JSE (Pty) Ltd v Bond Exchange of South Africa (Pty) Ltd (22/LM/Feb09) [2009] ZACT 52; [2009] 2 CPLR 423 (CT) (6 August 2009)

JSE (Pty) Ltd v Bond Exchange of South Africa (Pty) Ltd (22/LM/Feb09) [2009] ZACT 52; [2009] 2 CPLR 423 (CT) (6 August 2009)

The Tribunal found that the merger would not result in a substantial lessening or prevention of competition in the affected markets. The level of competition between the merging parties was extremely low, as most trading occurred in the OTC market and the JSE's Yield-X platform had negligible market share. The overlap in reporting and exchange-related services was not significant enough to raise competition concerns. Barriers to entry were acknowledged as high, but major market participants possessed countervailing power and could devise alternative trading models if necessary. The JSE's commitments to a price freeze and stakeholder consultation, along with regulatory oversight by the FSB...

Citation
[2009] ZACT 52
Parties
Applicant: JSE (Pty) Ltd; Respondent: Bond Exchange of South Africa (Pty) Ltd
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
6 August 2009
Case Number
22/LM/Feb09
Procedural Posture
Merger Application / Tribunal Approval and Reasons
Outcome
Merger unconditionally approved; no substantial lessening or prevention of competition found.
Judges
Y Carrim, M Mokuena, N Theron
Legal Topics
Merger Control, Market Definition, Barriers to Entry, Countervailing Power, Public Interest, Securities Services Act
Competition Law Commercial and Corporate Merger Control Market Definition Barriers to Entry Countervailing Power Public Interest Securities Services Act

Case Brief

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Parties

JSE (Pty) Ltd

Applicant

Bond Exchange of South Africa (Pty) Ltd

Respondent

Procedural Posture

Merger Application / Tribunal Approval and Reasons

Legal Issues

  1. 1 Whether the proposed merger between JSE Ltd and BESA would substantially lessen or prevent competition in the relevant markets.
  2. 2 Whether the transaction raises any significant public interest concerns.
  3. 3 Whether the commitments and conditions imposed are sufficient to address potential anti-competitive effects.

Ratio Decidendi

The Tribunal found that the merger would not result in a substantial lessening or prevention of competition in the affected markets. The level of competition between the merging parties was extremely low, as most trading occurred in the OTC market and the JSE's Yield-X platform had negligible market share. The overlap in reporting and exchange-related services was not significant enough to raise competition concerns. Barriers to entry were acknowledged as high, but major market participants possessed countervailing power and could devise alternative trading models if necessary. The JSE's commitments to a price freeze and stakeholder consultation, along with regulatory oversight by the FSB...

Court Disposition

Merger unconditionally approved; no substantial lessening or prevention of competition found.

Orders

  • The acquisition by JSE Ltd of Bond Exchange of South Africa Ltd is unconditionally approved.
  • No conditions are imposed on the merger.