By Nomvelo Chalumbira and Tiisetso Motsoeneng
JOHANNESBURG (Reuters) - Africa's biggest securities exchange, the JSE Ltd (J:JSEJ), is crafting tighter disclosure rules for companies with listed debt instruments, combined with a greater focus on corporate governance to increase transparency.
South African state-owned companies, which are some of the biggest debt issuers, are overhauling their corporate governance after some were caught up in a recent influence-peddling scandal that rocked business and politics in Africa's biggest economy.
"Commentators are often are critical why exchanges don't catch or stop a fraud etc ... what they (regulators) do is they require disclosures so people are informed before they make a decision to invest," JSE Chief Executive Nicky Newton-King said in an interview with Reuters.
"That's why we are looking at disclosures for non-listed companies with debt securities as a means for investors, the media and interested shareholders to ask difficult questions."
The new regulations, which are expected to be finalised by the end of the year, would have a strong focus on corporate governance, Andre Visser, head of regulation at JSE, added.
"If you make an appointment to board of a company with debt instrument on the JSE, there's no specific requirement to disclose that. You will see a lot more disclosures coming up from companies with debt instruments," Visser said.
South African state-owned companies, such as power utility Eskom and trains operator Transnet, are some of the country's biggest issuers of debt.
TRANSFORMATION
At the helm since 2012, Newton-King was an instrumental figure in the transformation of the stock exchange in the early 2000s with the acquisitions of the derivatives market SAFEX and debt exchange Bond Exchange of South Africa.
She joined JSE in 1996 from a law firm and wants to make Africa's oldest stock exchange the best in emerging markets.
"We're on a very clear path to become the best global platform in emerging markets," she said. "When you talk about emerging markets' financial markets, you will say, jeez the best one is the JSE," she said.
The JSE is already the top-20 capital market in the world with more than 160 companies listed on the its main JSE All-share index. It has a market capitalisation of 11.7 trillion rand ($930 billion).
The bourse has been cutting transaction prices in a bid to compete with the London Stock Exchange and the Australian Stock Exchange abroad and with newer entrants at home such as ZAR X and Equity Express Securities Exchange, Newton-King said.
It has cut prices by at least 20 percent over the last years and expects more in equity market transactions in the coming months.
"The competitive landscape, the sweet spot in which a competitor can get to us is much smaller than it was three years ago," she said "We are a different shop today, far more client focused, making strides in pricing far faster than we used to."
($1 = 12.5800 rand)
(This version of the story refiles to fix typo in paragraph 8.)