Launching a stock exchange to compete with a long-established incumbent is an unusually ambitious undertaking, and the case for doing it rests on a genuine gap: mid-sized companies that need access to capital but for which a main-board listing is disproportionately expensive and demanding. Alternative exchanges exist to serve companies that fall between private funding and a full listing.
South Africa’s exchange landscape opened to competition after regulatory changes allowed new licensed exchanges, and the businesses that stand to benefit most are those currently too large for conventional small business funding and too small for the main board.
The gap is companies caught between funding options
A company that has outgrown bank lending and private investors but cannot justify the cost and compliance burden of a main-board listing has historically had limited options, and alternative exchanges are designed specifically for that position.
Lower compliance cost is the core proposition
The practical appeal of an alternative exchange is proportionate requirements, meaningful enough to protect investors, light enough that a mid-sized company can meet them without the overhead a main-board listing demands, which changes the economics of raising public capital.
Liquidity is the hardest problem for a new exchange
An exchange only works if buyers and sellers are genuinely present, and attracting sufficient trading activity, particularly institutional participation, is the central challenge any new exchange faces, since listing without liquidity gives issuers a valuation but not a functioning market.
More exchange options change what is possible for growing businesses
For business owners, the practical consequence of a more competitive exchange landscape is additional routes to raising capital and eventually realising value, which widens the strategic options available to a company planning several years ahead.
South Africa now has licensed exchanges built for smaller listings, including A2X Markets, with requirements considerably lighter than a main board listing.
Frequently asked questions
What gap do alternative stock exchanges address?
Companies that have outgrown bank lending and private investment but cannot justify the cost and compliance burden of a main-board listing, a position that historically left limited options.
What is the main appeal of listing on an alternative exchange?
Proportionate requirements, substantial enough to protect investors but light enough for a mid-sized company to meet without main-board overhead, which changes the economics of raising public capital.
What is the hardest challenge a new exchange faces?
Liquidity. An exchange requires genuine buyers and sellers, and attracting sufficient trading activity, especially institutional participation, determines whether a listing produces a functioning market or only a valuation.
Why does exchange competition matter to ordinary business owners?
Because more listing options widen the routes available for raising capital and eventually realising value, expanding the strategic choices for a company planning several years ahead.
Is an alternative exchange listing suitable for a small business?
Generally it targets mid-sized companies rather than small ones, since even proportionate listing requirements involve governance and reporting obligations beyond what a small business typically carries.
Further reading
Originally published in April 2017. Updated September 2026 and rewritten in house voice, focusing on what alternative exchanges mean for growing businesses rather than the launch itself.
