The Bond Exchange of South Africa (BESA) became a wholly-owned subsidiary of the Johannesburg Stock Exchange (JSE) on 22 June 2009, the operative date of the scheme of arrangement in terms of which the JSE acquired the entire issued share capital of BESA.
The JSE's intention with the merger is to harness the respective areas of expertise of the two exchanges to deliver increased liquidity, increased functionality and a broader range of products and services to market participants, bond issuers and investors, such as retirement funds, insurance companies and their members.
Attention now turns towards clarifying the strategy of the newly merged interest rate division.
In the immediate term, the JSE will continue to offer the products and services of both BESA and Yield-X (the JSE's interest rate market), utilising the two exchanges' respective systems. Listings requirements, membership requirements and trading, clearing and settlement rules remain unchanged for both BESA and Yield-X users.
All BESA staff have become employees of the JSE and BESA's operations are being moved to the JSE's Sandton premises.
The process of deciding on how to integrate Yield-X and BESA is already underway. Under the leadership of Garth Greubel (former BESA CEO and now Head of the JSE's Interest Rate Division), a team from the combined JSE/BESA has launched a strategic review of the two exchanges' products and services, trading models and technology solutions.
The new interest rate market strategy to grow both spot and derivative interest rate markets is in the process of being developed in consultation with the market, National Treasury, the Financial Services Board and other key stakeholders. The strategy is intended to be finalised during the second half of 2009.