It has been four years since the arrival of alternative stock exchanges in South Africa, which have styled themselves as challengers to the JSE’s mighty monopoly, which spans more than a century.
But it will still be a long road before the listings space is democratised and SA moves towards greater competition, judging from the regulatory troubles faced by one of the longest-running alternative stock exchanges.
ZAR X is a small exchange that launched in February 2017 and has since managed to attract seven company listings to its platform that have a combined market capitalisation of R5-billion.
ZAR X has found itself on the wrong side of the law and its exchange licence has been temporarily suspended by SA’s financial markets regulator, effectively blocking the sale and purchase of shares, as well as company listings on its platform for three months. This will hurt ZAR X’s financial position and liquidity profile as it generates money from the fees it charges brokers to execute trades on its platform.
The Financial Sector Conduct Authority (FSCA) is vexed that ZAR X has, since 2019, not complied with aspects of the Financial Markets Act. It…