Governance Readout March 2026

South Africa has reached an important regulatory milestone with its removal from the Financial Action Task Force (FATF) grey list in October 2025. The country was originally grey-listed in February 2023 due to identified shortcomings in its anti-money laundering and counter-terrorism financing (AML/CFT) framework. Since then, coordinated reforms across government, regulators, and financial institutions have addressed the required action items and strengthened the system's effectiveness.

While the removal reflects meaningful progress, regulators have emphasised that sustained focus is required. Maintaining robust supervisory practices, improving enforcement capability and ensuring transparency across ownership structures remain priority areas as South Africa prepares for its next FATF mutual evaluation expected to commence in the first half of 2026, with a final report in 2027.

For companies and financial institutions, the development underscores the ongoing importance of sound governance, accurate and timely beneficial ownership disclosure, and well-structured compliance programmes. Organisations should continue to assess the adequacy of their internal controls and ensure alignment with both local regulatory expectations and international best practice.

Regulatory spotlight: Beneficial ownership and the Strate Beneficial Interest Register (BIR)

South Africa’s governance and regulatory landscape continues to shift, with recent developments centred on enhancing transparency, strengthening reporting expectations and improving oversight across market infrastructure. These changes support the broader national objective of reinforcing governance standards, improving market integrity and maintaining alignment with global best practice.

Beneficial ownership: Strengthening transparency

Transparency around ownership structures remains a priority focus area for regulators. Recent updates to beneficial ownership requirements are designed to give authorities timely and reliable insight into the natural persons who ultimately own or control legal entities.

A beneficial owner is the individual who holds ultimate ownership or effective control, whether directly or indirectly, including through intermediaries or nominee arrangements. Enhanced disclosure obligations aim to improve visibility across complex ownership chains and support South Africa’s ongoing alignment with international transparency frameworks.

In South Africa, there are two layers of securities ownership information, namely the Securities Register, reflecting registered holders, and the BIR, intended to provide visibility of underlying beneficial interest holders.

The role of the Strate Beneficial Interest Register (BIR)

For listed issuers (affected companies) and capital market participants, the uncertificated securities register is maintained by Strate and comprises information on beneficial interest holders whose securities are held through regulated intermediaries such as brokers and custodians. The Beneficial Interest Register is a core component of this transparency framework. The BIR consolidates beneficial interest data in listed securities, enabling stakeholders to:

• Understand and monitor ownership patterns
• Manage concentration risk
• Respond more accurately to regulatory and compliance enquiries

These updates reinforce the growing importance of accurate shareholder records, streamlined reporting processes and effective mechanisms for tracking changes in beneficial ownership.

Key objectives of the BIR include:

• Transparency of ownership in listed securities
• Supporting regulators in identifying ultimate economic interests
• Strengthening oversight related to market abuse and financial crime

Annual returns and the Companies and Intellectual Property Commission (CIPC) beneficial ownership reporting requirements

In line with the FATF recommendations, South Africa has taken significant steps to strengthen corporate transparency, particularly in relation to beneficial ownership. Amendments to the Companies Act, 71 of 2008, introduced through the General Laws (Anti-Money Laundering and Combating Terrorism Financing) Amendment Act, 22 of 2022, have established enhanced requirements for the reporting and maintenance of beneficial ownership information.

Strate Rule 18 on Beneficial Interest Register (BIR) reporting

Strate Rule 18 now requires Central Securities Depository Participants (CSDPs) and brokers to include personal information such as identity numbers and contact details in BIRs submitted to Strate for onward provision to issuers and regulators, including the South African Revenue Service (SARS) and the CIPC. The amended rules were approved by the Financial Sector Conduct Authority (FSCA) in October 2024 and became effective in mid-March 2025, with penalties initially scheduled to apply from June 2025.

The South African Institute of Stockbrokers (SAIS) raised concerns regarding potential regulatory overreach, compliance with the Protection of Personal Information Act (POPIA), and confidentiality risks. The FSCA advised that the collection of this information is a national imperative and that Strate is best positioned to centralise beneficial ownership information relating to uncertificated securities.

Certain brokers commenced testing the direct submission of BIRs to Strate, whereas these had previously been submitted via the Johannesburg Stock Exchange (JSE). To encourage compliance without the immediate imposition of sanctions, the fines directive (SF.9) was withdrawn. Amendments to the BIR directive (SA.8) were subsequently circulated and approved in August 2025.

Engagements between the relevant stakeholders are ongoing. We understand that further amendments to Rule 18 have been proposed and are expected to be communicated to the market around August 2026.

Enhanced transparency for foreign nominee structures

Strate has issued a draft white paper on enhancing transparency through the disclosure of underlying positions on the BIR in respect of foreign nominee structures.

