What is an Empowerment Segment Listing?

Many South African companies demonstrate their commitment to transformation by implementing black economic empowerment (BEE) share ownership schemes. These schemes allow previously disadvantaged South Africans to own a stake in these companies and participate in their growth.

The JSE launched the Empowerment Segment in 2015 to cater for companies that have or seek  to create BEE share schemes. These listings qualify for a discount on JSE annual listing fees.

The Empowerment Segment allows for the listing and trading of BEE share schemes within a regulated and  controlled environment.. An Issuer Agent is appointed  to conduct verification process on each shareholder and maintains the share register’s integrity. The Financial Services Conduct Authority (FSCA) requires that shares be traded on a licensed exchange to protect investors.

Who is it for?

  • Empowerment Segment listings are appropriate for companies wishing to implement BEE share schemes or another restricted share scheme with empowerment as a primary objective.
  • Investors may buy and sell Empowerment Segment shares if both parties comply with the relevant share restrictions. These restrictions are detailed in each scheme’s memorandum of incorporation (MOI).
  • Companies do not have to be listed on the JSE (or any other exchange) to list qualifying share schemes on the JSE’s Empowerment Segment.>

What are the requirements?

The main requirements are:

  • The applicant must comply with the conditions for listing set out in the JSE’s rules.
  • The scheme’s MOI must indicate relevant ownership and trading restrictions related to BEE or additional empowerment-related restrictions.
  • The JSE evaluates whether the restrictions meet the Empowerment Segment requirements, which include, amongst other requirements, that they are properly regulated and align with the objectives of the Financial Markets Act (the FMA, Act No. 19 of 2012).
  • A company does not have to be listed on an exchange, including the JSE, to list a share scheme on the JSE’s Empowerment Segment.