Treasury, JSE launch first electronic bond trading platform

NATIONAL Treasury and the JSE have launched the country’s first electronic government bond trading platform.

Three of the major banks signed up as primary dealers on the new platform.

Standard Bank, Nedbank and Absa joined Citibank, Deutsche Bank, HSBC, Investec, JP Morgan and RMB as liquidity providers for the new platform.

The JSE in partnership with Treasury and a multi-stakeholder group consisting of Strate, the Financial Sector Conduct Authority yesterday officially launched the electronic-trading platform (ETP) for government bonds.

Donna Nemer, a director of capital markets at the JSE, said the launch positioned capital market infrastructure among the most sophisticated globally.

“A more sophisticated market infrastructure benefits issuers, investors and further positions South Africa as an attractive investment destination,” Nemer said.

“The launch of the Bond ETP was also an important element of South Africa’s commitment to capital markets reform at the G20 group of nations.”

The government entities issue bonds and lists them on the JSE to raise funds for large infrastructure projects, such as power stations, roads and hospitals.

Investors lend money to these entities by purchasing the bonds.

The exchange said the ETP would provide transparency, price discovery and settlement assurance to allow issuers to transact anonymously both pre-trade and post-trade.

In 2012, National Treasury formed an industry-wide committee called the bond market development committee, whose mandate was to consider developmental issues facing the country’s bond market.