ZAR X, the first company to apply last year for a stock exchange licence, hoped to get approval enabling it to compete with the JSE by the end of March, CEO Etienne Nel said on Monday.

Should the licence be awarded, ZAR X will have an opportunity to provide an offering it says is based on simplicity, low cost, transparency and agility.

The company has waited almost four months for a response from the regulator, the Financial Services Board (FSB).

ZAR X said it was in the final stage of its stock exchange licence process and hoped to hear from the regulator soon.

"We are hoping to hear something in the next couple of months," Mr Nel said. "The final hurdle left for us … would be the licensing committee. It is up to the FSB to decide when that happens."

ZAR X submitted its licence application in March last year.

The FSB issued a notice in July inviting the public to comment on ZAR X’s licence application. The opportunity for public comment was open until September.

The industry view has been that it takes up to 180 days for a stock exchange licence application to be processed.

However, some people close to the licensing process have said that this is merely a guideline and not a rule.

ZAR X applied for a licence after the FSB issued a directive in 2014, ordering issuers whose stock was traded on platforms other than a licensed stock exchange to be licensed.

The FSB noted in its directive that the Financial Markets Act of 2012 made it an offence to operate an exchange without being licensed to do so.

An exchange is defined as "a person who constitutes, maintains and provides an infrastructure for bringing together buyers and sellers of securities; for matching bids and offers for securities of multiple buyers and sellers; and whereby a matched bid and offer for securities constitutes a transaction".

The regulator says several players including companies that created black economic empowerment schemes have broken its rules. These include MultiChoice’s Phuthuma Nathi, Sasol, and MTN Zakhele along with their own trading platforms. Others include agricultural services group NWK, which issued over-the-counter traded shares.

Mr Nel provided a platform to trade shares of BEE issuers, which had enabled previously disadvantaged individuals in SA to learn about the financial markets and start trading in shares.

Other companies that have applied for a stock exchange licence include 4 Africa Exchange and A2X.

Public comment on the 4 Africa Exchange licence application was opened last month and it hopes to start operating in the second quarter. The consortium behind 4 Africa Exchange includes NWK, shareholder administration service provider Trifecta Capital, financial and fiduciary services provider Intercontinental Trust and exchange trading platform developer Global Environment Markets.

Last year, the Maponya Group acquired a 15% stake in 4 Africa Exchange. It plans to cater for over-the-counter traded companies that were declared to be operating illegal exchanges by the FSB.