Aspects of the Cross-listing of Securities

• Jurisdiction: South Africa
• Citation: (2009) 21 SA Merc LJ 631
• Pages: 631-644
• Date: 25 May 2019
• Author: Kathleen van der Linde
• Published date: 25 May 2019

Aspects of the Cross-listing of Securities*

KATHLEEN VAN DER LINDE**

University of Johannesburg

STEPHANIE LUIZ***

University of Kwa-Zulu Natal

1 Introduction

The nature of securities and of securities transactions facilitates the f‌low of

capital across borders and the development of an increasingly globalised

securities market. Securities represent bundles of rights against a company

and are thus intangible.

1

The dematerialisation of securities not only

eliminates paper-based evidence of the rights embodied in the securities but

also results in the involvement of intermediaries who for practical reasons

may hold securities as nominees on behalf of benef‌icial holders.

2

Electronic

share transactions on regulated markets

3

as well as alternative Internet-based

trading platforms add impetus to the integration of capital markets.

4

In a globalised securities market it is to be expected that companies might

list on more than one exchange in order to gain access to a ready market for

their securities in another jurisdiction. A company could seek a primary listing

on one exchange and secondary listings on one or more other exchanges, or

might even seek a primary listing on two exchanges. This concept is known as

cross-listing

5

or dual listing.

6

As the term ‘dual listing’ is also sometimes

reserved for the situation where independent companies combine their

business operations but maintain their separate listings on different exchanges,

* The authors would like to express their appreciation to Professor Johan Brink for his valuable

suggestions and insightful comments on an earlier version of this article. All errors remain the authors’.

** BIuris LLB Hons BA (PU) LLM LLD (Unisa). Professor of Mercantile Law, University of

Johannesburg.

*** BA LLB (Natal) LLM (Cantab) HDip Co Law (Witwatersrand) LLD (Unisa). Professor, Law

Faculty, University of Kwa-Zulu Natal.

1

See Philip R Wood Conflict of Laws and International Finance (2007) at 5. For the SouthAfrican

position, see s 91 of the Companies Act 61 of 1973 and s35 of the Companies Act 71 of 2008.

2

Wood op cit note 1 at 6.

3

See s 91A of the CompaniesAct 1973 and s 53 of the Companies Act 2008 that generally provide a

transferee with f‌inal and irrevocable title in respect of uncertif‌icated shares once the relevant accounts

have been debited and credited.

4

See Thomas Hoeren ‘Electronic Commerce and the Law – Some Fragmentary Thoughts on the

Future of Internet Regulation from a German Perspective’ in: Jürgen Basedow & Toshiyuki Kono (eds)

Legal Aspects of Globalization: Conflict of Laws, Internet, Capital Markets and Insolvency in a Global

Economy (2000) 35 at 36-42; see also Harald Baum ‘Globalizing Capital Markets and Possible

Regulatory Responses’ in: Jürgen Basedow & Toshiyuki Kono (eds) Legal Aspects of Globalization:

Conflict of Laws, Internet, Capital Markets and Insolvency in a Global Economy (2000) 77 at 84.

5

Especially articles written in American law journals. A listing on another exchange could be a

listing on an overseas exchange or a regional exchange.

6

The JSE Limited Listings Requirements use the term ‘dual listing’, which they def‌ine as ‘[a]

primary or secondary listing on the JSE in addition to a listing on another exchange’ (see the def‌inition

of ‘Dual Listing’ inserted with effectfrom 25 November 2008).

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(2009) 21 SA Merc LJ 631

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