JSE Briefing

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JSE Briefing

• 1 August 2001

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The JSE Team

• Leanne Parsons
• Ana Forssman
• Sandra Borrageiro
• Philippa Stratten

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Agenda
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Agenda (continued)
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Global Trends and Challenges
The JSE investigated global trends in financial
markets to gain insight into its future
direction. There are a few key characteristics
that are shaping the future
Alliances and partnerships facilitate economies
of scale and provide for a single point of access
to larger pools of liquidity
Demutualisation will result in exchanges no
longer being owned by their members and allows
them to run as independent organisations
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JSE Vision
To be recognised for providing world-class
primary markets, secondary markets and services
facilitated by strategic affiliations while
providing a gateway integrating Southern Africa
into the global financial markets
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Summary of Proposed JSE Trading Model

• Separate trading segments with individual
  trading rules and characteristics
• Continuous order-driven Trading with use of
  Opening and Closing Auctions
• Enhanced price discovery rules, including
  Maximum Execution Volume as well as Minimum
  Surplus and Market Pressure
• Closing Prices determined in a Closing Auction
• Use of VWAP for Closing Price when no trades are
  executed in Closing Auction, if no VWAP then last
  traded price
• Possible support for quote-driven practices and
  Market Makers (types of securities still to be
  determined) although this will only be
  introduced in a later release

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Summary of Proposed JSE Trading Model

• Support for Intraday Auctions, if required, for
  more illiquid stocks.
• Round lot of one (no odd lot specialist or odd
  lot order book)
• Anonymous order book (Pre-and Post-trade
  Anonymity)
• Full market depth with end-user configuration
• Trade in ZAR with future support for multiple
  currency
• Trading Hours
• short-term 9 to 5 pm (with run-off from 5 6
  pm)
• long-term investigate impact of later hours
• Removal of Special Terms

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Summary of Trading Model

• Removal of matching restrictions in the trading
  system e.g. Interested Party, Foreign Flag trades
  etc., the regulation of which will still be
  monitored by Surveillance.
• Improved market integrity controls i.e.
  introduction of acceptable volatility (floor /
  ceiling) limits - based on a dynamic reference
  price - that allow for the use of volatility
  auctions upon violation of these limits.
• Delayed dissemination of trades above a certain
  market size where there is risk capital involved
  e.g. Block Trades this is still to be finalised
  in the Design Phase.