JSE’s tweak to financial disclosure will cost print media R200m a year

Ann Crotty

The JSE has granted some relief to the country’s major financial daily papers with what it describes as a slight amendment to its original proposal that will require listed companies to publish abbreviated financial notices in a “widely circulated daily newspaper”.

But the bad news for the print media remains that with effect from January 1 next year the obligation to publish certain announcements in the press will be significantly reduced. The loss of income to the media from this captive market is estimated at around R200 million a year.

In a Stock Exchange News Service (Sens) announcement issued yesterday, the JSE confirmed that it had considered every comment it received during the consultation period, which ended on June 29.

“The JSE wishes to report that certain amendments were made to the introduction of short-form announcements as a result of the comments received. The amendments were made to clarify the situation and are not considered to be material in nature.”

The original proposal was that a short-form announcement relating to financial results or a corporate action would have to be published in a “daily newspaper”.

This has been amended to a “widely circulated daily newspaper taking into account the specific composition and demographics of the issuer’s stakeholders, in the reasonable opinion of the issuer”.

A spokesman for the JSE told Business Report yesterday that there were two types of announcements, those relating to corporate actions and those dealing with financial results.

With regard to corporate actions “of a certain size”, listed companies were currently obliged to release a detailed document through Sens and place the same information in a newspaper. With effect from January 1 next year, companies would not be required to place the full document in a newspaper but merely a short-form version of it.

The JSE spokesman said that the exchange did not dictate what should be in the short-form version dealing with a corporate action.

However, with regard to financial results, the JSE does stipulate what information should be contained in the short-form announcements that will be placed in the newspapers.

Companies will be required to state the increase or decrease in revenue or operating profit and headline earnings a share as well as earnings a share.

The short-form announcements will also be required to disclose the increase or decrease in dividend and the increase or decrease in net asset value.

Following the consultation period, the local stock exchange has amended the original proposal with the statement: “To the extent that any of the above indicators are not considered to be a true measure to reflect the performance of an issuer in the banking and property industries, the JSE may grant dispensation from the requirements to publish such information or agree to a relevant alternative indicator.”