ZAR X was granted a stock exchange licence by the Financial Services Board in March, and is set to start trading on 1 September 2016.
ZAR X promises a “low-cost, simple, and convenient trading platform”, which will allow South Africans to trade shares – even if they have never invested money or opened a bank account before.
“The platform is designed to empower those who don’t have skills or experience in investing to easily and safely build a brighter financial future for themselves,” said ZAR X.
The company said its platform will give business enterprises a flexible, transparent, and affordable way to list their restricted or limited share offerings.
ZAR X versus the JSE
ZAR X CEO Etienne Nel told BusinessDay TV they will be a fully-fledged independent stock exchange, similar to the JSE.
Nel said they do differ from the JSE, though, as their focus is the restricted market and mid-sized capitalization type companies (R500-million to R5-billion companies).
“The minute that you want to have complex listing requirements, lots of liquidity, and broad appeal, go to the JSE,” said Nel.
Nel said their initial focus will be on low-hanging fruit – the companies that the JSE cannot list, like the traditional over-the-counter market and the related shares around this market.
He said an advantage is the ZAR X’s T0 settlement model, where the transaction is settled and cleared instantly.
“If you trade on the JSE today, your transaction will only be settled and cleared in five working days.”
He said their T0 settlement model is groundbreaking, and reduces settlement risk.
“Our market which we are offering is a real market. There is no additional activity over and above standard trades. We have no derivatives or short selling.”
Technology companies interested in listing on ZAR X
Nel said they have eight companies which have committed to listing on ZAR X, and many others which have shown an interest in joining.
ZAR X director Geoff Cook told MyBroadband that a number of technology companies have approached them to list on the exchange.
Due to confidentially clauses, the names of these companies cannot be disclosed.