At a workshop hosted by Strate, it was noted that the publication of Strate Rule 18 establishes a clear and enforceable framework to support improved transparency. These provisions require participants and their clients, including foreign nominees, to disclose the beneficial interests in the securities they hold.

The paper sets out the rationale for enhanced transparency, the relevant global context, associated operational challenges, and a phased approach to implementation. This approach envisages an initial period of voluntary disclosure, progressing towards broader market alignment over time.

Strate has called for collaboration among custodians, nominees, issuers, and regulators to develop a sustainable model for look through disclosure. The paper acknowledges the operational and legal complexities inherent in nominee structures, as well as the need to balance enhanced transparency with the preservation of market integrity.

South African Revenue Service (SARS) tax return disclosure requirement

We note that SARS now requires enhanced disclosure of top shareholders in the ITR14 tax return. Listed companies are currently unable to fully comply with this requirement, as the necessary shareholder information is not provided in the BIR received from Strate.

Shareholders with holdings exceeding 5% are typically foreign and local nominees, large asset managers, and government-related entities such as the Public Investment Corporation (PIC). We are engaging with Strate, which is in turn addressing this matter with SARS. Further updates will be communicated in due course.

Strengthening governance through transparency and accountability

Collectively, these developments signal a continued regulatory shift toward deeper transparency, stronger governance discipline and enhanced oversight across South Africa’s financial market ecosystem.

For issuers and market participants, this reinforces the need for well-structured internal processes that support accurate beneficial ownership disclosure, timely regulatory reporting and robust tax transparency practices. Maintaining high-quality data and disciplined reporting frameworks remains central to meeting regulatory expectations and avoiding operational or compliance gaps.

As South Africa continues to refine its regulatory architecture and align more closely with global standards, proactive compliance and clear governance frameworks will be essential. These measures not only help organisations stay ahead of evolving requirements but also play a critical role in reinforcing investor confidence and supporting the long-term integrity of the market.

South Africa’s capital markets are entering a period of meaningful change. The Johannesburg Stock Exchange (JSE) has recently published proposals and initiatives, and one notable shift is the move towards shorter securities settlement cycles. Many major markets are transitioning from T+2 settlement to T+1 settlement. For South Africa, the decision to adopt or delay a move to T+1 is more than a technical operational change, it has implications for how competitive the country remains as a destination for international investment.

Three developments are particularly relevant for the listed companies and market participants: the proposed move to T+1 settlement, the potential introduction of a central counterparty (CCP) clearing model, and the JSE Simplification Project, which seeks to simplify certain listing requirements.

Faster settlement: Moving to T+1 by 2028

The JSE has proposed shortening the settlement cycle for equity trades from T+3 to T+1 by 2028. The settlement cycle refers to the time between when a trade is executed and when the shares and cash are exchanged. Under the current T+3 model, settlement takes place three business days after the trade. Under T+1, settlement would occur on the next business day.

A shorter settlement cycle offers several benefits. It reduces market risk, improves efficiency and aligns South Africa with international markets. Exchanges such as the New York Stock Exchange and Nasdaq have already transitioned to T+1.

For market participants, faster settlement will require more streamlined operational processes, including quicker trade confirmation, funding, and reconciliation.

Considering a Central Counterparty (CCP) model by 2030

The JSE is also exploring introducing a CCP clearing model for equities by around 2030. A CCP effectively sits between the buyer and the seller in a trade. Instead of each party being exposed to the other’s risk, both transact with the CCP, which guarantees the completion of the transaction.

The structure helps reduce counterparty risk and strengthen market stability, particularly during periods of market volatility. CCP clearing is widely used in major global markets and is considered a key feature of modern financial market infrastructure. While much of the change would occur behind the scenes, it would contribute to a more resilient and intentionally aligned trading environment.

JSE Simplification Project: Key changes to the JSE Listings Requirements

The JSE’s Simplification Project has delivered a fully rewritten set of Listings Requirements, using plain language and clearer regulatory objectives to remove duplication and reduce complexity. The new Listings Requirements are reorganised into a more intuitive structure and are approximately half the length of the previous rulebook, while retaining core investor protections.

Effective dates: The simplified Listings Requirements apply to new listing applicants from 13 January 2026, and to existing issuers from 16 February 2026.

