"All companies start small and we are committed to supporting the burgeoning SME sector of the South African economy," says Russell Loubser, chief executive of the JSE. The new market is differentiated from the Main Board at the JSE in many ways with separate listing requirements. Companies that list on AltX are considered to be the future large companies that would eventually migrate to the Main Board.
According to Dr Alistair Ruiters, Director-General of the dti, "We believe that the establishment of AltX will promote black economic empowerment and assist in creating sustainable employment. Small and medium enterprises play a significant role in our economy and we are wholeheartedly supportive of initiatives which will enhance this sector."
The new market, which has reduced listing fees, will be supported by the full range of JSE services. These include the trading of shares on the same system as the main board, market surveillance to eliminate irregularities and settlement of AltX securities through STRATE.
Companies will need to comply with new AltX listing requirements appropriate for small and medium companies. These requirements place great emphasis on the initial and ongoing disclosure of company information. There is also a focus on the enhancement of the skills of directors of AltX companies with a compulsory four-day directors induction programme which will be offered by the Wits Business School.
Companies require no profit history to list but a share capital of R2 million is required.
The new market is expected to open for trading in October 2003. Companies are currently being sought to join AltX to issue new shares, raise funds, widen their investor base and have their shares traded on a regulated market.
Noah Greenhill, manager of the new market clarified that AltX would be keen to target junior mining companies as well as black economic empowerment organisations. "We researched parallel exchanges internationally and have incorporated best practice into AltX. The most successful parallel market has been AIM in the UK which has admitted more than 850 companies since it opened 1995. Collectively, these companies have raised more than 10 billion US dollars whilst on AIM."
"We believe that the success of AltX will be based on a philosophy which emphasises relationship management, marketing and continuous education."
