JSE Regulatory Entity

JSE-Regulatory-Entity

The Johannesburg Stock Exchange (formerly known as the JSE Securities Exchange) is the largest in Africa. Since 2000, it has been located in Sandton, Johannesburg, South Africa, after moving from downtown Johannesburg.

According to the JSE website, there were 473 listed companies, and the market capitalisation was $182.6 billion. There was also a monthly average traded value of $6.399 billion. The JSE estimates the company’s market capitalisation at $1005 billion as of August 2020.

The JSE offers investors free access to regulated markets where they can trade securities. In addition, by investing in the financial system, investors receive dividends.

The Exchange provides a means of raising primary capital by reinvesting cash resources into productive economic activities. Furthermore, this boosts the economy while creating jobs for citizens.

In addition to the 16 people who have voting rights, there is an honorary committee. A committee of stockbrokers is typically responsible for selecting an executive president. Also, they can select five outside members, with a maximum of eight or eleven total members.

Under the management of the executive president, executive committees are responsible for the interpretation and execution of policy decisions.

They are also customers who use the services and facilities that the JSE offers, concomitant with their role as Exchange memes. Following the JSE’s operating license, the FSB regulates the Exchange each year.

History

In 1963, the JSE became a member of the Federation International Bourses de Valeurs (FIVB). In 1978, the JSE moved to 17 Diagonal Street near Kerk Street in Johannesburg. As a member of the American Stock Exchanges Association since 1993, the JSE has been involved in stock exchanges worldwide.

A change in the trading system occurred in the electronic system on June 7, 1996, after 108 years of an open outcry system. At the corner of Maude St. and Gwen Lane, the Johannesburg Securities Exchange moved into its present location in Sandton, Gauteng, in September 2000. Then, the JSE Securities Exchange became the new name of the Exchange.

The London Stock Exchange and the Johannesburg Stock Exchange signed an agreement in 2001. It allows two exchanges to cross-trade and replaces the LSE’s system with that of the JSE. Further, adding government and corporate bonds and interest rate derivatives to the JSE debt market was the 2009 acquisition of the Bond Exchange of South Africa by the JSE for R240 million.

In June 2012, the JSE joined the UN Sustainable Stock Exchange initiatives on the eve of the United Nations Conference on Sustainable Development. In addition, JSE rebranded on April 14, 2014, to showcase the bourse’s identity as a space connecting investors to growth opportunities in South Africa and globally.

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JSE TradElect

An Automated electronic trading system is the Millennium Exchange in JSE. The Millennium Exchange replaced the JSE TradElect in 2012, which had replaced the JSE SETS in April 20007, which had previously replaced the JSE JET in May 2002.

The new Millennium Exchange involved moving the platform from London to a new platform situated in the JSE building in Johannesburg, thereby speeding up transaction execution. Order-driven, central order books run opening, intraday, and closing auctions at the JSE.

About the Stock Exchange

The Johannesburg Stock Exchange (JSE) offers a diverse range of securities in a secure, efficient secondary market, supported by post-trade and regulatory services. Also, the investors who want exposure to South Africa’s leading capital markets and the broader African continent choose JSE to gain exposure to their services and offers.

According to market capitalisation, the JSE is currently ranked 17th globally and is the biggest stock exchange in Africa. When South Africa’s first gold rush began in 1887, the JSE was formed. In 1947, the JSE enacted the first law on the financial markets and in 1963 joined the World Federation of Exchanges.

In the early 1990s, it was upgraded to an electronic system. The JSE offers five financial markets, namely Equities, Bonds, and Financial, Commodity, and Interest Rate Derivatives.

Alternative Exchange

The Alternative Exchange is a stock exchange that Johannesburg Stock Exchange sets to accommodate small and medium-sized companies with high growth potential. Likewise, its website mentions that AItx is the alternative Exchange in the JSE. The JSE Limited operates the bourse, a company that listed on its main board in June 2006.

Regulatory model of JSE

Strong Exchange Self-Regulatory Organization (SRO) Model

Since the JSE exchange is one of the top regulators of the market, it sets and enforces the requirements for listing and membership, and trading rules. Under the supervision of the Financial Services Board (FSB), JSE performs its regulatory duties.

In the future, South Africa will likely employ a twin peaks system of regulatory oversight. It will dramatically alter the regulatory landscape. With the new system, prudential supervision will fall behind the South African Reserve Bank (SARB). There is a possibility that FSB will enforce market conduct issues.

Sustainable Bond Listing

The Green Bond Segment has become a full-fledged Sustainability Segment. Currently, the program includes Green Bonds (such as energy, water, waste), social bonds (such as housing, education, and health), and Sustainability bonds that combine green bonds with social bonds.

To accommodate debt securities, the JSSE will introduce two new segments. These include the sustainable segment consisting of sustainability, use of proceeds debt securities and sustainability-linked debt securities, and the Transition Segment consist of Transition Debt securities.

As part of amending the debt listing requirements, JSE intends to expand the current sustainability segment. Also, JSE introduced the transition segment.  Sustainability Use of Proceeds Debt Securities will replace the current debt instruments under the Sustainability Segment. It is to align with its sustainability use of proceeds objective to accommodate the new securities

Bottom line

Hence the Johannesburg Stock Exchange (JSE) is among the top 20 exchanges by market capitalisation globally. Also, it is Africa’s largest stock exchange.

The Exchange has a good track record, has a good regulatory structure, and adheres to International market standards. Interestingly, many of the companies listed on the JSE are also listed in other stock exchanges. The list consists of South African companies listed on another exchange and companies based outside Africa listed on the JSE as a secondary listing.

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