Key changes at a glance

• Lower shareholder approval thresholds: Certain share issues and repurchases now generally require a simple majority (50%) rather than 75%, including specific/general issues for cash, specific/general repurchases, and “sub-floor pricing” in vendor consideration placings.
• Fairness opinions streamlined: Independent fairness opinions are no longer mandatory for related party transactions (including specific issues/repurchases with related parties). Instead, independent directors provide a fair statement, with an external opinion only where required or elected.
• Financial reporting for corporate actions simplified: Certain pro-form financial information requirements for issues for cash and buy-backs have been removed, with greater emphasis on a clear narrative explanation of the financial statement's impact.
• Transaction categorisation clarified: Categorisation percentages must be calculated before transaction terms are announced, and treasury shares are excluded from calculations. Measurement rules for market capitalisation, dilution, and mixed consideration have been streamlined.
• Reduced historical financial information for transactions: For Category 1 transaction subjects and certain substantial acquisitions/disposals involving new applicants or Category 1 subjects, the Listings Requirements generally moves from three years to two years of historical financial information (while new applicants issuing a Pre-Listings Statement still provide for three years).
• Updated Pre-Listings Statement (PLS) framework: PLS disclosure has been repositioned and aligned more closely with the Companies Act/Regulations prospectus disclosures, removing duplication.
• Ordinary course of business flexibility (General Segment and AltX): Where shareholder approval is relevant, the threshold has increased from 30% to 50%.
• Dedicated corporate governance section: The Listings Requirements now consolidates the corporate governance regime into a clearer, stand-alone section, including mandatory fit-and-proper assessments for prospective directors and expanded director integrity disclosures (with a one-business-day announcement obligation for disclosed integrity matters, failing which a negative statement is required).
• Enhanced remuneration-related disclosures: Where 25%+ of shareholders vote against the remuneration policy or implementation report, issuers must disclose how they will engage with dissenting shareholders (in the results announcement) and report back on engagement and steps taken (in the next annual report).
• Companies Act: Harmonised various provisions with the Companies Act, dealing with beneficial ownership, PLS disclosures and meeting notices.
• Targeted reforms for property entities: Property transactions trigger Category 2 treatment at 10% (previously 5%); disclosure moves to a more principle-based and risk-based approach; and valuation reports are narrowed to specified circumstances (e.g., certain new listings and Category 1 property transactions).
• Mining companies: The JSE Readers Panel pre-approval process for competent person’s reports and executive summaries has been removed, supporting cost savings and faster documentation.
• Special Purpose Acquisition Companies (SPACs): Greater flexibility for SPAC applicants to identify an acquisition pipeline prior to listing.
• Expanded and faster secondary listings route: Eligibility for the fast-track route has been broadened (including applicants from the JSE’s approved international exchanges list) and the required primary-listing period has been reduced from 18 months to 12 months.
• Main Board applicant track record relief: Applicants now generally need to demonstrate control over a majority of assets for 12 months (reduced from three years).
• Pyramid companies: The definition has been refined; new pyramid companies may not list, and affected existing issuers must notify the JSE and are provided a two-year remedy period.

What this means for issuers

Overall, the simplified Listings Requirements are intended to be easier to navigate and apply, reduce administrative burden and cost (particularly around circular content and certain third-party reports), and improve clarity in areas that frequently drive interpretive questions – while maintaining disclosure standards and investor protection. Issuers should consider the new Listings Requirements early when planning capital raises, repurchases and transactions, as the revised thresholds and documentation requirements may affect timelines, approvals, and drafting.

Further information: The simplified Listings Requirements are available on the JSE’s website: https://www.jse.co.za/regulation/companies-issuer-regulation

Together, these initiatives represent a broader effort to modernise South Africa’s market structure. Faster settlement, stronger clearing infrastructure and a more streamlined listing framework all point to a market evolving to meet global standards. At Computershare, we continue to monitor these developments closely and will keep clients informed as these changes progress.

The King V Report on Corporate Governance was published on 31 October 2025 and applies to financial years starting on or after 1 January 2026. All listed companies are required to comply with these mandatory governance standards.

The move from the King IV Report to the King V Report is not a shift in foundational principles, but a significant strengthening of expectations. King V reflects a governance environment shaped by greater scrutiny, rising sustainability demands, digital disruption and increased stakeholder activism.

The King Codes have long set the benchmark for leadership, accountability and ethical conduct. While the underlying philosophy remains consistent, King V introduces a higher level of rigour. While King IV encouraged boards to lead responsibly, King V expects boards to clearly demonstrate how they exercise effective oversight in a more complex and transparent operating environment.

What has changed?

The King V Report is now structured into four components, namely, Foundational Concepts, the King V Code, the King V Glossary, and the King V Disclosure Framework, which together enhance accessibility and strengthen accountability through mandatory, publicly available disclosures. This uniform reporting approach, supported by exception reporting, enables stakeholders to more easily identify governance practices and evaluate organisational accountability.

King V reinforces the achievement of four governance outcomes: ethical culture; performance and value creation; conformance and prudent control; and legitimacy, shifting organisations away from checklist style compliance toward demonstration of applied governance and realised value.

A major change is the streamlining of principles from 17 in King IV to 13 in King V. Key consolidations include:

• Principle 1 (Leadership) now incorporates King IV Principles 6 (Governing body as focal point and custodian of corporate governance) and 9 (Performance evaluation of governing body).
• Principle 2 (Ethics) now integrates responsible corporate citizenship (King IV Principle 3).
• Principle 17 (Institutional investors) has been removed to ensure principles apply uniformly across all organisations, regardless of investor type.

