In depth notes. Includes:The role of the JSE, Internal control of the JSE, Prerequisites for listing, Advantages of listing a company, Membership of the JSE , Stockbrokers on the JSE, Obligations of buyers and sellers.
THE ROLE OF THE JSE I
Initially founded to attract finance for mining sector
TWO MAIN FUNCTIONS : PRIMARY } SECONDARY MARKET ( to attract new capital )
I
i
PRIMARY MARKET SECONDARY MARKET REQUIREMENTS FOR ACTIVE SECOND MARKET :
Difference new capital created
Trading of existing .
Information on companies must be
capital quickly and freely available
Instruments listing stocks 2 Information
Rights Issue ,
new
Existing and . on markets must be
quickly
traded
(IPO ) , debentures , bonds bonds debentures and freely available .
price Issuer supply and demand 3 .
Large number of potential buyers and
determination
sellers for each share
4. LOW transaction costs .
CONTROL OVER THE JSE:
JSE
÷::::::"
"" "
Board of directors The Financial Markets Act ( 2012 )
Chief Executive Officer operating license :
Min 2 executive directors Minister of Finance ( financial sector conduct
Min 6 non -
executive directors Authority FSCA ; previously known as the
Financial services Board FSB )
[ send license application to minister each year ]
Rules and regulations of JSE
, mmmmMmmmmMmmmm
{INTERNAL ]
CONTROL OF THE JSE )
Clrwwwwwwwwwwuvrwurrw]
Board of Directors
Executive directors Non -
executive directors
( Chief executive Officer ; CEO ) (chairperson )
LISTING OF SHARES
◦
company must
apply for listing at JSE
> prerequisites
◦
Company must appoint a sponsoring broker
1 link between
company and JSE
◦
Application presented to listing committee
•
Listing committee makes recommendation to Board Of Directors of JSE
◦
Board makes final decision
MOST IMPORTANT PREREQUISITES FOR LISTING
Any listed company must make provision for :
1 Shares must be freely transferable
1 Minimum 4 directors
I 13 Of directors retire on annual basis
>
Amount directors may borrow limited
>
Audited financial statements presented to shareholders 21 days before AGM
>
Audited financial statements available within 6 months from end of financial period
1
Preliminary statements within 3 months
1 Interim results 3 months after half
within
year
listing
>
Publish pre statement
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