Media giant, Naspers, is working towards establishing its own licensed share exchange to be used to facilitate the trading of broad-based black economic empowerment (B-BBEE) shares issued by companies within the Naspers group.
Titled, Yizani Phuthuma Nathi (YPN), this exchange will list the B-BBEE shares of Multichoice empowerment initiative Phuthuma Nathi and those of Media24 initiative Welkom Yizani. The plan is communicated in the latest Media24 financial results.
Naspers seems to favour this option as opposed to moving its B-BBEE shares to the empowerment segment of the JSE which has Vodacom’s Yebo Yethu, MTN Zakhele and Sasol Inzalo.
These B-BBEE shares currently listed on the Equity Express’ over the counter (OTC) share trading platform. The resolution for Naspers to establish its own share exchange platform comes after regulators issued an order for all companies that facilitate trading in their own shares in over the counter platforms to conform to the provisions of the Financial Markets Act of 2012.
The order came after the Financial Services Board (FSB) (now known as the Financial Sector Conduct Authority (FSCA) spotted a regulatory gap in the OTC share trading activity. OTCs were not regulated which exposed investors to substandard service and abuse like insider trading, market manipulation and false reporting.
As such the regulator issued a directive that all public companies that provide infrastructures conforming to the definition of an exchange where the issuer facilitates trade in its own securities must apply for an exchange license. The regulated has noted that the directive intends to regularise the affairs of all unlicensed exchanges. And it classified as an exchange any activity that maintains and provides an infrastructure:
- for bringing together buyers and sellers of securities,
- for matching bids and offers for securities of multiple buyers and sellers,
- and whereby a matched bid and offer for securities constitutes a transaction
This directive saw MTN Zakhele shares and others move to the JSE empowerment segment. Welkom Yizani and Phuthuma Nathi remained on the Equity Express platform presumably on a promise that the platform would gets its house in order.
The Media24 statement notes that Welkom Yizani has been engaging with the FSCA to comply with the directive. “As part of this process MultiChoice and Media24 are investigating various options, including the establishment of a company Yizani Phuthuma Nathi (YPN), which has applied for an exchange licence to facilitate the trading of broad-based black economic empowerment shares issued by companies within the Naspers group.”