The Bond Exchange of South Africa Limited (BESA) is an independent, licensed exchange, constituted as a public company, and responsible for operating and regulating the debt securities and interest rate derivatives markets in South Africa.
History
BESA was granted its exchange licence in 1996.
In 2007 the BESA partnered with the OECD in workshops on African Debt Management. In December 2007 BESA converted from a mutual association to a public company. As a demutualised exchange, BESA is able to raise capital to grow its business, diversify revenues and accelerate the development of financial market infrastructure in South Africa.
Rules and protections
As the direct regulator of the bond market, BESA operates within the framework of the Securities Services Act 2004 and a set of rules and directives approved by the Financial Services Board (FSB). BESA's rules and directives serve as a tool for regulating both issuers and trading participants. All securities listed by the Exchange must meet minimum disclosure standards.
Extensive rules also apply 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. The Exchange provides various investor-protection mechanisms, including a guarantee fund to compensate counter-parties for any market movement losses arising from a trading default. No participant defaults or claims on the fund have ever been lodged with BESA.
As the direct regulator of the bond market, BESA operates within the framework of the Securities Services Act 2004 and a set of rules and directives approved by the Financial Services Board (FSB). BESA's rules and directives serve as a tool for regulating both issuers and trading participants. All securities listed by the Exchange must meet minimum disclosure standards.
Extensive rules also apply 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. The Exchange provides various investor-protection mechanisms, including a guarantee fund to compensate counter-parties for any market movement losses arising from a trading default. No participant defaults or claims on the fund have ever been lodged with BESA.
Turnover
The South African bond market is a leader among emerging-market economies. Turnover reported on BESA in 2007 reached a record R13.8 trillion[citation needed]. Given a nominal value for listed debt securities of R781 billion, and a locally-settled total turnover of R18.6 trillion, overall market velocity in 2007 grew to 23.8 times from 20.4 times the previous year.
The South African bond market is a leader among emerging-market economies. Turnover reported on BESA in 2007 reached a record R13.8 trillion[citation needed]. Given a nominal value for listed debt securities of R781 billion, and a locally-settled total turnover of R18.6 trillion, overall market velocity in 2007 grew to 23.8 times from 20.4 times the previous year.
South Africa’s local bond market is still dominated by securities issued by the South African government, 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 have all risen sharply – at December 2007 BESA had listed some 967 debt securities, issued by 104 sovereign and corporate borrowers, with a total market capitalisation of R862 billion
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