Strate: A Pioneer of Exchange-of-Value Settlement Solutions

All too often, good infrastructure goes unnoticed. This is probably one of the reasons why few South Africans know and understand the country’s Central Securities Depository, Strate, however, without it, investors would shy away from South Africa.
Prior to the implementation of Strate in 1999, SA was categorised as one of the worst emerging markets in terms of operational and settlement risk. Trading volumes on the stock exchange were averaging 4,000 trades daily, very thin when this is compared to the 350 000 on average during a month today.

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Strate Charity Shares’ Donations Surpass R6m Mark

Strate Charity Shares (SCS) is registered as a non-profit organisation and charity donation programme that was created almost 15 years ago to address the long-standing problem of investors holding small amounts of unwanted shares. Since 2002, SCS has paid more than R6 million to charities dedicated to helping children.  It hands donations to charities across South Africa that are dedicated to feeding, raising and educating children.

 

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.

 

Donate Equities and Bonds

A solution is for clients to donate their shares to charity by contacting SCS, either directly, or through their broker. Given the success of share donations, SCS will be enabling investors to include bond donations as well. Investors will be able to dispose of bonds as securities to neaten up their portfolios, as well as receive a tax benefit for doing so. In terms of Section 18(A) of the Income Tax Act, when investors donate their shares to SCS, they are issued a receipt that can be claimed against their taxation liability.

 

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.

The Steps to Employee Wellness

It may be one small step for man, or employee, but it’s a giant leap for employee wellness. South African central securities depository, Strate, has incorporated a “work while you walk” approach to its daily routine. Not only has the company purchased two In-Movement Treadmill desks, more employees are incorporating standing and walking into their daily work routines, and have opted to replace their office chairs with stability balls, which are known for the related improved health, posture and strength.

 

Strate CEO, Monica Singer, using her InMovement Treadmill Desk

The Central Securities Depository already has a number of initiatives underway, which range from its corporate wellness day to financial fitness workshops. But since its CEO, Monica Singer, discovered the innovative ergonomic treadmill, she personally bought one for herself. She instantly felt energized because her serotonin levels were up at work, she was relieving stress and meeting her daily Discovery Vitality fitness goals. She wanted staff to have the same experience, which is why she invested in another machine to be used by staff as well and has promoted the use of standing desks.

 

“We live in the age of technology, whether it’s owning a smart phone that allows you to monitor your health, or a smart watch that tracks your eating and sleeping habits, or apps that combine that data to help you achieve your fitness goals. Many people have to exercise after work to achieve their desired fitness, but this In-Movement Treadmill allows them to work out and work on their computer at the same time,” explains Singer.  “It’s also about more than just ensuring that employees are well enough to be at work, it’s about employees’ physical and mental health, their social, financial and spiritual wellbeing.”

 

One cannot address wellness and ignore the importance of physical activity. It is vital that employees are encouraged to be physically active. This may be through an office gym, something not all businesses can afford, or through an office sports team – which increases the solidarity between employees. Strate already sponsors its corporate soccer and cricket teams, as well as cycling and running initiatives for employees.

 

According to Statistics South Africa, absenteeism costs the country’s economy between R12bn and R16bn each year. These statistics also show that on any given day, over 15% of staff could be absent. They also believe that two out of three employees who fail to show up at the office are not physically ill – but are rather battling to cope or are unhappy at work. Absenteeism is possibly the single most expensive problem affecting organisations locally and internationally, so it’s worth investing in a solution that works, and which is one that fits the culture of your work environment.

 

From work-life balance, to providing employees with an annual training budget to better improve their knowledge and skills, Strate aims to be an employer of choice.

 

Singer ensures that Strate takes their employees’ wellness seriously through annual work with ICAS (Independent Counselling and Advisory Services), a health and wellbeing service that provides them with access to a 24-hour, 365 day-per-year toll-free helpline for counselling and consultation, and other services.

 

Strate regularly hosts financial wellness workshops for its employees to educate employees to better manage their finances and reduce some of the stress caused by their financial burdens. A recent PwC survey found that personal finance issues distract 20% of employees at work. “These workshops make a huge difference in terms of ensuring that employees aren’t distracted and have the necessary tools at their disposal to obtain and maintain their financial wellness”, says Singer.

