If you’ve spent any time in global markets commentary lately, you’ll have noticed a familiar complaint: trading venues are multiplying, brokers have to connect to more and more of them, and data costs keep climbing. “Fragmentation” has become shorthand for everything wrong with modern market structure.

It’s a fair concern in markets where dozens of venues are competing for the same slice of liquidity. But in South Africa, that’s not actually our problem. Our problem has been the opposite one: too little competition, for too long.

One Exchange, Setting Its Own Rules

For decades, the JSE was the only real option for trading South African equities. That’s not a knock on the JSE’s track record, it’s simply a description of market structure. When one exchange controls the venue, it also effectively controls the cost of access, the trading rules, and the pace of innovation. There’s no competitive pressure forcing prices down or service up, because there’s nowhere else to go.

That’s the backdrop to the Competition Commission’s decision to refer the JSE to the Competition Tribunal, following a complaint A2X first lodged back in 2022. The Commission is seeking changes to JSE trading rules around its broker-dealer accounting system and matched principal trade type, along with a possible penalty. The case is still working its way through the Tribunal, but the underlying message is already clear: dominant exchanges don’t automatically behave like competitive ones, and South Africa’s regulators are taking that seriously.

A Second Venue Isn’t Fragmentation. It’s a Check.

When A2X launched in 2017, the goal wasn’t to add noise to the market, it was to give South Africa something it had never really had: a second, credible venue where the same shares could trade, at meaningfully lower cost. Today A2X carries secondary listings for the vast majority of the JSE’s largest companies, and the savings show up in a very concrete place, retirement funds. A2X’s model has typically delivered transaction cost savings north of 40%, and those savings flow straight through to pension funds, asset managers, and ultimately the retirement savings of millions of ordinary South Africans.

That’s the part the “fragmentation is bad” narrative misses when applied uncritically to a market like ours. In London or New York, adding a twentieth trading venue with half a percent of volume probably does add more cost than benefit. Adding a second exchange to a market that’s only ever had one is a different proposition entirely, it’s introducing the competitive pressure that was missing in the first place.

Built for Today’s Infrastructure, Not Yesterday’s

There’s a second advantage that comes with being the newer venue: A2X wasn’t built by retrofitting decades-old systems. As exchanges worldwide modernise, faster settlement cycles, smarter surveillance, and the early infrastructure for tokenised securities, newer, leaner platforms are generally better placed to move quickly. A2X gets to build for where market infrastructure is heading, rather than carrying the weight of where it’s been.

The Real Question for South African Markets

The question worth asking isn’t “do we need more venues?” It’s “does the market currently have enough competitive pressure to keep costs down and service quality up?” For most of the JSE’s history, the honest answer was no. A2X exists to change that answer, and the regulatory findings so far suggest the market agrees.

Competition in capital markets isn’t a threat to stability. It’s usually what keeps the dominant player honest. That’s not fragmentation. That’s just a market finally getting a second opinion.