The Financial Sector Conduct Authority (FSCA) has cancelled the exchange licence of stock exchange, ZAR X,<\/p>\n
This follows the suspension of the exchange’s licence in August 2021 over liquidity and capital adequacy concerns.<\/p>\n
According to the FSCA, the cancellation of ZAR X\u2019s licence follows its prolonged non-compliance with the liquidity and capital adequacy requirements of an exchange in South Africa.<\/p>\n
In line with the sector’s regulations, ZAR X is now required to immediately inform all affected persons and all affected stakeholders of the immediate cancellation of its licence and cease all business of an exchange.<\/p>\n
“No further trading of securities listed on the exchange is permitted and no new listings may be admitted,” the FSCA said.<\/p>\n
The group also has to take necessary steps to facilitate the delisting of all listed securities on the exchange and provide weekly progress reports to the satisfaction of the FSCA.<\/p>\n
ZAR X has 14 days to comply.<\/p>\n
FSCA Commissioner Unathi Kamlana said the cancellation decision was not taken lightly.<\/p>\n
“However, the decision follows a prolonged remedial process which was initiated to assist ZAR X to become compliant to the regulatory framework. The remedial process failed to yield positive results,” he said.<\/p>\n
ZAR X launched in 2016 and was the first company to be awarded a stock exchange licence in South Africa in 60 years. It was the first new competitor to the Johannesburg Stock Exchange (JSE).<\/p>\n
The exchange targeted smaller businesses and aimed to use technology to bring stock trading to a wider audience. It drew investment from various sources, including the Public Investment Corporation, which acquired a 25% stake in the group in 2018.<\/p>\n
South Africa now has four licensed securities exchanges which remain operational within the South African financial markets.<\/p>\n
The JSE is South Africa’s first and oldest exchange and has been in operation since 1887.<\/p>\n
After ZAR X entered the market in 2016, another secondary exchange, 4AX launched in March 2017 and later rebranded to the Cape Town Stock Exchange in October 2021.<\/p>\n
Another stock exchange, A2X was licenced in April 2017. The latest exchange to be licenced is the Equity Express Securities Exchange (EESE), which was granted its licence in September 2017.<\/p>\n