Recommended practices are now organised according to the governing body’s core governance cycle: steering and setting direction; policy and planning; oversight and monitoring; and accountability.

Under the strengthened apply, explain and disclose regime, organisations must disclose any non‑adopted recommended practices, explain the reasons, and set out compensating measures. Boards must also provide a concluding statement assessing how the application of King V has contributed to governance outcomes and value creation within the organisation’s economic, social, and environmental context.

1. Sustainability takes centre stage

King IV recognised sustainability as a contributor to long-term value. King V elevates it further, particularly climate risk and environmental oversight, placing it firmly at the core of strategy, capital allocation, and resilience planning. Sustainability is no longer a reporting exercise; it is a strategic governance priority. King V introduces explicit sustainability disclosure based on double materiality: organisations must report on issues that affect financial performance and impact their ability to create long-term value for stakeholders.

2. ESG integration deepens

Where King IV promoted stakeholder inclusivity, King V embeds environmental, social and governance leadership throughout the governance ecosystem. ESG factors must now be integrated into risk governance, remuneration structures, performance metrics and strategic decision-making. The question is no longer whether ESG has been considered, but how it informs each material decision.

3. Stronger expectations of board performance, board composition and independence

King V sharpens expectations related to board composition, evaluations, succession planning and oversight of emerging risks. Boards must show that they are equipped with the competence, diversity and forward-looking skills needed to govern effectively in a rapidly changing environment. Independence is assessed on a “substance over form” basis, defined as “the exercise of objective, unfettered judgement”. For non-executive directors, this means “the absence of any interest, position, association or relationship that a reasonable, informed third party would view as likely to unduly influence or bias decision-making.” The independence criteria have been updated and explicitly address relationships such as related parties, clarifies cooling-off periods and recognises nine years’ tenure as a key factor to evaluate independence.

4. Committee composition requirements

Enhanced committee composition requirements apply for risk and social and ethics committees, with the recommendation of including at least one independent non-executive.

5. Clearer, more insightful disclosure

King V reinforces the need for concise, meaningful reporting. Boilerplate language is discouraged. Disclosures should demonstrate the link between governance decisions, applied principles and outcomes achieved. Moving away from a single integrated document, King V has been deconstructed into four standalone parts with a standardised Disclosure Framework, which supports a more formalised mandatory disclosure.

6. Data, information and technology

King V requires an updated approach to data, information and technology governance with specific reference to AI requirements, emphasizing the need to establish accountability in AI-related decisions, effective management and ethical use of data with clear policies focusing on human oversight, security and privacy.

7. Alignment with global standards

King V reflects global shifts in sustainability reporting and investor expectations. South Africa’s governance framework now aligns more closely with international developments in climate and ESG disclosure, reinforcing its position on the global stage.

Practical steps for implementing King V

1. Update governance documentation
   Ensure board charters and committee mandates reflect enhanced expectations for sustainability, ESG oversight and emerging risk governance.
2. Embed sustainability into strategy
   Integrate climate and environmental considerations into core strategic discussions, not only reporting cycles.
3. Strengthen board capability
   Enhance evaluations, independence assessment frameworks, succession planning and skills matrices with a focus on ESG competence and digital risk awareness.
4. Elevate disclosure quality
   Remove generic statements and demonstrate how governance principles translate into action, decision-making and measurable results. Design customised disclosure templates that align with the King V Disclosure Framework requirements.
5. Align incentives with long-term value
   Link executive performance metrics to sustainability outcomes and stakeholder value creation.
6. Conduct a King IV vs King V gap analysis
   Identify areas where governance practices need improvement to meet the heightened expectations of King V.
7. Shift leadership dialogue
   Move from conversations about compliance to conversations about credibility, resilience and visible stewardship.

What does King V mean for organisations?

King IV modernised governance and moved it beyond compliance. King V builds on this maturity by raising expectations around transparency, accountability and strategic integration.

This shift acknowledges a business environment defined by:

• Greater public scrutiny
• ESG-driven investor priorities
• Climate-related volatility
• Accelerating digital transformation
• Increasing trust deficits

In this world, governance must be proactive, strategic and demonstrable. King IV encouraged responsible leadership, but King V expects leadership that is visible, sustainable and accountable.

Conclusion

The transition from King IV to King V is not a change in governance philosophy but an evolution of governance discipline. Ethical leadership and sustainable value creation remain central, but the required level of transparency and accountability has increased.

Organisations that respond proactively will strengthen their governance resilience and build trust with investors, regulators and stakeholders. King V represents both an expectation and an opportunity to demonstrate leadership that stands up to greater scrutiny and delivers long-term, sustainable value.