4AX response to the FSB Appeals Board judgement

4 Africa Exchange today issued the following statement in response to the FSB Appeals Board judgement:

4 Africa Exchange (4AX) is a responsible new entrant into South Africa’s highly respected financial markets and has an interest in keeping our markets stable and prosperous and working with all market infrastructures.

4AX is determined to do what it can and must to promote and protect the core aims and principles of our new Financial Markets Act (FM Act), including to ensure a fair, competitive and well-regulated market where investors, issuers and brokers have wider choices in products and exchange services, without exposing them to unnecessary risk.

This is why, already in July 2015, and as part of a public participation and objection process during ZAR X’s licence application, 4AX alerted the Registrar to serious flaws in ZAR X’s proposed exchange rules, including rules which (if approved) would conflict with the FM Act and pose a serious threat to its core aims. When the Registrar nevertheless approved ZAR X’s exchange rules and granted it a licence in August 2016, it soon became clear that the Registrar had not sufficiently considered 4AX’s objections in granting ZAR X’s licence. 4AX therefore felt compelled to follow its rights as a new stakeholder invested in and partly responsible for our financial markets maintaining their excellent local and international reputation, to challenge the Registrar’s decision on appeal to the FSB Appeal Board.

The JSE brought its own separate appeal against that decision. The FSB Appeal Board decided for reasons of convenience to hear and decide the separate appeals brought by the JSE and 4AX in a single appeal, and last week dismissed both.

Fay Mukaddam, Chief Executive Officer of 4AX says: “We are naturally disappointed in the outcome of the appeal, not least because we feel the nub of our concerns over ZAR X’s exchange rules have not been adequately addressed or resolved, especially the way in which they may potentially expose vulnerable retail investors. The Appeal Board also found it did not have the power to decide some of the procedural challenges raised by 4AX (it found only a review court could do so), yet made observations on the process under the FM Act which in our respectful view overlook the plain words of the FM Act and its all-important core aims.

4AX remains determined however to act as we believe we must do so to protect the integrity and reputation of our financial markets, and are now taking advice on 4AX’s further options, including to apply to review the judgment in the High Court.”



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