STRATE LTD, SOUTH AFRICA

General information
Strate Ltd is the authorised Central Securities Depository (CSD) for the electronic settlement of all financial instruments in South Africa. Its vision is to be the trusted and preferred centralised provider of products and services which are accessible to, and create value for, its current and future stakeholders.

Strate’s core purpose is to mitigate risk, bring efficiencies to the Southern African financial market and improve South Africa’s profile as an investment destination. Strate is aligned to international best practices and continually strives to ensure operational excellence and enhancements for the good of the Southern African financial market.

Currently Strate handles the settlement of equities, warrants and bonds for the JSE Ltd (the former Johannesburg Stock Exchange) and BESA Ltd (formerly known as the Bond Exchange of South Africa). From the last quarter of 2008, Strate will also settle money market instruments

Strate is a public unlisted company with dematerialised assets under custody in excess of $692 billion US.
*Currency converted on 31 January 2008

Ownership and governance
Strate is owned by the JSE (44.547%), the four major South African Banks [ABSA Bank (12.679%), FirstRand Bank Ltd. (12.679%), Nedcor (14.996%), Standard Bank (14.996%)] and Citibank (0.103%).

Services provided

1. Clearing and Settlement services

Strate’s core function is the clearing and settlement of dematerialized securities. Services include the settlement of all transactions concluded on the JSE as well as those done “Off-Exchange” in JSE listed securities. Off-market settlements include Securities Lending transactions, American Depository Receipts settlements, account transfers and portfolio moves. In addition Strate also manages the settlement of bonds for BESA Ltd.

2. Other Services

  • SAFIRES, Strate’s settlement system, front end also serves as a backup and disaster recovery to participants;
  • SWIFT connectivity for secure communication and exchange of messages;
  • Facilitate settlement through central bank funds at the South African Reserve Bank;
  • Shared IT services with other market players;
  • Facilitates Straight Through Processing (STP) through electronic messaging (S.W.I.F.T ISO 15022 standards) and offers SWIFT connectivity to the JSE, its brokers and other users;
  • Optional use of the in-house Wide Area Network;
  • Settlement of all trades on the Namibian Stock Exchange;
  • Corporate Actions;
  • Managing the vault for bond instruments not yet dematerialized;
  • Compliance with international standards including the G30 Recommendations and CPSS/ IOSCO.

  • 3. Value-added Services

    To comply with the current legislation included in section 140A and section 91A of the Companies Act, Strate provides full beneficiary disclosure 12 times per year to the issuers or their Registrars / Transfer Agents.

    To enhance the value of the statutory beneficial download, Strate also provides a number of different layouts of the reports, which enables the recipients to better analyse the breakdown or makeup of the shareholder base. Some of the information made available is set out below:

  • Top 100 shareholders;
  • A breakdown between residents and non- residents;
  • Categorisation by investor classification;
  • Shareholders by ban;,
  • Shareholders movements from month to month;
  • The percentages held by shareholder, category or band.

Main initiatives:

  • Money Market Instruments One of Strate’s key strategic objectives is to settle all financial instruments in South Africa. During 2008, Strate will expand its operations to include the electronic settlement of Money Market Instruments.
  • Move to T + 3 for Equities The South African market is working on starting the process of reducing its settlement cycle for the settlement of equities from a T+5 cycle to a T+3 cycle. The T+3 Project is aimed at identifying all the potential barriers that hinder the move to T+3 and the action points to overcome the barriers with minimum risk and disruption to the South African market.
  • Corporate Actions The South African market is currently working on a project to streamline its corporate action processing model and enhanced straight through processing in the corporate actions arena. This project is a joint initiative driven by all market players and Strate Ltd.