Q: Treasury has identified saving as a priority. Even the NDP recognises that the current level of saving in SA is deficient, often owing to lack of financial literacy and high unemployment. How is the JSE addressing this?
A: As a contributor to SA, the role of the JSE is to not only support economic growth but also encourage South Africans to participate in private sector investment. In a bid to help South Africans adequately prepare for their financial future, the JSE has focused on initiatives such as investor education, the school- and university-based Investment Challenge, and launched its entry-level retail investment product, the tax-free savings account (TFSA). Effective from 1 March 2015, TFSAs were initiated by Treasury to promote a savings culture among South Africans and reduce household indebtedness. The JSE’s TFSA aligns with Treasury’s goal while also ensuring that investors are given access to the exchange in a cost-effective manner. A common barrier to investing is the general lack of financial knowledge about investment on the JSE. Therefore, the JSE’s offering is being rolled out in collaboration with stockbrokers, who guide investors along their savings journey and provide them with information and bespoke financial advice.

Q: The JSE started the Investment Challenge to educate school pupils about investing. How is the exchange developing it for the upcoming generation?
A: The JSE Investment Challenge is one of the largest financial literacy initiatives in the country. This annual competition, which is entering its 43rd year, is open to all SA high school learners, as well as students from universities and independent colleges, with the aim of educating them on the ins and outs of trading on the stock market. Participants are exposed to financial, economic and business concepts that they will be able to use in their field of study and later on in life. The programme also encourages teamwork, planning and keeping up to date with company developments through reading newspapers or researching company websites. The exposure to companies could assist the learners in deciding on future career paths.

Q: How is the JSE making TFSA and general investment information accessible?
A: The JSE has adopted a multi-channel approach – engaging through digital, radio, print and face-to-face. However, our first port of call is our broker community, which has a national footprint and the infrastructure to engage with potential investors online, telephonically or face-to-face. We also use technology to ensure we have continuous engagement. On social media, for example, we are active on LinkedIn, Facebook and Twitter and have thousands of South Africans engaging about investment daily. Our online learning modules also provide a way for the public to learn about investment in their own time, while events such as our monthly Power Hour sessions provide knowledge and insights for advanced investors. Our call centre and website also ensure that we are easily accessible to the public.

‘The role of the JSE is to not only support economic growth but also encourage South Africans to participate in private sector investment’

Q: How is the JSE planning to introduce new products for SA retail investors?
A: Although we introduce investors via TFSAs, this is merely the beginning of the journey. Through our stockbroker community and educational options, investors can gain the confidence to eventually grow their investment portfolio. We offer a range of investment options, for example pure equity or empowerment segment shares (BEE shares).

Q: How is the JSE attracting more local and international investors?
A: We’ve devised several innovations in order to drive investment and listings on the exchange. Some of these include the SA Tomorrow Investor Conference (whereby the JSE collaborates with Treasury, the South African Reserve Bank and listed companies to encourage US investment into SA). We have also introduced REITs (the globally understood REIT structure, which further positions the exchange as a venue for property listings and investment); the new fast-track listing process (which allows international companies that have already been admitted to certain other major stock exchanges for a period of at least 18 months to secondary list on the JSE’s Main Board or AltX); and special purpose acquisition vehicles or SPACS (in other words, a company consisting of a cash shell that is allowed to list on the Main Board or AltX, on the condition that the company buys operating assets within two years).

Q: The JSE brand has established a strong reputation for its commitment to regula-tion. How does the exchange ensure that its investors are protected?
A: Investor protection is of paramount importance and the processes undertaken by the JSE in admitting members and monitoring trading activity on its markets provide the clients of members with specific safeguards. The exchange ensures that members meet the specific conditions of membership and that these are maintained on an ongoing basis, which include the requirements that members be adequately resourced and that their shareholders, directors, senior management and designated officers meet the proper requirements. Investors are provided with the assurance that when they appoint an authorised member of the JSE, they are dealing with an entity that has the resources, skills and systems necessary to provide the services for which they are authorised, and that it will act in the best interests of their clients and uphold the integrity of the financial markets. The JSE consistently monitors and manages trades affected by its members on its markets to ensure that settlement takes place, and that members and clients are aware of their settlement obligations.

By Patrick Farrell
Image: iStockPhoto