Strate, a South African Central Securities Depository (CSD), has welcomed the official go-live of South Africa’s newest bourse, ZAR X, after successfully integrating the exchange into Strate’s clearing and settlement platforms.
At the beginning of September 2016, the Financial Services Board notified the market that it had granted ZAR X an exchange licence. Strate was appointed by ZAR X to provide it with central depository services since the bourse’s inception early in 2015, where the CSD prepared to integrate the different requirements for ZAR X to create a bespoke settlement solution.
Preparatory work between Strate and ZAR X has taken place to implement a unique settlement cycle, which showcases the flexibility of Strate’s equities clearing and settlement technology to settle on any cycle that an exchange requires.
According to Beverley Furman who is the Managing Executive of CSD Operations, a division of Strate, Strate’s clearing and settlement technology already caters for multiple settlement cycles, from same day settlement (T+0), to three business days thereafter (T+3), or any requirement in fact (T+n). “When we were appointed by ZAR X as their Central Securities Depository, we understood that they wanted their equities settlement cycle to be on a T+0 basis and required a bespoke solution that would cater directly for their market. Given their shorter settlement cycle requirements, we developed solutions to address their unique corporate actions process and payments methodology, their closed account structure, as well as their pre-funded model.”
Etienne Nel, CEO of ZAR X, adds: “This is a historical milestone for the South African market and we couldn’t have achieved this without our service providers.
Strate’s born on the premise that it aims to deliver solutions that mitigate risk in the financial markets. A real-time settlement cycle achieves just that, as it ensures there’s no settlement risk to the investor, a win-win for both ZAR X and Strate.”
Furman concludes that Strate is open for business. “Strate has continued to be a trusted and independent party in the market, which is evident by us offering CSD services to new stock exchanges. Our equities settlement technology is robust and flexible and can cater for a number of evolving client needs and we can only look forward to working with our current and new clients in the years ahead.”