“South Africa is best regulated securities exchanges in the world” WEF Competiveness Report

South Africa is ranked 1st out of 139 countries for its regulation of securities exchanges, according to the latest World Economic Forum (www.weforum.org) Competiveness Report 2010-2011. Previously South Africa was 2nd but it has overtaken Sweden for the top position.
Russell Loubser, CEO of the Johannesburg Stock Exchange (JSE Ltd, www.jse.co.za), South Africa’s only securities exchange, commented in a press release: “We are very pleased with this achievement, which acknowledges the JSE’s record in terms of regulation and surveillance. This ranking also sends a very good message about investing in South Africa. It is a testament to the effective working relationship between the JSE and the Financial Services Board (FSB).”
A well-regulated securities exchange is especially important to international investors after the global financial crisis. Unlike many exchanges, the JSE did not ban short selling nor introduce circuit breakers during the crisis. The JSE is accountable to the FSB for the regulation of its markets, market integrity and investor protection. The two organisations work closely together on matters that could undermine investor confidence in South Africa.
The WEF Competiveness Report 2010-2011 was released on 9 September and ranks countries according to 12 pillars or sets of criteria, rating a country’s competiveness according to quality of infrastructure and institutions, efficiency, market sophistication as well as capacity for innovation. Regulation of securities exchanges falls under the 8th pillar, financial market development.
South Africa has an overall 9th place ranking worldwide in terms of financial market development. This set of criteria includes other rankings that show the efficiency of local financial markets: financing through the local equity market – 7th; availability of financial services – 7th; soundness of banks – 6th; and legal rights of investors – 6th.
JSE Limited is South Africa’s only full-service securities exchange. It connects buyers and sellers in 4 different financial markets: equities, equity derivatives, commodity derivatives and interest-rate products. It offers the investor a first-world trading environment, with world-class technology, surveillance and settlement in an emerging market context. It is amongst the top 20 largest equities exchanges in terms of market capitalisation in the world.

2 Responses to ““South Africa is best regulated securities exchanges in the world” WEF Competiveness Report”

  1. rob

    This is great news. Pity that the rest of the regulation in the majority of Africa’s markets is in a shoddy state. Image if there had been realistic tie ups between the JSE and other exchanges through ASEA 15 years ago as was envisaged then. Instead we have the Nigerian crisis, Kenyan shareholder suffrage in crisis and laissez faire regulation in most other marginal markets.

  2. Tom Minney

    There could have been more opportunities for raising capital for growth and economic development had the continent’s capital markets shown more liquidity and efficiency in the last 15 years. And much of the growth could have been funded through local institutions, instead of giving away the benefits. It would be great if the policy makers and political leaders, as well as the managers of the national securities markets, use the coming months to come up with some solutions to start building bigger, more interconnected and better markets. The investor interest seems huge and sustained, and Africa surely knows markets, so the momentum could be good.