 

The new Fractal Division at Strate, sporting standing desks and stability balls

One thing that many companies overlook when thinking about employee wellness is the beauty of the environment in which employees work. “Aesthetics are important too, because you want to create a welcoming environment that employees look forward to going to every morning. This can be done through natural light, the display of colourful artwork, or having fresh flowers around various areas of the office”, says Singer.

 

“Employers must move beyond health assessment to-do lists to a culture-driven and relationship building approach in order to ensure everyone who works at their organisation is healthy and able to reach their full potential in their career”, concludes Singer.

 

 

Infographic: Strate Fast facts

From a Thomas Murray AA- rating, to Strate being ranked among the top Central Securities Depositories globally, click here to view an infographic that tells you all the fast facts that you need to know about Strate.

 

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Rob Barrow appointed Chairman of Strate

Rob Barrow, a current board member of Strate, has been appointed the chairman of the company’s Board, effective 4 November 2016.

 

Monica Singer, Strate’s CEO, welcomes the appointment of Barrow. “Rob has a wealth of expertise and knowledge spanning more than two decades in the capital markets and he has served rob-barrowon Strate’s board as a director for a number of years. I look forward to working with him in his new role as our chairman.” Barrow’s work history includes being the Executive and Deputy Executive Officer at the Financial Services Board, where he was responsible for the regulation and supervision of the South African non-banking financial services industries. Prior to this role, he was the Director of Surveillance at the JSE.

 

Barrow succeeds Bobby Johnston.

 

Singer says, “I am truly grateful for the role Bobby has played, not only as Strate’s chairman for the past five years, but also since Strate’s inception. He played a key role in lobbying the market to move to electronic settlement in the early days of Strate. He has been my mentor for the past two decades and his knowledge has been a great asset to this company. Going forward, I am pleased to have his continued involvement as a consultant to Strate.”

 

While Johnston was appointed chairman in 2011, he was closely involved in Strate when it was a project in 1996. He became a non-executive director of Strate when the company was formed in 1998.

 

Strate’s current Board comprises 14 directors, and 2 alternate directors, who are as follows:

 
Directors

Mr Robert Barrow (Chairman)

Ms Monica Singer (CEO, Executive Director)

Ms Ashnee Maharaj (CFO, Executive Director)

Ms Alicia Greenwood

Mr Chris Edwards

Ms Daisy Naidoo

Mr Keith Getz

Mr Leon Campher

 

 

 Ms Marilyn Ramplin

Mr Murray Stocks

Ms Nicky Newton-King

Mr Nigel Payne

Mr Raymond Ndlovu

Mr Russell Loubser

 

Alternate Directors

Mr Charl Bruyns

Mr Ryan Proudfoot

 

 

 

Trusted to be an Independent Provider of Custody and Settlement Services

Strate’s success lies in its independence and good corporate governance. It has continued to be a trusted and independent party in the market, which is evident by Strate offering CSD services to new stock exchanges.

 

At the beginning of September 2016, the Financial Services Board notified the market that it had granted ZARX and 4 Africa Exchange (4AX) exchange licences, with conditions. Strate has been appointed the Central Securities Depository for both exchanges and will continue to explore further opportunities with other bourses.

 

Strate looks forward to working with its current and new clients in the years ahead.

 

 

Strate Africa Blockchain Summit

On 13 October, Strate held its Africa Blockchain Summit in Johannesburg to educate the market about Blockchain and Distributed Ledger Technology. The event was a great success, attended by over 200 delegates. Below are some pictures from the Summit.

 

Ten blockchain experts, including four international speakers, presented at the event. The following presentations have been made available:

Blockchain 101 + Public vs Private Blockchains – Lorien Gamaroff, CEO Bankymoon

Exploring the Interledger Protocol – Adrian Hope-Bailie, Web Standards Officer, Ripple

The Blockchain landscape within the EU and practical use cases – Dennis de Vries, Lead of KPMG, Digital Ledger Services Netherlands, KPMG

Blockchain KYC and Perfecting Identity Validation – Llew Claasen, Executive Director, Civic / Bitcoin Foundation

 

Some pictures from the event:

Blockchain and the Disruption of Financial Services

Blockchain, the online distributed ledger technology, has the potential not only to fundamentally disrupt the global financial services industry, but also disrupt how monetary instruments and assets are transferred, stored and traded.

