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January 24th, 2014
Johannesburg Stock Exchange

Johannesburg Stock Exchange

Nicky Newton-King, Johannesburg Stock Exchange CEO

The Johannesburg Stock Exchange (JSE), established in 1887, is licensed as an exchange under the Securities Services Act and Africa’s premier exchange.

It has operated as a market place for the trading of financial products for nearly 125 years.

In this time, the JSE has evolved from a traditional floor based equities trading market to a modern securities exchange providing fully electronic trading, clearing and settlement in equities, financial and agricultural derivatives and other associated instruments and has extensive surveillance capabilities.

The JSE is also a major provider of financial information. In everything it does, the JSE strives to be a responsible corporate citizen.

The JSE has a market capitalization of ZAR2.044 billion

History of the JSE

1887 – The JSE is established as a stock exchange.

1947 – The first legislation applicable to the operation of exchanges is introduced with the Stock Exchanges Control Act.

1963 – JSE becomes a member of the World Federation of Exchanges.

1978 – The JSE achieves a market capitalisation of ZAR51 billion, eight times the market size in 1961 – a record for the JSE.

1979 – Krugerrands are officially listed.

1995 – Substantial amendments are made to the legislation applicable to stock exchanges which result in the deregulation of the JSE through the introduction of limited liability corporate and foreign membership. The South African Institute of Stockbrokers is formed to represent, train and set standards for the qualification of stockbrokers. In December, the market capitalisation exceeds R1 trillion for the first time.

1996 – The open outcry trading floor is closed on 7 June and replaced by an order driven, centralised, automated trading system known as the Johannesburg Equities Trading (JET) system. Dual trading capacity and negotiated brokerage is introduced. The value of shares traded annually reaches a new record of ZAR117.4 billion and the new capital raised during the year reaches ZAR28.4 billion.

1997 – SENS (Securities Exchange News Service – known then as Stock Exchange News Service, a real time news service for the dissemination of company announcements and price sensitive information, is introduced. SENS ensures early and wide dissemination of all information that may have an effect on the prices of securities that trade on the JSE.

1999 – In January, the new Insider Trading Act is introduced based on recommendations made by the King Task Group on Corporate Governance, which included representatives from the JSE. The JSE establishes, in collaboration with South Africa’s four largest commercial banks, the electronic settlement system, STRATE, and the process to dematerialise and electronically settle securities listed on the JSE on a rolling, contractual and guaranteed basis is initiated.

2000 – The JSE successfully lists Satrix 40, the JSE’s first exchange traded fund, which tracks the top 40 companies listed on the JSE’s Main Board.

2001 – The JSE acquires SAFEX, the South African Futures Exchange, and becomes the leader in both equities and equity and agricultural derivatives trading in the South African market. The JSE enters into a joint venture with GL Trade SA to provide an internationally accepted trading front-end to the equities market, known in South Africa as TALX.

2002 – All listed securities are successfully dematerialised and migrated to the STRATE electronic settlement environment, with rolling, contractual and guaranteed settlement for equities taking place five days after trade (T+5). Since the completion of this process, the JSE has had a zero failed trade record, thereby improving market integrity immeasurably and representing a major milestone in winning both local and international investor confidence.

The JET system is replaced by the LSE’s SETS system, hosted by the LSE in London. The system, operated from London by the LSE, is called “JSE SETS”. The JSE also introduces the LSE’s LMIL system, known in South Africa as InfoWiz to provide a world-class information dissemination system and substantially improve the distribution of real-time equities market information. More than just a change in technology platforms, the introduction of JSE SETS also represented the forging of a strategic alliance with the LSE and improved the international visibility of the JSE.

The JSE also takes an important step forward in its campaign to modernise its operations with the launch of a new free float indexing system in conjunction with FTSE, namely the FTSE/JSE African Index Series to replace the then existing indices.

The FTSE/JSE African Index Series has enhanced the investibility of South African stocks by providing foreign investors with an indexing system with which they are familiar. Two new exchange traded funds are launched, namely Satrix Fini, which tracks the top 15 financial counters and Satrix Indi, which tracks the top 25 industrial counters, on the Main Board of the JSE.

2003 – The JSE launches AltX. AltX has been developed in partnership with the dti.

2004 – The JSE launches the Socially Responsible Investment (SRI) Index, which measures compliance by companies with triple bottom line criteria around economic, environmental and social sustainability.

2005 – The JSE launches Yield-X, its market for a wide range of interest rate products. This world-first allows for the trading of both spot and derivative interest rate products on one platform with multi-lateral netting across all products.

The JSE demutualises and incorporates in South Africa as JSE Limited, a public unlisted company on 1 July 2005. Existing rights holders of the JSE become its first shareholders and for the first time in the JSE’s history, a person who is not an Authorised User of the JSE or a stockbroker can obtain an ownership interest in the JSE.

Immediately on demutualisation, JSE rights were converted into JSE Shares and each rights holder received 1 000 JSE Shares for every 1 JSE right held. This resulted in the JSE having an authorised share capital of ZAR40 million made up of 40 000 000 ordinary shares of ZAR1.00 each, of which 8 340 250 ordinary shares were issued to previous rights holders. Over the counter trading in JSE Shares commences with settlement of the trades occurring through STRATE.

2006 – In June 2006 the JSE Ltd lists on the Main Board

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