JSE Limited

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JSE Limited
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Founded 1887
Headquarters Johannesburg, South Africa
Key People Nicky Newton-King, CEO; Humphrey Borkum, Chairman
Products Cash equities and exchange-traded funds, equity and agricultural futures and options
Website www.jse.co.za

JSE Ltd, formerly known as the Johannesburg Stock Exchange, is an electronic multi-asset class platform offering trading, clearing and settlement of cash equities, equity and agricultural derivatives and interest-rate products. JSE demutualized in 2005 and listed on the main board of its own exchange in June 2006.

The group expanded into derivatives with the 2001 acquisition of the South African Futures Exchange (Safex).

JSE ranked as the world's 24th-largest derivatives exchange by volume in 2018, with 192.3 million contracts traded, down 50 percent from a year earlier, according to the Futures Industry Association's annual volume survey. It ranked as the 19th largest stock exchange in 2018 by market capitalization and the largest on the African continent.[1]


History

The Johannesburg Stock Exchange was founded in 1887, providing a listings platform for companies in the burgeoning gold-mining business. JSE joined the World Federation of Exchanges in 1963 and upgraded to an electronic trading system in the early 1990s. In November 2001 it changed its name to the JSE Securities Exchange South Africa following its acquisition of the Safex in the same year.

The mutually-owned group started its conversion to a listed company in 2000, and was converted into a public unlisted company on July 1, 2005, changing its name to JSE Limited. It listed shares on the main board in 2006.

The exchange closed its trading floor on June 7, 1996, and replaced its electronic system with the London Stock Exchange’s SETS platform in 2002. The main equities board was supplemented with the AltX exchange for small and medium-sized companies in 2003, and the Yield-X platform for interest-rate products was added in 2005.[2]

The Safex and its clearinghouse were established by 21 banks in September 1988, and officially licensed as a derivatives exchange trading equity index products on Aug. 10, 1990, with non-residents permitted to trade the following year. Options were launched in 1992, with agricultural products started in 1995.[3] JSE acquired the business from its owners for R152m on August 6, 2001, two years after a plan to merge the two exchanges collapsed.

In 2003, JSE launched an alternative exchange, AltX, for small and mid-sized listings, followed by the Yield X for interest rate and currency instruments.

JSE overtook the National Stock Exchange of India in 2007 to become the world’s largest platform for single-stock futures in 2007. It was ranked sixth in 2012.[4] The Safex brand is retained for agricultural and financial futures and options, including its benchmark white maize contract.

JSE South Africa, the parent company of the Johannesburg Stock Exchange and the South African Futures Exchange, acquired the Bond Exchange of South Africa (BESA) in 2009.[5] BESA was partly owned by the New Zealand Stock Exchange.[6]

The exchange re-branded in April 2014 in order to "demonstrate the bourse's identity as a modern African marketplace that connects investors to growth opportunities globally," according to an exchange press release. JSE changed its logo to a black, white and green combination and integrated the brand names of its acquisitions, such as the Bond Exchange of South Africa (BESA) and the South African Futures Exchange (SAFEX), into the JSE.[7]

In May 2019, JSE implemented Nasdaq’s clearing technology platform for its equity and currency derivatives market. JSE said the launch was part of a multi-year project called ITaC, focused on migrating all of its markets to Nasdaq’s clearing platform.[8] [9]

In June 2019, the exchange went live with a new trading platform for its equities, equity derivatives and FX derivatives from LSEG Technology, a subsidiary of the London Stock Exchange Group. The platform, called Millenium Exchange, offers implied trading, multi-legged trading and options theoretical pricing.[10]

Product Development

Cash equity trading remains the JSE's largest business segment, accounting for 21.4 percent of revenues in 2006, with equity derivatives adding 13.7 percent and the agricultural complex a further 6.4 percent.

The single-stocks futures complex has expanded into one of the world's largest, overtaking the National Stock Exchange of India in volume terms at the start of 2007 as a mix of aggressive marketing to retail and wholesale clients and regulatory changes helped business triple in both 2005 and 2006, with open interest rising eight-fold. The small size of the JSE's contracts relative to rivals leaves it ranked sixth in notional value.[11]

In April 2015, the Johannesburg Stock Exchange signed a multi-year licensing agreement with Eris Exchange to list swap futures contracts. The agreement allows the exchange to use the Eris methodology for constructing swap futures which replicate the economics of OTC swaps. JSE will begin by focusing on listing and trading interest rate swap futures based on the Johannesburg Interbank Agreed Rate and denominated in South African Rand.[12]

Key People

  • Nicky Newton-King, CEO
  • Humphrey Borkum, Chairman of the Board
  • Aarti Takoordeen, Chief Financial Officer
  • Mark Randall, Director of Information Services
  • Hendrik Kotze, Chief Information Officer
  • John Burke, Director of Issuer Regulation
  • Donna Nemer, Director, Capital Markets

References

  1. 2016 Annual Volume Survey. FIA magazine.
  2. Official History. JSE.
  3. Official History. Safex.
  4. 2007 Market Highlights. WFE.
  5. JSE Overview. JSE.
  6. News Briefs. FI Magazine.
  7. THE JSE TRANSFROMS ITS BRAND IDENTITY. JSE.
  8. Nasdaq deploys clearing platform for Johannesburg Stock Exchange. The Trade News.
  9. Johannesburg Stock Exchange launches new clearing platform from Nasdaq. Nasdaq.
  10. Johannesburg Stock Exchange adopts Millennium platform for equities and FX derivatives. The Trade.
  11. IOMA Derivatives Market Survey 2006. World Federation of Exchanges.
  12. Swap futures to reach South African markets. The Trade.
Last modified on 12 June 2019, at 08:57