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PORTFOLIO COMMITTEE ON FINANCE
4 February 1999
FINANCIAL MARKETS CONTROL AMENDMENT DRAFT BILL: BRIEFING
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This meeting was an opportunity for two representatives from JSE and FSB to explain why the Financial Markets Control Amendment Bill [B-99] should be passed. Emphasis was placed by the speakers on the need to make the South African markets competitive on an international scale and how this Bill can aid in such a goal.
Mr SJ Leeuw (acting chairperson; ANC) introduced Ms N Newton King, legal advisor to the Johannesburg Stock Exchange, and Mr G Clark of the Financial Services Board. These two speakers presented arguments as to why the Financial Markets Control Amendment Bill [B-99] should be passed.
Ms Newton King explained that in order for South Africa to compete on an international level, local markets must use state of the art market techniques. The goal of mergers today is to provide a competitive exchange for the country.
The medium term goal is to achieve a single access for all traders in all markets. This would be wholly facilitated by technology, using a single screen for all transactions. Ms Newton King said that the financial motto would be, "One country, one market. One market, one screen." Colloquially, this is referred to as a "one/one" market. Such a scheme eliminates numerous hurdles and makes South African markets attractive world-wide.
Mr Leeuw emphasized that the Bill is still in a raw form and the future of its specific contents is uncertain. Mr Clark added that the establishment of any super exchange should not exclude any party affected by this Bill.
Mr Feinstein (ANC) asked that in global merging markets, is there any relevant experience available to provide a history or background of similar market techniques to the Committee. Ms Newton King responded that off the top of her head she could not think of any identical Bills in other countries but that strong alliances in Latin America markets and the Madrid Stock Exchange use similar techniques.
Mr Feinstein also asked how effective surveillance techniques have been for emerging markets. Ms Newton King responded that there are three different surveillance departments each monitoring their respective market sections. The hope is that a high-tech computer program can be designed that will be able to monitor the market from a cross-market perspective, rather than separately at each market section.
Mr Feinstein further asked about the timing for the amalgamation of the JSE. Ms Newton King responded that the timing is vital and a merger should hopefully occur sometime this year.
In closing Mr Leeuw emphasized that the Committee did not want to commit to any particulars at this time regarding the Bill. He then closed the meeting by thanking the two speakers for their comments.
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