- The secondary listing process is a well-established practice both internationally and in South Africa
- The top 10 companies by market cap on the JSE – 7 have a secondary listing on the JSE (also known as a dual listing)
The alternative trading venue model is an internationally accepted model, specifically in the Europe and the USA. According to the OECD Business and Finance Outlook 2016 – Changing Business Models of Stock Exchanges and Stock Market Fragmentation - there are 12 stock exchanges and 44 alternative trading venues in the USA. The report also states that in January 2016 there were 103 regulated exchanges and 151 alternative trading venues in Europe.
There is NO additional regulatory obligations for the company, complying with the primary market obligations will amount to A2X compliance.
- NO impact on the company’s share register
- Corporate actions continue to be handled through the primary market with no action required on A2X
- Continuing obligations on A2X are aligned with the primary market
- No additional work for advisers therefore no cost implications
- Minor impact on sponsor in that they will be required to send company announcements to both the primary and secondary markets therefore no increased cost expected
International research is compelling – competition leads to improved liquidity, market quality and improved price formulation.
A2X undertakes international best practice cross market surveillance – first in South Africa – surveillance system provided by its technology partner, Aquis Exchange operates and provides cross market surveillance across 14 European markets.
- Settlement remains through Strate and the CSDPs with the same settlement cycle and settlement processes – tried and tested process in South Africa
- Strate and CSDPs understand the implications of cross market settlements and their systems can accommodate this
A2X is offering a reduction in trading fees in the region of 40%
- International research and experience is compelling. Competition has been shown to lead to the reduction in both direct and indirect costs for participants
- The cost of connecting to two venues is for the brokers account and will be more than off-set against the fee reductions realised across two venues operating in a competitive environment
International research is compelling – competition leads to improved liquidity, market quality and improved price formulation which is beneficial to all shareholders