 

Leader of Rand Merchant Bank’s ‘Blockchain’ initiative and one of the founders of the bank’s FinTech unit, Farzam Ehsani told a recent forum at the Gordon Institute of Business Science (GIBS), he believes Blockchain technology will be as transformative to our financial system as the internet has been to global communications.

 

Blockchain is a superior database where stored data is encrypted, and access to the data is also encrypted. The distributed nature of the network across many computers means that it has built-in redundancy and transactions are immutable: It is impossible to alter the record, creating a credible audit trail. On the Blockchain, multiple copies of data exist across multiple computers, creating a peer-to-peer network.

 

Use of Blockchain has begun to grow beyond its initial deployment for the Bitcoin cryptocurrency system, as a tamper-proof database that can verify the validity of all transactions.

 

Ehsani explained that until 2009, no one had transferred value digitally from one person to another without a trusted intermediary, such as a bank.  The Blockchain protocol makes use of consensus to build trust, as all the computers in the network have to agree whether a transaction is valid or not. This allows for instant and direct settlements and does away with the need for intermediaries.

 

In the future, financial instruments such as equities, bonds and derivatives, as well as physical assets such as property and cars will be issued onto the Blockchain: “Imagine the possibility of buying or selling a house, and it being transferred into your name, in a matter of not weeks or months, but seconds or minutes,” Ehsani said.

 

“This is not some crazy unbelievable theory, but will become reality in the not too distant future. There is no question this will happen; it is just a matter of time.”

 

Blockchain’s potential to transform the financial services industry post-trade means transactions could be streamlined and simplified so as to cut the costs and counterparty risk associated with clearing and settlement.

 

Ehsani said Blockchain has the ability to disrupt the payments, or value transfer, and value storage offerings that banks currently provide. As value transfer accounts for 40% of total global banking revenue, an opportunity exists for banks to reduce costs.

 

“Block chain will change the financial landscape,” as central banks could be on the Blockchain network and see all transactions in real time Ehsani said.

While cryptocurrencies are currently non-sovereign, several central banks are considering issuing their own virtual currencies onto the Blockchain, so that the potential exists to transact directly with them, bypassing commercial banks.

 

Tanya Knowles, head of Innovation and Projects at Strate, South Africa’s authorised Central Securities Depository, explained: “The world is changing and the way we interact is changing. Blockchain has huge potential, not only to make existing processes faster, but also for the peer-to-peer economy.”

 

While familiarity and adoption of Blockchain technology remains low, Knowles said she believed implementation in emerging markets was likely to be faster, as there aren’t legacy systems and legislation to hold these countries back.

 

Widespread adoption of the technology is still some time away, but collaboration would be crucial to Blockchain’s ultimate success. This includes collaboration with partners across the financial services industry, as well as regulators and central bank authorities.

 

Blockchain is forcing South African financial institutions, which are used to competing for market share to adjust to a new, collaborative paradigm, Ehsani explained: “Most money in the future will be on the Blockchain, regulated by central banks. It will allow for instantaneous payments and smart contracts. But it is still very early days for possible revenue models,” he said.

 

As a technology still in the early stages of its development, Blockchain does have potential pitfalls and unexplored outcomes. The technology is not completely immune to cybercrime, as collusion amongst users could theoretically result in modifications; and regulatory and dispute resolution issues are in their infancy.

 

Ehsani said the socio-political implications of Blockchain are a cause for concern: The potential exists to penalise a country with a lack of computing power and exclude them from the system, which could cripple a small economy.

 

However, at this early stage of Blockchain’s development, Ehsani said the most critical task was to gain a clear understanding of what the Blockchain is: “Don’t be deceived that it is just a technology in its infancy, as you may live to regret your decision,” he concluded.

~ This article appeared in the City Press