What do the JSE listing requirements say about the King Code? Is the King Code part of the requirements? Do listed companies have to comply with the King Code principles? Have the JSE listing requirements changed since the last King Code was published, or are they still the same?

The JSE listing requirements and the King Code

Listed companies must apply all the King Code principles, and only the King Code practices that the JSE has made mandatory.

You must apply the principles

The JSE amended the JSE listing requirements in May 2017 after the Institute of Directors in Southern Africa (IoDSA) released the final version of King IV™. Under the amendments, listed companies do not have the choice that non-listed companies have – the choice to apply only some of the King Code principles and explain the ones they have not applied. Listed companies must apply all the latest King Code principles, including IT Governance (sometimes called IT Governance, Risk and Compliance).

You must apply some practices

The amendments do not require listed companies to apply all King Code recommended practices (only the principles). There are, however, a few practices that the listing requirements specifically require listed companies to apply. For example, you must appoint a:

  1. company secretary,
  2. an audit committee,
  3. a social and ethics committee, and
  4. a remuneration committee.

You can have one committee that serves all these purposes or one for each. For example, many companies have one audit and remuneration committee. You must check the amendments to get the full list of practices you must apply.

You must explain or disclose your application

This includes not only applying the King Code principles but also explaining which practices the listed company applied in respect of those principles. Listed companies must also explain how they comply with the King Code principles and recommended practices.

What happens if you don’t?

The JSE can suspend a listed company’s listing if they do not apply all the King Code’s principles and explain how it applied them.

Where can I get the JSE listing requirements for King Code?

The JSE has published the latest consolidated version, which incorporates the May 2017 amendments.  The previous version of the JSE Listing Requirements is available on their website.

When did the 2017 amendments take effect?

The amendments take effect in the following way:

  • Already-listed companies (those that listed before 19 June 2017) must, from 1 October 2017 onwards, apply the practices specifically required by the amendments and disclose their application.
  • Newly-listed companies (companies that listed on or after 19 June 2017) must, from 19 June 2017 onwards, apply the practices that the amendments specifically require and disclose their application.
  • If listed companies want to apply (voluntarily) other King Code-recommended practices, they must apply them during the financial years that start after the King IV effective date (1 April 2017) and disclose their application at the end of those financial years.

The impact of the JSE amendments on the King IV effective date is that you will have to apply and disclose your application of certain specified practices even before the time King IV actually says you must do so (the end of your financial year). For example, King IV currently applies only to listed companies whose financial years started after 1 April 2017, meaning that if your financial year started before that date, King IV does not apply to you. But now the JSE amendments disregard some of that and say that you have to apply whatever practices it specifically requires from you on the date it requires you to do so.

Actions you can take

  • Make the right disclosures for King IV by asking us to assist you. We have developed clever ways to assist you in drafting accurate, customised disclosures for your organisation as painlessly as possible.
  • Transition from King IV to King V™ by getting our King IV to King V Comparison Tables and King Planning Tool.
  • Understand how the timeline of the effective dates for King V and the latest JSE Listing Requirements affects your compliance by asking us to advise you.
  • Consider the differences between King IV and King V by reading our summary and getting the tables and tools from us.
  • Align your IT policies with the King V™ principles by asking us to review or draft IT policies compliant with them.
  • Subscribe to our newsletter to stay up-to-date with the latest developments.

Interested?

If you are interested, please complete the form on the right or enquire now. We will contact you to find out more about your requirements and give you a quote.

The JSE Listing Requirements and the King Code

There was much confusion about whether listed companies had to comply with the King Code or whether they had the option not to apply it and explain why. Many thought out certain principles that are mandatory and must be complied with, while others are requirements. That is when the JSE published a guideline in its listing requirements to help clarify the situation. The JSE Listing requirements and the King Code set out certain principles that are mandatory and must be complied with, while others are not. None of the IT Governance principles is mandatory, but some affect IT Governance.

Read the King Code

You can also read the latest King Report and King Code on Corporate Governance, or our King Code IT GRC overview.

Note: The Institute of Directors in Southern Africa NPC (IoDSA) owns the copyright to all five of the King reports or codes on governance. They own various trademarks related to King V (including King V Code™, King V Report™, King V Report on Corporate Governance™, and King V Disclosure Framework™).  All of the IoDSA’s rights are reserved. All views are our own, and we are not associated with or endorsed by the IoDSA in any way.