The Bond Exchange of South Africa (BESA) was a South African
bond exchange based in Johannesburg.
It was acquired by the
JSE Limited
JSE Limited (previously the JSE Securities Exchange and the Johannesburg Stock Exchange) is the largest stock exchange in Africa. It is located in Sandton, Johannesburg, South Africa, after it moved from downtown Johannesburg in 2000. In 200 ...
in 2009, and rebranded as the JSE Debt Market.
The entity, now through the JSE Limited, operates and regulates the debt
securities
A security is a tradable financial asset. The term commonly refers to any form of financial instrument, but its legal definition varies by jurisdiction. In some countries and languages people commonly use the term "security" to refer to any for ...
and
interest rate
An interest rate is the amount of interest due per period, as a proportion of the amount lent, deposited, or borrowed (called the principal sum). The total interest on an amount lent or borrowed depends on the principal sum, the interest rate, th ...
derivatives
The derivative of a function is the rate of change of the function's output relative to its input value.
Derivative may also refer to:
In mathematics and economics
* Brzozowski derivative in the theory of formal languages
* Formal derivative, an ...
markets in South Africa.
Prior to its acquisition it was constituted as a public company.
History
BESA was granted its exchange license in 1996 and over the next twelve years was responsible for the development of the bond market in South Africa. As an exchange, BESA was in the business of providing a range of platforms and services to address the needs of capital market participants, be it issuers,
market maker
A market maker or liquidity provider is a company or an individual that quotes both a buy and a sell price in a tradable asset held in inventory, hoping to make a profit on the ''bid–ask spread'', or ''turn.'' The benefit to the firm is that it ...
s, traders or investors.
In December 2007, BESA converting from a mutual association to a public company. This was followed by a rights issue which was concluded in October 2008, injecting fresh capital into the business and introducing new strategic partners to the exchange. With demutualisation and capitalisation achieved, BESA focused attention on furthering capital market infrastructure in South Africa through the introduction of projects such as;
* BondClear Limited - a
clearing solution developed in partnership with
Nasdaq, Inc.
* Justrade.com - South Africa’s first online
binary option
A binary option is a financial exotic option in which the payoff is either some fixed monetary amount or nothing at all.Breeden, D. T., & Litzenberger, R. H. (1978). "Prices of state-contingent claims implicit in option prices". ''Journal of Busin ...
s exchange
By 2008 the South African bond market was a leader among
emerging-market economies. Turnover reported on BESA in 2008 reached R19.2 trillion. Given listed debt securities of R825 billion nominal. However the local bond market was still dominated by securities issued by the
South African government
The Republic of South Africa is a parliamentary republic with three-tier system of government and an independent judiciary, operating in a parliamentary system. Legislative authority is held by the Parliament of South Africa.
Executive authority ...
, with local government, public enterprises and major corporations accounting for the rest of the debt issuers active in the market. The number of borrowers and listed bonds as well as the market capitalisation had all risen sharply, at December 2008 BESA had listed some 1,102 debt securities, issued by 100 sovereign and corporate borrowers, with a total market cap of R935 billion.
In 2009 the Johannesburg Stock Exchange acquired the BESA for R240 million and rebranded as the JSE Debt Market.
Rules and protections
As the direct regulator of the bond market, BESA operated within the framework of the Securities Services Act 2004 of South Africa and a set of rules and directives approved by the
Financial Services Board (FSB). BESA's rules and directives served as a tool for regulating both issuers and trading participants. Extensive rules also applied to trading participants, with BESA undertaking active surveillance over all aspects of market activity as well as requiring compliance with a variety of best-practice standards.
See also
*
Bond market
The bond market (also debt market or credit market) is a financial market where participants can issue new debt, known as the primary market, or buy and sell debt securities, known as the secondary market. This is usually in the form of bonds, b ...
*
The South African Futures Exchange
The South African Futures Exchange (Safex) is the futures exchange subsidiary of JSE Limited, the Johannesburg-based exchange. It consists of two divisions; a financial markets division for trading of equity derivatives and an agricultural marke ...
*
South African Institute of Financial Markets
The following is a list of securities examinations and the organizations that offer them.
Africa
*The Securities Industry Training Institute East Africa (SITI) was conceptualized in 2008 to standardize and administer market education for the Eas ...
References
{{Reflist
Economy of Johannesburg
Financial services companies of South Africa
Fixed income
Companies based in Johannesburg