Companies listed on the Botswana Stock Exchange’s (BSE) main board have a 12-month grace period to comply with a new rule requiring that a minimum of 30% of their shares be held by the public.
Known as free float, current listing rules require companies on the BSE’s main board to have 20% of their shares held by the public. The new rules, part of a range of changes for equity listings, were initially due to come into effect on January 1, 2019.
Information gathered by BusinessWeek indicates that ahead of the January 2019 deadline, none of the affected listed companies had raised their free float levels to abide by the new requirement.
One of the affected companies, Furnmart, instead has opted to delist and go back into private hands. Last week, the furniture group’s shareholders voted in favour of delisting and a share buyback is currently underway.
BSEL CEO, Thapelo Tsheole told BusinessWeek all listed companies have until December 2019 to meet the requirement.
“It has been previously announced that on implementation of the new rules on January 1, 2019, listed companies shall be given until December 31, 2019 to meet this requirement. The current requirement for free float is 20% and all listed companies meet it,”
According to Tsheole, companies have been alerted of this requirement well in advance and thus have been working on compliance with their stakeholders.
“The BSE can only sensitise the relevant parties, but only they can work with their stakeholders to ensure compliance,” he said.
Tsheole said the BSEL Board would make a decision on the companies that fail to meet the December 2019 deadline as it does in other instances of non-compliance with the requirements.
Other new listing rules kick off in January, including a sterner disciplinary regime, which will penalise errant companies by moving them to a default board where daily fines of P500 will be levied.
The new rules were approved by the Non-Bank Financial Institutions Regulatory Authority, following a four-year consultative process that involved an extended feedback period with affected market players. The rule covers all BSE equity platforms, which include the flagship Domestic Companies Board, Venture Capital Board and the Foreign Companies Board.