Equity Corporate Action Payments through the South African Reserve Bank (SARB)

After months of extensive testing, planning and market education around the enhanced payment process, it is with great excitement that we announce the successful implementation of this solution on 5 October 2015.


We are confident that this new model will achieve the desired goal of mitigating risk by reducing the dependency on commercial banks and improving efficiencies within the payment process.


In this new solution all corporate action payments for equities can now be processed through the SARB’s South African Multiple Options System (SAMOS), as opposed to the current process where the corporate action payments are processed through the Strate Trust account.


Strate would like to thank the issuers, banks, SARB and all other parties involved for making this milestone for the South African markets a huge success. Both the traditional and the new process will continue to be offered for the foreseeable future. Issuers are, however, encouraged to approach the Strate relationship team to explore the benefits that this new solution offers.



Feedback from the Issuer Forums

Strate hosted its first Bonds Issuer Advisory Forum on 27 August in Johannesburg.


The main purpose of the forum was to provide issuers with an overview of the new Debt Instrument Solution that Strate will be implementing. Strate has partnered with Tata Consultancy Services, which is a globally recognised industry leader in their field. The benefits will include the introduction of a Securities Ownership Register (SOR) which will allow Strate to provide a greater level of detail of beneficial owner information, multiple settlement runs to enhance operational agility as well as a centralised information portal for all note/bond holders, to mention a few.


At our recent Cape Town Issuer Forum in September one of the key topics discussed was the inability to contact shareholders electronically due to the lack of email addresses provided in shareholder registers. Strate embarked on a data clean-up exercise with CSD Participants and approved nominees to address this concern. The Johannesburg Issuer Forum has requested the JSE to encourage brokers to provide email addresses for their underlying clients on the beneficiary download.


We thank you for your participation at these forums and urge you to let us know if you have any further topics you would like to discuss with us.


Update on the Move to T+3 for Equities

Strate continues to work with the JSE and other market participants to implement a shortened settlement cycle for equities, which will reduce from five business days to three days, and be in line with international standards. We will continue to distribute educational material from the JSE over the next couple of months and encourage you to familiarise yourself with the contents.


The JSE initiative, which kicked off in 2013, has been rolled out in phases, with phase 1 and 2 being successfully completed in 2013 and 2014 respectively.  Phase 3 is now well under way and the proposed implementation date for this project is between May and July 2016.


Successful implementation of this project will improve the credibility and operational efficiency of our local equity market. The shorter settlement cycle will also lead to a decrease in the value of unsettled trades and an improvement in liquidity in the market. The further consequence of these benefits is that South Africa becomes an attractive destination for foreign direct investment.


Should you have any further questions regarding the project, please contact the JSE on the +27 (0)11 520 7000.


Revision of the Register Administration Fee

In our interactions and meetings with issuers, the matter around the rigidity of the Register Administration fee has been a common theme. This fee would typically appear on issuers’ monthly invoices and covers each individual electronic book entry movement on the securities register that occurs in the dematerialised environment. The fee is calculated using the number of trades executed at the JSE, on a particular issuer’s securities, as this directly affects the number of electronic book entries that must be made on the uncertificated registers.


We are pleased to advise that we have introduced a third tier to the current two-tier structure. The additional tier will result in a cost saving to issuers with monthly trades in excess of 40 000, as trades will be charged at a reduced rate of 55c (excluding VAT). The below table illustrates the revised register administration fee structure that came into effect on 1 September 2015:


1 – 9000 trades: 79c per trade (excl.VAT)
9001 – 40 000 trades: 62c per trade (excl.VAT)
Exceeding 40 000 trades: 55c per trade (excl.VAT)



Springbok Fever Breakfast

With the Rugby World Cup taking place during September and October, a breakfast was held at the Wanderers Club for our issuer clients in July. It was co-hosted by Strate, the South African Rugby Union (SARU) and Peiser Connections and was well-attended.


The aim of the morning was to raise awareness around SARU’s Rugby Academy Programme, which is instrumental in honing the skills of up and coming talent, while developing them into fully-fledged professionals.  The players are afforded the opportunity to choose vocational or educational courses best suited to their specific aptitudes. Upon completion of their three-year academy course, graduates will have the skills and capabilities to pursue a professional rugby career, while having also obtained a tertiary qualification.


The morning was bursting with rugby fever, as clients got the opportunity to take pictures with Trevor Nyakane and Kyle Brown, both of whom are an exemplary product of the Academy. A panel discussion was conducted by one of Strate’s Executive team, Anthony van Eden, who interviewed the players, as well as Hans Scriba, who is the spokesperson for the Academy.




We hope the attendees had a great time and we look forward to more events of this kind, where we get the opportunity to engage with you in a more festive environment.


Feedback from the GIBS Conference

The Game Changers in Financial Markets conference was hosted by Strate, in conjunction with the Payments Association of South Africa (PASA) and the Gordon Institute of Business, on 29 September. The conference was a resounding success and delivered on its primary objective of providing premier thought leadership through its line-up of keynote speakers, as well as robust discussions conducted through panel Q & A Sessions with the various speakers.


The auditorium was enthralled by speakers who presented on topics such as the latest Financial Sector Regulations and the economic outlook for South Africa. Digital transformation and the threats of cybercrime within the financial sector also formed part of the day’s presentations. The conference ended on a high note where Monica Singer conducted a panel discussion on the future of self-regulatory organisations in the new Financial Sector Regulation Bill.



First Bonds Donated to Strate Charity Shares

Strate Charity Shares (SCS), a registered non-profit organisation and charity donation programme, has received its first bond donations that will go towards supporting charities across South Africa that are dedicated to feeding, raising and educating children.


SCS was created over thirteen years ago to address the long-standing problem of investors holding small amounts of unwanted shares. Investors who want to dispose of these unwanted shares to neaten up their portfolios have previously been deterred by the cost of selling them. As a result, thousands of rands are tied up in assets that cost more to sell than they are worth, and portfolios are left in an untidy state.


While investors have been donating their shares to SCS, either directly, or through their broker, they are now able to include bond donations as well, and receive a tax benefit for doing so. In terms of Section 18(A) of the Income Tax Act, when investors donate to SCS, they are issued a receipt that can be claimed against their tax liability.


Since 2002, SCS has paid more than R3.5 million to charities dedicated to helping children. The people and companies involved in SCS all give their time and labour free of charge. Charities that have historically been the recipients of these donations are the African Children Feeding Scheme; Bethany House Trust; Child Welfare Tshwane; Cotlands; Guild Cottage; Nazareth House; Salesian Life Choices; Topsy Foundation and Zisize Educational Trust.


For more information regarding SCS, visit https://trustlink.co.za/people-culture-community/strate-charity-shares.


If you wish to donate your equities and bonds to SCS, please call the toll-free helpline on 0800 202 363, or +27 (0)11 870 8207 if you are phoning outside South Africa. Alternatively, you can email charityshares@computershare.co.za.