June, 2007 Currency Trader mag
The Johannesburg Stock Exchange (JSE) listed South Africa’s first exchange-traded currency futures product in mid-June. The JSE launched futures on the U.S. dollar/South African rand and hopes to add euro/rand and British pound/rand spreads at a later date.
The Reserve Bank of South Africa says about $10 billion of spot forex transactions occur daily, but the JSE did not provide an estimate of how much business it expects the futures to do.
Individual traders looking to participate in rand futures must purchase at least $1,000 worth of contracts but have no limitations. Pension funds have a 15-percent foreign allocation allowance, while asset managers are capped at 25 percent of total assets. Hedge funds are not yet allowed.
South African residents face many restrictions with exchange-traded products, but the JSE believes the futures will allow the South African Treasury to relax some of those controls.