{"id":843231,"date":"2025-11-17T07:00:00","date_gmt":"2025-11-17T05:00:00","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=843231"},"modified":"2025-11-14T16:05:40","modified_gmt":"2025-11-14T14:05:40","slug":"the-138-year-old-company-that-could-be-hit-with-a-record-breaking-fine-in-south-africa","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/finance\/843231\/the-138-year-old-company-that-could-be-hit-with-a-record-breaking-fine-in-south-africa\/","title":{"rendered":"The 138-year-old company that could be hit with a record-breaking fine in South Africa"},"content":{"rendered":"\n

The Johannesburg Stock Exchange, a 138-year-old institution that has long dominated South Africa\u2019s financial markets, is now facing the possibility of a record-setting penalty.<\/p>\n\n\n\n

The Competition Commission wants the JSE fined 10% of its annual turnover after accusing it of using its power to block rival exchange A2X from growing.<\/p>\n\n\n\n

The case began when A2X filed a formal complaint in October 2022. Competition Commission spokesperson Siyabulela Makunga said the alternative exchange was launched in 2017.<\/p>\n\n\n\n

He added that A2X alleged that the JSE used various forms of exclusionary conduct to slow its expansion in the secondary trading market.<\/p>\n\n\n\n

A2X entered a space historically controlled by the JSE to bring more competition to South Africa\u2019s capital markets.<\/p>\n\n\n\n

Makunga said the Commission\u2019s investigation found that A2X struggled to gain trading volumes because it could not easily connect with the JSE\u2019s systems.<\/p>\n\n\n\n

Since the JSE houses South Africa\u2019s primary listings, brokers trading across markets need to interact with the JSE to buy and sell the same shares on multiple platforms.<\/p>\n\n\n\n

According to Makunga, this is where the JSE made things difficult. \u201cAn exchange in a secondary market requires a sufficient interaction with the JSE trading system,\u201d he explained.<\/p>\n\n\n\n

If brokers cannot execute trades smoothly across both markets, the process becomes slow, complicated, and more expensive\u2014problems that hit smaller and historically disadvantaged brokers the hardest.<\/p>\n\n\n\n

The Commission believes the JSE created obstacles that \u201cstarved A2X of trading volumes\u201d and protected its dominant position.<\/p>\n\n\n\n

The key issue is the JSE\u2019s Broker Dealer Accounting (BDA) system, which brokers must use to allocate trades.<\/p>\n\n\n\n

Makunga said the JSE not only enforced mandatory use of the BDA system but also failed to ensure that it worked well with A2X\u2019s systems.<\/p>\n\n\n\n

This created barriers for brokers who needed to allocate trades across the two platforms in a simple, efficient way. <\/p>\n\n\n\n

A deliberate strategy from the JSE<\/h2>\n\n\n
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A2X CEO Kevin Brady <\/em><\/figcaption><\/figure><\/div>\n\n\n

With these findings, the Commission has referred the case to the Competition Tribunal, where the JSE must defend itself or risk one of the largest fines ever proposed in South Africa. <\/p>\n\n\n\n

\u201cThe Commission strongly believes that there is a case to answer,\u201d Makunga said. A2X CEO Kevin Brady added that the BDA system is at the heart of the problem. <\/p>\n\n\n\n

In most markets, exchanges set technical standards and let brokers choose any system that meets those standards. <\/p>\n\n\n\n

However, the JSE\u2019s BDA system is a closed system that other platforms cannot access or integrate with easily. \u201cYou can\u2019t have a mandated system that\u2019s closed,\u201d Brady argued.<\/p>\n\n\n\n

Brady explained why this matters in practical terms. Brokers often need to combine trades across markets\u2014for example, buying shares on the JSE and A2X and grouping them into one transaction.<\/p>\n\n\n\n

He added that the system even treats some trades differently, allowing certain transactions to move from A2X to the JSE but blocking the reverse.<\/p>\n\n\n\n

\u201cThis is not a regulatory issue. This is a deliberate strategy from the JSE to make it difficult for brokers to easily and seamlessly trade and allocate across markets,\u201d he said.<\/p>\n\n\n\n

Brady also believes South Africa\u2019s broader regulatory framework is outdated compared to markets in Europe, India, and the United States.<\/p>\n\n\n\n

Reforms are being drafted, including new conduct standards and the long-delayed Financial Markets Review, but these changes are expected to take years.<\/p>\n\n\n\n

Until then, he said that the Competition Commission\u2019s case is necessary. \u201cThey\u2019ve done their homework.\u201d<\/p>\n\n\n\n

Makunga added that the Commission is focused on fairness and creating a market where newer and smaller brokers can participate fully. <\/p>\n\n\n\n

\u201cWe are preoccupied with levelling the playing field,\u201d he said. Efficient and open markets, he argues, create opportunities for broader participation, economic growth, and job creation.<\/p>\n\n\n\n

The JSE said it has acknowledged the Commission\u2019s referral and is preparing its plea, which it plans to file in early 2026. It cannot yet say when or whether the case will go to trial. <\/p>\n","protected":false},"excerpt":{"rendered":"

A 138-year-old institution that has dominated South Africa\u2019s financial markets, is now facing the possibility of a record-setting penalty.<\/p>\n","protected":false},"author":92,"featured_media":843253,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11121],"tags":[13574,175,853],"class_list":["post-843231","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance","tag-a2x-markets","tag-jse","tag-south-africa"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/843231","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/92"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=843231"}],"version-history":[{"count":1,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/843231\/revisions"}],"predecessor-version":[{"id":843252,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/843231\/revisions\/843252"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/843253"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=843231"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=843231"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=843231"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}