Q & A with the JSE
Russell Loubser – CEO of the JSE – concluding his road show in Johannesburg, and speaking to a large gathering, said that like any other business they face similar challenges.
“If you don’t become relevant then you will disappear. We want to keep the securities and markets in South Africa,” says Loubser.
"Some markets in the country’s instruments could be managed in another country. It’s happening internationally, and technology is the main reason.”
In terms of the current focus, Loubser says that the JSE has been focusing on costs and looking very carefully at these.
Turning the actual markets, he broke up the JSE into four categories, including equities, financial derivatives; agricultural products; and AltX.
AltX
AltX now has five companies listed, coming off a slow start in October, and he confidently predicts that this could climb to between 20 and 25 companies. On the future of the VCM and DCM markets, Loubser says that the VCM and DCM won’t be closing.
“There hasn’t been sufficient agreement on the matter, and these two markets will stay open. I’m disappointed that this is the decision has been reached.”
New initiative
The interest rate exchange is a new initiative, because there is not proper price discovery in the underlying markets. They have been asked to look at this option. They are in discussion with several government departments.
Loubser explained that the proposed interest rate exchange will be a separate one, with its own membership and stringent rules.
There will be an outlay of R5m to R6m to get this initiative off the ground, and because of the sound technology platform, this could be in place before the end of the year.
IT – project Orion
A portion of the reserves that the JSE has built up over the last couple of years, amounting to R170m rand, will be spent on upgrading the IT systems within the next 20 months – under project Orion.
They will be migrating 42 systems onto 16 systems and Loubser says that there are huge legacy systems in place, which among other aspects house the BDA system which all brokerages use, that allows the JSE surveillance team to drill down to individual client level.
“Some of these systems are just old, and expensive to operate and generally inefficient, such as in the agricultural derivatives market.”
Quote of the day: “Technology is the solution. The problem is the human mindset and obstenance.” Russell Loubser on the introduction of a Pan African Exchange.
