The Johannesburg Stock Exchange has introduced sweeping changes to its listing requirements that could make it significantly easier for technology startups and other high-growth companies to go public in South Africa.
The updated regulations, which came into effect in December 2025, include provisions for special purpose acquisition companies (SPACs), weighted voting structures, and streamlined requirements for development-stage companies — tools that have become standard on major exchanges globally but were previously unavailable on the JSE.
What’s changed
The most significant changes centre on three key areas that have traditionally made IPOs challenging for emerging tech companies.
First, the JSE now permits weighted voting share structures for main board listings, allowing founders to maintain control even as they raise capital from public markets. Each weighted voting share can carry up to 20 votes, though these enhanced rights automatically convert to ordinary shares after 10 years or upon transfer. This addresses one of the fundamental tensions in tech companies going public. Founders can now access public capital without immediately ceding control to institutional investors.”
Second, the exchange has formalised a SPAC framework, allowing these vehicles to raise capital and list before identifying acquisition targets. SPACs must complete an acquisition within 36 months and hold all raised capital in escrow, with shareholders receiving redemption rights if they vote against a proposed deal.
Third, development-stage companies — those not yet profitable but with substantial net asset value — can now list on the main board with just 12 months of audited financial statements, down from the standard three years, provided they meet a R500m ($27m+) net asset value threshold.
The compliance burden
Despite these reforms, the JSE’s requirements remain notably more prescriptive than comparable exchanges. The listing rules document runs to more than 170 pages, with detailed provisions covering everything from corporate governance to financial reporting.
All new listings must appoint a sponsor — typically an investment bank or corporate finance firm — who bears ongoing responsibility for ensuring compliance. Sponsors face fines of up to R1m and potential removal from the JSE’s approved register for breaches. The sponsor regime creates a professional intermediary layer that doesn’t exist in quite the same way in other markets. It adds cost and complexity, but also provides investors with additional assurance.
The requirements for ongoing disclosure are similarly comprehensive. Companies must announce any “price sensitive information” immediately, with detailed guidance on what constitutes material information. Trading statements are required when results are expected to differ by more than 20% from previous periods.
The SPAC question
The introduction of SPACs has generated particular interest, given their popularity in the US during 2020–2021, though the vehicle has since fallen out of favour amid regulatory scrutiny and poor post-merger performance.
The JSE’s SPAC rules include several investor protections. Directors must collectively hold at least 5% of shares at listing, with these holdings restricted from sale for six months post-acquisition. All capital must be held in escrow and invested only in investment-grade bonds or bank deposits. Shareholders who vote against an acquisition receive redemption rights at the initial listing price, adjusted for expenses and interest.
The framework is conservative compared to the US model. That’s possibly appropriate given how SPACs have performed globally, but it remains to be seen whether there’s actually demand for this structure in the South African market.
No SPACs have listed under the new rules yet, and several market participants questioned whether the vehicle would gain traction given South Africa’s relatively limited pool of institutional capital and the alternative of simply listing the target company directly.
The weighted voting debate
The weighted voting provisions have sparked debate about corporate governance standards. Critics argue that dual-class structures entrench management and reduce accountability to minority shareholders.
The JSE has attempted to address these concerns through several mechanisms. Certain matters — including variation of share rights, appointment of auditors and independent directors, and removal of listing — must be voted on through an “enhanced voting process” where weighted shares carry only one vote each.
Additionally, holders of at least 10% of ordinary shares can convene general meetings, and the weighted voting rights automatically sunset after 10 years unless ordinary shareholders vote to extend them (with weighted share holders excluded from this vote).
The governance safeguards are more robust than some other markets. But it still represents a fundamental shift in how we think about shareholder democracy in South Africa.
Development stage companies
The relaxed requirements for development-stage companies could prove particularly relevant for biotechnology, renewable energy, and other capital-intensive sectors where companies may have substantial assets but limited revenue.
These companies can list with just one year of audited accounts, provided they have a net asset value of at least R500m ($27m+). However, they must still meet the standard free float requirements — 10% of shares held by at least 100 public shareholders.
“The R500m threshold is substantial,” a Cape Town based founder, tells Launch Base Africa, in an email. “It’s not going to help early-stage startups, but it could be relevant for scale-ups that have raised significant capital and want to access public markets earlier than would previously have been possible.”
The broader context
The reforms come as African stock exchanges face increasing competition for listings from international venues. Several prominent South African technology companies have chosen to list in the US or Europe rather than domestically, attracted by deeper pools of capital and higher valuations.
The JSE has also introduced market segmentation, creating a “general segment” for main board companies not included in the FTSE/JSE All Share Index. These companies face reduced disclosure requirements, including exemption from quarterly reporting and a higher threshold for category 1 transactions (50% versus 30%).
For alternative exchange (AltX) listings targeting smaller companies, the requirements remain more flexible, with just one year of audited accounts required and category 1 transaction thresholds set at 50%.
Practical implications
For startups considering a JSE listing, several practical points emerge from the new requirements.
Pre-listing costs remain substantial. Companies must prepare comprehensive listing particulars — effectively a prospectus — engage auditors for multi-year financial statements, appoint sponsors, and ensure corporate governance structures meet JSE standards, including board composition requirements and committee structures.
The ongoing compliance burden is also significant. Companies must publish annual and interim results within specified timeframes, announce all price-sensitive information immediately, and comply with detailed rules around corporate actions, related party transactions, and changes to share capital.
“The all-in cost of going public on the JSE probably starts around R5m-R10m for a straightforward listing,” the founder adds. “And that’s before you factor in the ongoing costs of maintaining a listing, which can easily run to several million rand annually.”
What hasn’t changed
Notably, the reforms don’t address several barriers that have historically made JSE listings challenging for technology companies.
The exchange still requires relatively high levels of free float (10% held by at least 100 shareholders for main board) and minimum market capitalisations that may be prohibitive for earlier-stage companies. The main board requires either R15m in pre-tax profit and R50m net asset value, or R500m net asset value for companies without a profit history.
The working capital requirements are also demanding. Directors must confirm that working capital is sufficient for at least 12 months, and the JSE requires detailed working capital forecasts, sensitivity analyses, and, in some cases, verification by auditors.
Financial reporting standards remain rigorous, with quarterly trading statements required when results are expected to differ materially from forecasts, and immediate announcement of any price-sensitive information.
The international comparison
Compared to European exchanges, the JSE’s requirements remain more prescriptive in some areas while being more flexible in others.
The sponsor regime has no direct equivalent in most European markets, where companies typically work with nominated advisers or corporate brokers but without the same ongoing compliance responsibilities. However, the JSE’s market segmentation now offers flexibility closer to the distinction between main and growth markets in Europe.
The weighted voting provisions are more restrictive than US exchanges, where companies like Facebook and Google have listed with founders holding super-voting shares with no sunset provisions. But they’re more permissive than many European markets, where dual-class structures face significant regulatory and institutional resistance.
Looking ahead
Whether these reforms will materially increase technology IPOs on the JSE remains uncertain. Much will depend on factors beyond the exchange’s control, including macroeconomic conditions, investor appetite for growth companies, and the relative attractiveness of international listing venues.
The changes are welcome and remove some genuine barriers. But the fundamental question is whether there’s sufficient domestic institutional capital to support technology valuations at levels that make public markets attractive compared to private funding or international listings.
The proof will come in the next 12–24 months, as the first companies test the new framework and investors signal their appetite for development-stage companies, SPACs, and weighted voting structures in the South African market.
For now, the JSE has brought its listing regime closer to international standards. Whether that’s enough to stem the flow of companies choosing to list elsewhere remains to be seen.