A2X exchange may launch at year-end

SA’s third new stock exchange, A2X Markets, could go live in the fourth quarter of 2017 after the Financial Services Board (FSB) awarded it an exchange licence on Wednesday.

“A2X’s business model has been set up to compete directly with the [JSE] — a long-standing monopoly,” said chairman Ashley Mendelowitz.

A2X applied for its exchange licence in May 2015.

A2X CEO Kevin Brady said the regulatory agency had taken an “incredibly thorough and cautious approach”.

The exchange, which would provide a secondary listings platform for JSE-listed companies, would cut end-to-end transacting costs by about 40% in comparison with JSE costs, he said.

This would make it more affordable for investors and would grow the overall market.

A2X was targeting the 50 to 65 largest and most liquid stocks on the JSE.

All trades executed on A2X would be cleared through its clearing engine, A2X Clear, with settlement taking place via Strate and its participants.

The exchange would use technology supplied by UKbased Aquis Technologies.

“A2X aims to offer a fully functional test environment by July 2017 and to go live in the final quarter of 2017,” it said.

The licence means that Patrice Motsepe’s African Rainbow Capital (ARC) has the option of increasing its 20% stake in A2X to 25%.

ARC co-CEO and former Sanlam CE Johan van Zyl said its “industry relationships” would unlock significant opportunities for A2X.