Interest in Strate’s Collateral Management Services continues to grow, as nine local banks have successfully performed scripted testing on the system.
The banks participated in scripted market testing of the service to secure the interbank lending market. There was a particular focus on the lending in the ‘the South African Multiple Option Settlement (SAMOS) system position/square-off window’. Over 90 people were trained by Strate.
Strate has also submitted motivations to National Treasury and the South African Revenue Service to consider certain tax exemptions to remove the impediments relating to the use of specific securities for collateral. A Working Group has been put in place as a result. The Finance Minister Nhlanhla Nene noted in the 2015 South African Budget Speech that “government proposes to review the tax treatment of the transfer in beneficial ownership of collateral to reduce any negative effects on acceptable business practices and limit the use of collateral in possible tax avoidance arrangements”.
Strate has continued its engagements to confirm the next steps to having the dispensations included in the Tax Laws Amendment Bill. Should the amendments be accepted, they are expected to be effective from the beginning of 2016.
Looking at the second quarter, Strate and the Association of Corporate Treasurers of South Africa (ACTSA) hosted a conference on collateralisation benefits for Corporates during April. Strate and Clearstream also participated in the Securities Finance Masterclass Conference.
To find out more about Strate’s Collateral Management Services, email collateral@strate.co.za.
