Johannesburg Stock Exchange
The Johannesburg Stock Exchange (JSE) offers hidden order functionality to provide investors with pre-trade anonymity within the JSE equity market central order book.
Functionality and order Types
JSE”s hidden order functionality makes use of hidden limit orders where a limit price is set on a hidden order entered. The JSE has a price-visibility-time priority policy, i.e. the best price will always take preference, followed by visibility and then time priority. Hidden limit orders are subject to minimum order size requirements.
Access and participation
Any member of the JSE equity market has access to the hidden order functionality through their current membership.
Instruments that can be traded through the use of hidden order functionality mostly include JSE main board and alt-X (small to medium-sized instruments), ordinary shares and preference shares and exchange traded funds. Average trade size recorded over the last two months is approximately 80,000 shares. Over the last three months, the number of unique shares, i.e. each of a different listed company, that have been matched on a daily basis varies between one and six across all segments. The average is three unique shares a day.
There are two anti-gaming mechanisms in place, namely minimum order size (MOS) and minimum execution size (MES). MOS is the minimum consideration that may be entered as a hidden order and is determined by the JSE. It is a value-based parameter which is calculated using a multiple of each instrument”s exchange market size and its three-month average closing price. MOS is reviewed on a quarterly basis. MES is the minimum size at which a broker is willing to execute and is entered by each member individually. This is a volume-based parameter which, when converted to a value, must be greater than or equal to the JSE specified MOS.
The JSE equity market hidden order functionality operates independently within the South African market.