SAFEX Agricultural Products Division,
JSE Limited
(South Africa)

South Africa

Contracts: 

The JSE Limited trades equity products, financial derivatives, agricultural derivatives and interest rate products all on electronic platforms. For detailed contract specifications visit www.jse.co.za

ACCESS TO FUTURES MARKETS: The exchange has different membership criteria for the different trading divisions. All trading clients are required to register with a broking member of the relevant division to access the market. Although registered dealers of the member firm enter most client orders, more and more clients have direct market access via software provided by their member firms. This has improved access for clients as they can execute trades directly onto the market. The member firm continues to guarantee their business and is responsible for setting trading limits for this type of activity.

Currently all members connect directly to the exchange via private leased lines, however the exchange is in the process of offering a managed network solution to members whereby a third party service provider could facilitate their point to point connectivity to the exchange using shared infrastructure.

The exchange has both local and foreign clients participating, both categories of clients have the same access to the market with the only additional requirement for foreign clients is a non-resident bank account with a local institution in order to comply with South African Exchange Control regulation. There is no restriction for the flow of funds for foreign clients.

INITIAL MARGIN: for the latest margin requirements see the link

http://www.safex.co.za/ap/products_english.asp  

MARGIN FUNDING: The exchange is not involved in funding any of the margins required, this is usually done by the various clearing members and in some cases the member firm themselves. The exchange does collect and invest all initial margin required for open positions with A1 rated South African banks. Interest is paid to all clients on a monthly basis.

NEWS:

The Agricultural and Financial Derivative Divisions of the JSE are both in the process of replacing the trading and clearing solutions. The software, supplied by a South African company, includes the latest technologies and aims to further enhance the order capacity to accommodate algorithmic trading. The physical delivery process on the Agricultural market has been further automated by including real time confirmation of the warehouse receipt information used for tendering the delivery notice. All invoices specific to the delivery process will also be made available via the trading system for members to download for further downstream processing.

New trading records were achieved in 2007 for the Agricultural Products Division, the total number of contracts traded, both futures and options, were over 2,4 million. This is an increase of 24% from the previous calendar year whilst the new record represents an increase of 4.4% from the previous record year in 2003.

The Division continues to serve the Southern African grain market with a liquid price risk management facility that is guaranteed by various clearing banks.