JSE had cut prices by at least 20% and expected more in equity-market transactions in coming months.
"The competitive landscape, the sweet spot in which a competitor can get to us is much smaller than it was three years ago," said Newton-King.
"We are a different shop today, far more client focused, making strides in pricing far faster than we used to," she said.