On Monday, 11 July 2016, history was made. The JSE’s equities market, which has run on a five business day settlement cycle for the past few decades, moved to a new three business day settlement cycle (T+3).


This formed part of a project spearheaded by the JSE, which was initiated in 2013 with various stakeholders.


According to the FSB, the regulator of both Strate and the JSE, T+3 brings South Africa’s capital markets in line with global best practice as recommended by the International Organisation of Securities Commissions, mitigating both systemic and settlement risk. In a media release, the FSB explained that a substantial portion of the risks in clearing and settlement has been directly related to the length of time it takes for trades to settle. “A shorter settlement cycle has positive implications for the volume of transactions, market liquidity and the opportunity cost associated with the provision of collateral,” the release read.


Strate’s CEO, Monica Singer, says: “We have been committed to working with the market to make the JSE’s T+3 settlement cycle a reality. Globally, markets have moved to shorter settlement cycles. It’s viewed as a way to reduce risk and create further efficiencies, ultimately contributing to more liquidity in the market. With the JSE’s move to T+3, they have aligned the equities market to global standards, which is very attractive for foreign investors. A lot of hard work has gone into this project over the past few years and we’re excited to see the arrival of T+3.”


Record settlement volumes and values on final T+5 day

Five business days after T+3 went live saw the last time settlement for equities traded on the JSE take place on the five business day cycle. Given that it ran in conjunction with the newly implemented T+3 cycle, Strate witnessed new record highs in terms of settlement volumes and values on 15 July 2016.



  Settlement Date   Settlement value in Rands   Number of settlements
15-Jul-16    R 45 491 956 648.74            46  449



By way of example, the figures in the table above are 1.7 times higher than that of a futures close-out month where settlement numbers that are higher than most other months. In comparison to the month of June, which is a Futures close-out month that has, the average number of settlements per day was 26 200 and the average value of settlements per day was R26,6 billion. This was on the previous T+5 cycle.


This is the highest value and number of equity settlements processed in one day. An impressive netting efficiency of 94% was achieved and a record number of 171 000 messages were processed through Strate’s IMS Gateway application.


Singer concludes, “I commend the efforts of all players for continuing to advance on this project and helping the JSE achieve its goal of moving to a shorter settlement cycle for equities.”


Staff forming a T+3 shape
Staff forming a T+3 shape
Staff celebrating T+3
Staff celebrating T+3




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