South African Futures Exchange

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South African Futures Exchange

The South African Futures Exchange (SAFEX) consists of a financial markets division and an Agricultural Markets Division (AMD).

The measures of the financial markets division have grown from R3.4 million at its formation in 1990 to R69 million at June 1997. SAFEX has experienced a growth of 10.36 million contracts during the 1996-97 financial year, a year-on-year increase of 35 percent.

AMD was formed in 1995 and by June 30, 1997 the net reserves amounted to R3.2 million compared with the original operating forecast of R1.4 million.

SAFEX has kept abreast of developments in the world financial markets, and continues to make steady progress despite intensifying competition from international derivative exchanges and over-the-counter alternatives. The Safex reserves have grown sufficiently to allow a significant reduction in the fees it levies per future or options contract. Consequently, all fees were reduced by 50 percent in 1997 and the changes on allocated trades were removed.

The Exchange is directed by an executive committee consisting of up to 11 elected members all with full voting rights, as well as an additional group of non-voting, nominated members that the executive appoints. Policy decisions are made by the committee and carried out by a full-time management team headed by the CEO.

The Exchange is governed by members, but through their use of the exchange services, they are also its clients. The exchange is a Self Regulatory Authority and exercises its regulatory functions in terms of the Financial Markets Control Act, 1989 and its rules. The Exchange, in turn, is supervised by FSB.[1]

The South African Futures Exchange was acquired by the Johannesburg Stock Exchange (JSE Limited) in 2001.[2]


  • April 1987: Rand Merchant Bank Limited (RMB) start 5 trading "futures" contracts on various equity indices and long bonds. RMB is the exchange, clearing house and only market maker.
  • September 1988: Twenty-one banks and financial institutions meet and establish the South African Futures Exchange (Safex) and the Safex Clearing Company (Safcom).
  • April 1990: Safcom takes over operation of the informal futures market from RMB. Futures contracts are available on equity indices, long bonds and money market products.
  • August 1990: Enabling legislation (the Financial Markets Control Act, 1990) is enacted and Safex is officially licensed as a derivatives exchange. Officially opened on 10 August 1990 by the Minister of Finance. Monthly volumes are approximately 60,000 contracts, with 10,000 open interest.
  • October 1991: Permission received from the South African Reserve Bank for non-residents to participate on Safex via the Financial Rand system.
  • June 1992: Monthly volumes start consistently exceeding 100,000 contracts.
  • October 1992: Options-on-futures launched together with a world-class, portfolio-scanning-type margining system.
  • January 1993: Monthly volumes exceed 200,000. Open interest exceeds 100,000 contracts.
  • December 1993: Volumes exceed 1 million per month for the first time. Open interest is over 500,000 contracts.
  • January 1995: Safex Agricultural Derivatives Division opened.
  • May 1996: Introduction of fully-automated trading through a specifically designed system that was written in South Africa.
  • January 1997: Open interest exceeds 1 million contracts.
  • September 1997: Individual equity options introduced on the six largest equity counters.
  • March 1998: Options introduced on agricultural products.
  • February 1999: The Individual Equity Options are replaced with twelve Individual Equity Futures and Options on the futures. Twelve IEF's listed.
  • July 2000: New Government Bond Index launched (GOVI).
  • August 2000: Individual Equities contract listed has increased to 49.
  • May 2001: Safex and JSE members agree to buyout of Safex by JSE Securities Exchange. Effective date of transaction to be 1 July 2001. The JSE agrees to retain the Safex branding and creates two divisions - Safex Financial Derivatives and Safex Agricultural Derivatives.[3]




  1. Press Release. South African Missions in New York.
  2. Unanimous approval for JSE acquisition of Safex.
  3. Official SAFEX Website. JSE Limited.