In line with a new-look JSE, the role of the so-called sponsoring broker was changed significantly some years ago. The JSE has changed beyond all recognition from a clubby, relationship-orientated institution into a highly professional, even clinical one. Not only has the term changed from sponsoring broker to sponsor, but the role and responsibilities have also changed profoundly.

In the old days - until about a decade ago - most sponsoring brokers were divisions of stockbroking firms. They did some reasonable business as part of an overall corporate finance division within a stockbroking firm. But then, as now, the real money was made in advising JSE-listed clients during corporate actions and events, like acquisitions, mergers and takeovers. The sponsorship side was always regarded as being fairly dull, albeit necessary from a regulatory perspective.

With the change from sponsoring broker to sponsor, the field has widened dramatically. Few independent stockbrokers remain since deregulation of the JSE in the 1990s, and those that do tend to concentrate on private client stockbroking. Rarely, if ever, do they get involved with sponsor or corporate finance work.

The large JSE-listed companies tend to use banks, multinational stockbrokers, investment banks and the large accounting firms for their sponsor work - though this is not cast in stone. Their main work is undoubtedly corporate finance, and the sponsor role is often seen as being a necessary evil in order to gain this work. The fees in the corporate finance arena are lucrative, while sponsor work is far less profitable.

Rand Merchant Bank has the largest number of sponsorships under its belt, followed by the combined resources of Investec Bank and Investec Corporate Finance. It's perhaps not surprising that these two highly entrepreneurial institutions are so heavily involved in sponsorship, as it allows them to stay close to any potential deal-flow action. Sasfin, another entrepreneurial organisation, has 26 sponsorships.

Of the big four banks, only Nedbank has a respectable number of sponsorships (19). Again, this is perhaps not surprising, considering that about two-thirds of its business is derived from corporate and investment banking and a relatively small proportion from retail banking.

BJM, SA's largest independent stockbroker, has 17 sponsorships. It has only recently begun reconstructing a full-service corporate finance function and has apparently made some reasonable profits from sponsor work.

In recent years, a new breed of sponsor has emerged, specialising in smaller companies. They have the time, energy and expertise to devote to these companies, whereas the larger sponsors don't. The deals that smaller companies get involved in tend to be relatively small, and it's frankly not worthwhile for large sponsors and corporate finance companies to get involved for the small fees offered.

But the specialist firms have far lower overheads and are nimble. They can offer very low fees to their client base, secure in the knowledge that the far more lucrative corporate finance work will follow in due course.

With the launch of AltX, the JSE's small-cap exchange, a new breed of sponsor was established - the designated adviser (DA). In terms of the JSE listings requirements, a DA must be retained by the company at all times, not just for corporate events. The DA is required to attend all board meetings to ensure that all the listings requirements are met, and to guide the company in a competent, professional and impartial manner.

If the company fails to retain a DA, it must make arrangements to appoint a new one within 10 business days, failing which the company faces suspension of trading of its securities. If a DA is not appointed within 30 days of its suspension, the company faces the termination of its listing without an offer to minorities.

The most prominent of the specialist sponsors are Java Capital (16 sponsorships) and Exchange Sponsors (four sponsorships). Other independent operations include Arcay Corporate Services (1), Arcay Moela Sponsors (10), Bridge Capital (9), Questco, River Group (2), Merchant Sponsors (9) and Vunani Corporate Finance (6).

Vunani is predominantly black-owned and is itself listed on the JSE. CEO Ethan Dube is a veteran corporate financier, having made his name some years ago with Cape Town-based African Harvest. And his enthusiasm for the market doesn't just stop at Vunani - he is on the board of six AltX-listed companies in which Vunani has a stake.