South Africa best for regulation of exchanges

The latest World Economic Forum (WEF) Competiveness report ranks South Africa 1st out of 139 countries for its regulation of securities exchanges. South Africa moved up from 2nd place, overtaking Sweden for the top position.

“We are very pleased with this achievement, which acknowledges the JSE’s record in terms of regulation and surveillance,” said Russell Loubser, chief executive of the JSE, South Africa’s only securities exchange. “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,” Loubser said in a statement this week.

Financial market development

Released on 9 September, the 2010-2011 WEF Competiveness Report ranks countries according to 12 “pillars” or sets of criteria. The study rates 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 fares well in terms of financial market development criteria, with an overall 9th place ranking.

Within this set of criteria, other rankings that demonstrate efficiency of local financial markets include: financing through the local equity market at 7th; availability of financial services at 7th; soundness of banks at 6th; and legal rights of investors at 6th.

Financial Services Board

The JSE is accountable to the Financial Services Board 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.

“A well-regulated securities exchange is especially important to international investors post the global financial crisis,” the JSE said. “In the midst of the crisis, unlike many exchanges, the JSE did not ban short selling nor introduce circuit breakers.”



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