Page 56 - Profile's Stock Exchange Handbook - 2025 Issue 1

JSE Dealing Costs Profile’s Stock Exchanges Handbook: 2025 – Issue 1

JSE Dealing Costs

JSE Dealing Costs
As the JSE grows so the cost of buying and selling shares continues to come down as the fixed costs of brokers
and the exchange are spread out over more transactions.
Brokerage
Brokerage charged by stockbrokers varies from 0.32% to 1.70% of the value of the transaction. There is also a
clear distinction made between the fees of discount brokers and full service stockbrokers. Discount brokers are
usually online brokers and offer clients low brokerage fees and give recommendations on what shares to buy or sell
viatheirwebsite.Fullservicestockbrokershavemuchhigherbrokerageandadministrationfees.Theyprovideadvice
on what shares to buy or sell via the telephone and usually provide a dedicated portfolio advisor to their clients.
Some brokers charge brokerage fees as a flat percentage of the size of the trade. Others apply a sliding scale that
decreasesthepercentagechargedasthevalueofthedealincreases.Mostbrokeragechargesaresubjecttoaminimum
fee (eg. one discount broker charges R99 excl Vat whilst another full service broker charges a minimum of R180).
Note that brokerage is usually quoted before Vat as there are other transaction costs associated with a trade that are
subject to Vat (see below) and a total Vat amount is calculated on all these charges together.
For equity transactions above R18 000 all inclusive round trip costs are typically below 2% via a discount broker
which is relatively cheap compared to unit trusts, property and many other investment alternatives. For trading in
warrants, where minimum brokerage often applies, the cost effective floor level is obviously lower.
Comparison of trade costs: R18 000 transaction:
Equity Trade Warrant Trade TFIA Equity Trade
Buy Sell Buy Sell Buy Sell
Cost of Shares R18 000.00 R18 000.00 R18 000.00 R18 000.00 R18 000.00 R18 000.00
Brokerage Fee R110.00 R110.00 R50.00 R50.00 R45.00 R45.00
Strate R9.17 R9.17 R9.17 R9.17 R3.97 R3.97
STT* R45.00 * * * * *
IPL R0.04 R0.04 R0.04 R0.04 R0.04 R0.04
Vat R17.13 R17.13 R8.88 R8.88 R7.35 R7.35
Total Fees R176.34 R131.34 R68.09 R68.09 R56.36 R56.36
Total Transaction R18 176.34 R18 131.34 R18 068.09 R18 068.09 R18 056.36 R18 056.36
Dealing cost percentage 0.970% 0.724% 0.377% 0.377% 0.312% 0.312%
Based on Standard Online Share Trading fees. *Purchase transactions of equities attract Securities Transfer
Tax (STT) of 0.25% of the value of the trade in addition to the amounts shown above.
Administration fees
Most brokerage firms charge a monthly administration fee designed to cover account administration, imple-
mentation of corporate actions (share splits, payments of dividends, etc.) and so on. For discount brokers this fee
may also include access to an online trading facility, live share prices, fundamental data (such as in this book) and
research. Full service brokers may charge an administration fee as a percentage of the value invested. For discount
brokers monthly fees vary from as little as R110.00 (including Vat) depending on the services provided.
Regulatory and other costs
In addition to brokerage, the JSE levies the STRATE Settlement Costs, calculated as 0.005787% excluding
COSTS to R116 116.01, maximum of R108.10 (excluding VAT) for trades with a value over R1 867 868.46), and a FSB
VAT) based on the valueof the sharetransaction(minimumof R6.72 (excludingVAT) for trades with a valueup
Investor Protection Levy (0.00031% on all trades.), designed to finance insider-trading investigations. VAT of
15% is payable on all these charges as well on the brokerage fee.
DEALING Tax Free Investment Accounts

Since the introduction of Tax Free Investment Accounts in the Finance Minister’s 2015 Budget Speech,
JSE many brokerage firms have introduced them into their offerings. The benefit of these accounts is that all
proceeds from investments are tax-free. To make theseevenmoreappealingthe JSEand STRATE have
reduced their costs, which in turn have allowed brokerages to reduce the fees they charge their clients.
Standard OST operates TFIA accounts at a specially reduced brokerage rate of 0.15% and allows for trade in all
tax-free approved Exchange Traded Funds.
Online Share Trading operated by SBG Securities (Pty) Ltd.

54