JSE under fire

The Competition Commission has referred the JSE to the Competition Tribunal for prosecution due to allegations of “exclusionary conduct” with anti-competitive effects.

On Monday, 10 November, the JSE said it is preparing its plea to the commission’s referral, which is expected to be filed in early 2026.

The referral arises from a complaint that A2X Markets submitted to the commission in October 2022, alleging that the JSE is abusing its dominant market position.

A2X was founded in 2017 by CEO Kevin Brady, Sean Melnick, and Ashley Mendelowitz to create a new South African exchange to compete with the incumbent JSE.

The alternative exchange has about 175 securities and a combined market cap of around R10 trillion. Some of its listings include Pepkor, Absa, Discovery, Investec and Sasol.

A2X alleged to the Competition Commission that the JSE had been engaging in exclusionary conduct concerning the JSE’s broker-dealer accounting (BDA) system and matched principal (MP) trade type. 

In essence, A2X accused the JSE of restricting a new entrant and competitor (A2X) from growing and competing effectively in the secondary equity trading market, amounting to anti-competitive conduct.

Specifically, the JSE is accused of contravening section 8(c) and 8(1)(c) of the Competition Act from at least 2017.

Section 8 of the Competition Act prohibits the abuse of a dominant market position by, for example, charging excessive prices or refusing to grant a competitor access to an essential facility.

In its referral affidavit, the Competition Commission requested that the tribunal interdict and restrain the JSE from engaging in this conduct.

The commission also asked for further remedial steps to be taken by the exchange, including amending some of the JSE’s rules, 

In addition, the commission recommended imposing an administrative penalty against the JSE of up to 10% of the exchange’s annual turnover in South Africa.

In a statement released on 10 November, the JSE said it has cooperated fully with the commission throughout its investigation. 

“The JSE denies these allegations in the strongest possible terms and has been advised by external legal counsel that the commission’s claims are without merit,” it said.

“Given the nature of these proceedings, the JSE cannot determine if or when the matter will proceed to trial.”

A2X said in a statement on 10 November that it welcomes the Competition Commission’s decision to recommend that allegations of anti-competitive behaviour by the JSE be referred to the Competition Tribunal.

“For more than a century, South Africa’s equity market has been dominated by a single player,” A2X CEO and founder Kevin Brady said.

“The numbers reveal the consequences, which include fewer listings, stagnant liquidity, and rising costs that deter both issuers and investors.”

“We believe this referral validates what we have been saying – that South Africa’s financial markets have been held back by the JSE’s anti-competitive practices that ultimately harm investors, listed companies and competitor exchanges.”

“Our market must embrace competition to create the dynamic capital market that South Africa needs.”

Brady claimed that A2X has seen several tactics by the JSE, including their arguments that competition introduces systemic risk and that new players are inadequately regulated.

“These arguments ring hollow when viewed against international experience and A2X’s eight-year track record,” he said.

“We are hopeful that with new leadership at the JSE, there will be a shared commitment to growing South Africa’s capital markets.”

JSE CEO Leila Fourie is set to step down from the top job in March 2026, and will be succeeded by the exchange’s current director of capital markets, Valdene Reddy.

“The Competition Commission has rightly identified that market growth requires fair competition – something that benefits all investors, listed companies, and ultimately the broader South African economy,” Brady said.