The JSE has agreed the terms of a commercial arrangement with Globacap Technology to establish a blockchain-enabled private placements platform to enable the raising of infrastructure finance and to allow small- to medium-sized issuers to raise capital in South Africa.
The commercial arrangement includes digital registry services and remains subject to licensing approval requirements.
As private capital markets continue to grow in importance, and are an increasingly attractive alternative sources of capital for issuers, the JSE intends to create a centralised platform for issuers to effectively and efficiently raise capital, it says.
It notes that these efforts align directly with the group’s stated growth strategy.
Globacap is a next-generation capital markets fintech company offering blockchain solutions for private capital markets and digital registry services.
Globacap is registered and headquartered in the UK and, through its regulated private placement and capital management platform, digitally administers over £1-billion of private shares and debt instruments for 60 companies and more than 8 000 shareholders worldwide.
The Globacap platform provides end-to-end fundraising management tools designed to automate private issuances in the equity and debt capital markets.
The platform also offers second round liquidity capabilities that enable holders of equity or debt instruments to exit or syndicate their original investment.
Moreover, Globacap offers a complementary digital registrar service that digitises and simplifies the administration of shareholder registers.
In support of the commercial arrangement and in line with the JSE’s intention to build a longer-term strategic relationship with Globacap to enhance and expand the group’s product offering, the JSE will invest £4-million for a minority stake in Globacap.
This investment remains subject to the fulfilment of conditions precedent, including approval from the Financial Conduct Authority in the UK.
The JSE says this investment will enable it to forge a closer working association with Globacap in developing the requisite skills, expertise and relationships to digitise products and services and implement next-generation technologies.
Through this collaboration, the JSE intends to replicate and adapt Globacap’s private markets and registry strategy and product offering across African markets, while reducing the execution risk of expanding into new markets and products.
The investment will be funded from the group’s existing cash reserves and is expected to be finalised during the first quarter of 2021.