The job of the Johannesburg Stock Exchange

Fsp Invest, 05 Feb. 2014

Tags: johannesburg stock exchange, jse, function of the jse, what the jse does, stock market, stock exchange, market place, trading, investors, investing, trading times, auctions, what happens on the jse, functions,

The Johannesburg Stock Exchange (JSE) is the stock market in South Africa where all listed companies’ shares trade. But have you given much thought to its role and what it actually does? And, of course, the JSE is just one of the many stock markets dotted around the world, which perform similar tasks. Let’s take a closer look at the day-to-day running of the JSE…

Apart from public holidays, the Johannesburg Stock Exchange (JSE) is open for trading, Gareth Stokes in Fear, Greed and the Stock Market explains…

But what exactly happens on the exchange?

The JSE, like other stock exchanges, is similar to a fresh produce market. It opens. It then allows you a certain amount of time to barter for your goods and agree prices with the store owners. And then it closes.

When the market closes, the JSE has to ensure you receive all the goods you bought. And it must ensure you pay the merchants who sold you the goods.

To help the JSE run on a daily basis it runs an automated trading system. This is JSE SETS (Sequence Equities Trading System). This system is an order-driven, central order book trading system that provides opening, closing and intraday auctions.

The JSE opens for trading at 9am and closes at 5pm. But there are auctions that occur before opening and closing. Have a look at the diagram below which illustrates this…

The 6 functions of the JSE

So to facilitate trading, the JSE has six primary functions:
  • The JSE must allow for the entry or orders into the order book and the display of these books either as agents (order-driven) or market makers (quote-driven).
  • The JSE must hold a market opening period and a closing call period.
  • On a daily basis, the JSE must allow for an automated trading period. This is the continuous trading period.
  • If necessary, the JSE must allow an intraday call period or volatility auction period.
  • If necessary, the JSE must provide a closing auction period to work out the closing price of shares.
  • And, if necessary, the JSE must allow an after-hours trading period for the tying up of loose ends.
So there you have it, the job of the JSE.

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