Market Structure

4AX has set up a market infrastructure to not only meet the requirements of the Financial Markets Act (FMA), but to also address the needs of its targeted issuers, investors and brokers. Investors need to transact with 4AX through various brokers (i.e. authorised users) of 4AX. Each authorised user is regulated by the Financial Services Board in terms of the FMA and 4AX in terms of the 4AX Exchange Rules.

All issuers seeking to list their securities on 4AX must apply for listing to the 4AX Issuer Regulation Committee and adhere to the 4AX Listing Requirements. The 4AX Listing Requirements can be found here.

All authorised users seeking admission to act as authorised users of 4AX must apply for admission to the 4AX Compliance Committee and adhere to the 4AX Exchange Rules, Exchange Procedures and Exchange Directives. The 4AX Exchange Rules and Procedures can be found at here.

The Compliance Committee and Issuer Regulation Committee of 4AX consists of a majority of independent members. The Issuer Regulation Committee has the ultimate responsibility to regulate issuers of 4AX in terms of the 4AX Listing Requirements and the Compliance Committee has the ultimate responsibility to regulate the authorised users of 4AX in terms of the 4AX Exchange Rules.

The 4AX exchange infrastructure is unique in South Africa (based on international best practice) as it operates using a central independent register of beneficial ownership (housed within 4AX Registry). This allows for significant benefits to issuers, investors and authorized users including:

  • The removal of minimum fees when trading
  • Real-time dissemination of relevant market information to retail shareholders
  • Real-time market surveillance and
  • Facilitates improve restricted share trading liquidity, market trust and integrity for restricted share trading (e.g. BEE schemes or bona fide farmer shares)

The 4AX Registry achieves this through amongst others:

  • The registry acting as a single and/or central verification platform to perform verification and/or validation of restrictions for restricted share trading within a regulated environment
  • Promotion of independent and transparent verification at a consistent standard and
  • A single place of verification i.e. once verified as “black” a participant can trade in all BEE restricted shares as well as the entire market (this is significantly different to the 4AX competitor models where trading in each restricted share will require a separate verification, broker and FICA process

4 Africa Exchange Process Flow