Breaking of JSE’s monopoly drives progress and reduces costs
Due to local competition the primary bourse has already cut transaction fees
In the past 20 months four new stock exchanges have opened for business. This is a significant development for SA, as for almost 130 years the JSE has been the only player. While still in the early stages, this dilution of the JSE’s status as the sole service provider is a positive move and has been broadly welcomed by the financial industry. Monopolies simply do not have the same incentive to drive progress as companies operating in a competitive environment. There isn’t the necessity to focus on innovation, service excellence and economic efficiencies. It is these drivers in a competitive environment that benefit the end consumer, grow markets and assist in a country’s overall economic growth. The benefits of competition between exchanges are compelling and have been well researched. This is why multiple competitive exchanges are so common internationally. Johan van der Merwe, joint CEO at African Rainbow Capital, captured this in a recent article when he said: “For the country to...
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