South Africa’s bonds system to be revamped

At Strate, weʼre planning to revamp our bond clearing and settlement system with new advanced technology that will take the entire market forward using global best practice and standards. This will further enhance risk mitigation in the South African financial market.

 

The financial market has resulted in Strate wanting to increase our investment in the latest bonds clearing and settlement technology available.

 

Says Iann Seymour-Smith, Head of Custody and Settlement:

The current UNEXcor settlement and clearing system used for the South African bonds market has served the market since 1991, and while it has proved to be a reliable and stable system for the market, Strate is always ensuring it provides value for its stakeholders through the solutions it offers. Technology in general evolves at a rapid pace and we want the best-of-the-best technology for our market so that it can enhance the profile of South Africa’s financial markets, boost liquidity and further facilitate the management of risk in line with global best practice.”

Bond clearing and settlement project roll-out

We have been consulting with the market on resource requirements and have now obtained the market’s commitment to move forward with the roll-out of the project for implementation in 2014, which will bring with it a number of benefits.

 

The technology for the bonds clearing and settlement system will look to:

 

• Reduce business risk;
• Provide operational flexibility to configure and control various business processes;
• Support current and new CSD Participants and the broader market’s growing needs;
• Be flexible to settle all three Bank for International Settlements’ settlement models;
• Have multiple settlement runs to minimise failure; and
• Provide the ready support for Segregated Depository Accounts (SDAs) and a Securities Ownership Register (SOR), as well as for the inclusion of other business areas, such as derivatives and commodities.

We are in a high-value market where settlements can exceed R100 billion per day, and with a number of exciting developments on the horizon, we believe that the implementation of an advanced system will cater for the future needs of the market and enhance the current infrastructure.