REUTERS, Johannesburg | Monday
THE Johannesburg Stock Exchange (JSE) is considering demutualising as part of a major restructuring exercise to boost liquidity and improve the market’s efficiency.
The JSE is the world’s 19th largest exchange, with market capitalisation of some $250bn, but it ranks 34th in liquidity terms.
It will now implement further measures from December to revamp Africa’s largest bourse in line with what it calls international best practice, including the introduction of a board of directors representative of a broad interest base and an advisory committee including a range of industry specialists.
The bourse has denied that the flurry of new measures by the exchange were a response to attempts by a private firm to set up a rival exchange, saying these plans had been in the pipeline since a post-millennium strategic review completed in March.
eChange, a previously unknown private firm, says it plans to set up a new electronic bourse by 2001. Former JSE senior executive Mike Bastenie, who is driving the plans, promises to undercut the JSE on trading, clearing and settlement charges.
The JSE has faced criticism from users that its fees are too high and there is concern about the cost of introducing its electronic settlement system called Strate, which should be fully operational by the end of 2001.
“The restructuring positions the JSE to address the challenges ahead and will take effect on December 1, 2000, after the relevant changes to the JSE’s constitution and rules have been implemented,” said Nicky Newton-King, director for new business and general counsel at the JSE.
Following those changes, JSE members – who include brokerage firms – would focus on the possibility of demutualising the exchange.
In August, the JSE unveiled a long-awaited revamp of its listing rules to bring it in line with global market standards of corporate governance and transparency.
It said it was reviewing its electronic trading system to improve efficiency and would offer delayed share price data for the first time.