The South African Futures Exchange - AbsoluteAstronomy.com

The South African Futures Exchange (Safex) consists of a financial markets division (equity derivatives) and an Agricultural Markets Division (AMD) - agricultural derivatives.

The measures of the financial markets division have grown from R3.4 million at its formation in 1990 to R69 million at June 1997. Safex experienced a growth of 10.36 million contracts during the 1996/97 financial year, a year-on-year increase of 35 percent.

AMD was formed in 1995 and by 30 June 1997, the net reserves amounted to R3.2 million compared with the original operating forecast of R1.4 million.

Safex has kept abreast of developments in the world financial markets, and continues to make steady progress despite intensifying competition from international derivative exchanges and over-the-counter alternatives. The Safex reserves have grown sufficiently to allow a significant reduction in the fees it levies per future or options contract. Consequently, all fees were reduced by 50 per cent in 1997 and the changes on allocated trades were removed.

The Exchange is directed by an executive committee consisting of up to 11 elected members all with full voting rights, and an additional non-voting nominated people that the executive appoints. Policy decisions are made by the committee and carried out by a full-time management team headed by the CEO.

The Exchange is governed by members, but through their use of the exchange services, they are also its clients. The exchange is a Self Regulatory Authority and exercises its regulatory functions in terms of the Financial Markets Control Act, 1989 and its rules. The Exchange, in turn, is supervised by FSB

Financial Services Board (South Africa)

The Financial Services Board is the government of South Africa financial regulatory agency responsible for the non-banking financial services industry in South Africa. It is an independent body that supervises and regulates the financial services industry in the public interest...

Historical Development

Date	Event
May 2001	Safex and JSE members agree to buyout of Safex by JSE Securities Exchange. Effective date of transaction to be 1 July 2001. The JSE agrees to retain the Safex branding and creates two divisions - Safex Financial Derivatives and Safex Agricultural Derivatives.
August 2000	Individual Equities contract listed has increased to 49.
July 2000	New Government Bond Index launched (GOVI).
February 1999	The Individual Equity Options are replaced with twelve Individual Equity Futures and Options on the futures. Twelve IEF's listed.
March 1998	Options introduced on agricultural products.
September 1997	Individual equity options introduced on the six largest equity counters.
January 1997	Open interest exceeds 1 million contracts.
May 1996	Introduction of fully automated trading through a specifically designed system that was written in South Africa.
January 1995	Safex Agricultural Derivatives Division opened.
December 1993	Volumes exceed 1 million per month for the first time. Open interest is over 500,000 contracts.
January 1993	Monthly volumes exceed 200,000. Open interest exceeds 100,000 contracts.
October 1992	Options-on-futures launched together with a world- class, portfolio-scanning- type margining system.
June 1992	Monthly volumes start consistently exceeding 100,000 contracts.
October 1991	Permission received from the South African Reserve Bank for non-residents to participate on Safex via the Financial Rand Financial rand The South African financial rand system was abolished with effect from 13 March 1995. The financial rand system was instituted on 1 September 1985 in an attempt to control the large outflows of capital from South Africa at that time. These outflows were largely the result of economic sanctions in... system.
August 1990	Enabling legislation (the Financial Markets Control Act, 1990) is enacted and Safex is officially licensed as a derivatives exchange. Officially opened on 10 August 1990 by the Minister of Finance. Monthly volumes are approximately 60,000 contracts, with 10,000 open interest.
April 1990	Safcom takes over operation of the informal futures market from RMB. Futures contracts are available on equity indices, long bonds and money market products.
September 1988	Twenty-one banks and financial institutions meet and establish the South African Futures Exchange (Safex) and the Safex Clearing Company (Safcom).
April 1987	Rand Merchant Bank Limited (RMB) start 5 trading "futures" contracts on various equity indices and long bonds. RMB is the exchange, clearing house and only market maker.

Historical Development

See also

Safex Options