New South African stock exchange ZAR X, set to launch on 1 September and begin trading on 1 October this year, has had its conditional approval for a licence suspended, following a successful appeal lodged by the JSE.
Earlier this week, the Financial Services Board (FSB) ruled that the Registrar of Securities Services had infringed the JSE's right to administrative justice by not allowing it to oppose ZAR X obtaining conditional approval. ZAR X applied for a licence in March 2015 and was granted a conditional licence one year later, in March this year. According to reports, the JSE lodged a complaint with the FSB in April.
Geoff Cook, ZAR X director, said in a statement:
"The conditional licence was initially granted by the registrar in keeping with recognised practice adopted by international regulators. From a practical perspective a conditional license is irrelevant to the core process... It is not stipulated as a necessary preliminary step in the Financial Markets Act."
Cook added that ZAR X has complied with all Financial Markets Act requirements and all procedural and operational points subsequently raised by the FSB. "Our application and the operational parameters we laid out follow global best practice and meet every ruling and requirement," he said. "Objections and comments to our application, including those from the JSE, were addressed last year to the satisfaction of the registrar. Based on previous FSB statements, we are confident there is no basis for any valid objection and that a favourable final decision will be given by the registrar shortly, as was always contemplated."
ZAR X maintains that despite this setback, it still aims to be operational by September.
