Futuregrowth Asset Management accused the JSE of reneging on agreements to improve investor protection in South Africa’s R3.08 trillion ($204 billion) bond market.

Futuregrowth, which manages about R194 billion of investments, said the JSE scrapped agreements made in October to boost investors’ ability to negotiate the terms and conditions of loan documentation transparently with lenders, and a requirement that borrowers, not investors, pay for legal advice. This put the bourse out of step with other jurisdictions, the fixed-income unit of Old Mutual said.

“Their exclusion violates every principle of sound lending,” Olga Constantatos, Futuregrowth’s head of credit, said in a note to clients on Wednesday. It “enables issuers to divide and conquer by not allowing the investors to properly negotiate in the interest of the individual and pension-fund investors we represent,” she said.

South Africa’s capital markets have been roiled by malfeasance at both state-owned companies and those owned by private investors in recent years, heightening demands for better protection for investors. The JSE, which also runs Africa’s biggest stock exchange, has been in talks with debt investors to improve regulation.

Pheliswa Mayekiso, a spokeswoman for the JSE, said the company will comment after considering Futuregrowth’s statement.

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