Over the weekend of 20-22 July 2013, the Johannesburg Stock Exchange (JSE) implemented Phase 1* of its T+3 Project aimed at reducing the settlement cycle from the current T+5 to T+3.
Phase 1 of the project involved separating JSE Members’ proprietary and controlled accounts at both Strate and at the CSD Participants. Given the nature of the settlement model in South Africa, the separation of accounts resulted in additional settlement transactions being generated by JSE Members to Strate.
Strate is pleased to inform the market of rebates as well as of certain fees that are being waived in support of the project.
Firstly for the period of the implementation (estimate at two weeks from 22 July 2013), all Account Transfer Fees were waived by Strate.
In addition, the JSE Members will also receive a rebate from Strate for additional settlement transactions. Strate will determine the rebate based on the JSE Members’ average number of settlement transactions incurred over the first six months of 2013 (January – June 2013) and rebate JSE Members for any transactions generated above this number. Given that the settlement fees are recovered by Strate via the CSD Participants, the rebate will be passed on to the JSE Members via their CSD Participant.
This rebate will become effective from 22 July 2013 to 31 December 2013. As of 1 January 2014 onward, Strate will implement a revised fee structure that takes into consideration the separation of accounts, as the rebate mechanism is temporary.
The project aims to align the South African market’s settlement cycle with the international recommendations set by both the Group of Thirty (G-30) and the International Organisation of Securities Commissions (IOSCO), which advocates a T+3 settlement cycle.
Should you have any queries, please do not hesitate to contact our Custody and Settlement Division at:
Iann Seymour Smith
Head of Custody and Settlement Strate Ltd
+27 (0)11 759 5349
Ianns@strate.co.za
Monica Olwagen
Manager: Settlement Services Strate Ltd
+27 11 (0)759 5358
Monicao@strate.co.za
Phase 1 of the project includes the Regulation and Automation of:
- Split Brokers Prop and Controlled
- Controlled Client Pledge (electronic pledge to 3rd parties)
- Member SLB Automation to CSD Participants
- Member Corporate Actions Automation to CSD Participants
The settlement cycle will move from T+5 to T+3 as part of Phase 1 of the project: Click here to download the Market Communication Presentation >>
