The Johannesburg Stock Exchange (JSE) has announced the seventh phase of the JSE Simplification Project, which aims to shuffle and simplify the existing Sections of the JSE Requirements (Requirements).
Pursuant to public consultation, the JSE now proposes an entirely rewritten Section 8 on Financial Information. This write-up focuses on the key changes rather than the simplifications, as set out below:
- The JSE proposes removing the onerous requirement to prepare historical financial information for a Category 1 subject and/ or a substantial acquisition/ disposal of Category 1 ‘in accordance with the accounting policies of the issuer’. Instead, it is proposed that the historical financial information be presented as is and that the necessary adjustments to align the accounting policies of the subject be made in the pro forma
- It is proposed that Category 1 transactions and substantial acquisitions of a Category 1 subject/ new applicant should be required to present two years of historical financial information rather than the currently applicable three years.
- The JSE proposes only referring to the publication of headline and diluted headline earnings per share and removing other measures as a minimum requirement, so that additional measures should only be published in circumstances where actually required in respect of an issuer.
- The JSE proposes removing the distinction between general and specific forecasts (and to refer to profit forecasts generally instead) and combining the applicable requirements. The requirements for profit forecasts and estimates for an announcement, circular or pre-listing statement are proposed to be the same.
- It is proposed that special property forecasts be removed from Section 13 of the Requirements, and therefore from Section 8 as well.
- Paragraph 8.51, setting out what an audit report should include, is proposed for removal, as the content for such reports should follow the requirements already set out by the International Auditing and Assurance Standards Board (IAASB) and the Independent Regulatory Board for Auditors (IRBA).
- It is proposed that the requirement for an individual auditor/ RAS to have experience in signing JSE reports be removed. The concept of a RAS is to be completely removed. The responsibility to ensure the auditor who is appointed has the necessary knowledge and experience and/ or has attended the relevant training, should be placed on the issuer rather than a RAS.
- Paragraphs addressing the following are proposed to move to Section 5 (Continuing Obligations):
- the appointment of an auditor by an applicant issuer and notifications in respect of the appointed auditor; and
- disclosure obligations in relation to results, including annual results, interim and quarterly reports and the auditor’s report.
