The Johannesburg Stock Exchange (JSE) will no longer be the only stock market in South Africa. ZAR X has been granted their stock exchange licence from the Financial Services Board (FSB). This new and innovative entity is set to bring about much needed change within the sector.
The FSB approval “signifies a new era in tech-friendly and user-focused share trading,” stated ZAR X’s chief executive officer, Etienne Nel.
The CEO further added that it “creates choice and offers corporate South Africa and the public at large a new opportunity to reduce unnecessary red tape, speed up transaction times and open up equity-based wealth creation to sectors of the South African population that for far too long have been largely excluded from full participation in the financial markets.”
Among the highlighted benefits to investors is the elimination of settlement risk in the market through ‘T+0 or real time settlement.’ This comes as a major advance on the “traditional T+3 norm – as well as introducing fintech innovation that will allow investors to transact via their mobile device. Greater efficiency is accompanied by enhanced security of investor assets and the provision of value-added services such as free safe custody facilities,” said Nel.
ZAR X’s listing process has also been designed with the investor in mind, as they are largely principle-based, making room for a more flexible and efficient listings process.
“ZAR X will initially offer a primary board for conventional company listings, an investment entities board that will cater for structured products and exchange traded funds and a ‘restricted market’ for BBBEE shares, Agri shares and other restricted securities that can only be traded within a clearly defined investor-base,” Nel explained.
He added that the FSB decision had been one they had been eagerly awaiting for more than a year. Having met all the Financial Markets Act (FMA) requirements, the ZAR X team aim to abide by the global practice standard.
Operations are set to commence today, 5 September.
“ZAR X is now in a position to formally engage brokers who will then commence with the on boarding of investors. We are pleased to announce that Senwes and Senwesbel will be the first companies to list and will commence trading on Monday, 3 October 2016. Other companies that have committed to listing on ZAR X are now able to commence with their listings process,” stated Nel.