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Strate Collateral Management Services (SCMS): An automated, compliant Tri-Party Collateral solution that completely meets the market’s collateral needs

Monday, July 24, 2017

As regulation continues to drive the adoption of non-cash collateral, the administrative burden of pledging or ceding collateral on an optimised basis has never been in sharper focus. The ability for collateral givers to optimise the placement of their collateral, whether on a pledge or cession basis, is rapidly becoming the new norm. This, coupled with more frequent margining, means that collateral receivers will be under pressure to manage wider baskets of acceptable collateral within more complex collateral operational environments.

 

Regulation for cleared and non-cleared derivatives has driven the themes of collateral transparency, segregation, collateral tracking , standard reporting requirements and eligibility. Upcoming regulation, such as Secured Funding Transaction Reporting (SFTR), is further driving these themes at a transactional level for securities lending and borrowing, margin lending, commodities lending and borrowing and repurchase transactions. It is clear that the administrative burden on secured funding transactions is only going to increase in the foreseeable future, especially as collateralisation takes place on a per security basis.  It is therefore critical to have certainty that each transaction undertaken, whether on a pledge or cession basis, fully complies with local market regulations in an efficient manner.

Strate offers a Tri-Party collateral product called Strate Collateral Management Services (SCMS), which is offered in addition to the traditional pledge and cession options. SCMS fully automates collateralisation processes between collateral givers and receivers, as well as the underlying post-trade ‘plumbing’, to ensure that transactions are effected efficiently and in compliance with local regulations, while futureproofing against upcoming regulations. This functionality fully alleviates the administrative burden typically associated with both pledge and cession transactions. This is achieved by Strate’s direct integration to the CSD Participants of collateral givers and receivers, and the use of segregated depository accounts.  The solution is abstracted above the settlements layer and is able to manage complex collateral rules and then automatically execute the most optimal collateral by instructing custodians in an efficient, compliant and accurate manner.

Typically, pledging at a securities level has been a significant administrative burden. However, with SCMS, pledges are perfected at a securities level in terms of Section 39(1) of the Financial Markets Act via an automated system in just a few minutes, with no manual intervention or administration required from users. This enables highly efficient intra-day collateral substitutions on an unlimited basis.  SCMS further extends this automation by allowing collateral givers to trade out of a single account, while at the same time enabling both cession and pledge of securities at an ISIN level - as corporate events, pending sales and reserved securities are already factored into the solution’s algorithm. Collateral optimisation is thus enabled for collateral givers, as they will not be required to manage collateral between separate collateral accounts  and keep ‘buffer’ collateral in order to meet needs of multiple collateral receivers. 

The SCMS solution is already live in the South African market and has enabled the automated use of both pledge and cession constructs across multiple exposure types  and categories of financial and non-financial institutions.

If you are interested in learning more about our Tri-Party Collateral Services, please contact collateralatstrate.co.za or Steve Everett on +27 11 7595496.

 

 

 

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Bringing Unprecedented Automation, Efficiencies to South African OTC Derivatives Participants

Tuesday, July 18, 2017

South African market participants can now enjoy unprecedented automation and straight-through processing by leveraging newly available, integrated cloud-based technology to exchange tri-party SWIFT1 messaging for collateral instructions, settlement and confirmations. CloudMargin, the multi-award winning creator of the world’s first web-based collateral and margin management solution, and Strate, the South African Central Securities Depository (CSD) and South Africa’s first Tri-Party Collateral Management Agent, today announced that they have just integrated their platforms. The move makes tri-party messaging and collateral optimisation more accessible for both buy- and sell-side participants in the country.

South African market participants can now enjoy unprecedented automation and straight-through processing by leveraging newly available, integrated cloud-based technology to exchange tri-party SWIFT1 messaging for collateral instructions, settlement and confirmations. CloudMargin, the multi-award winning creator of the world’s first web-based collateral and margin management solution, and Strate, the South African Central Securities Depository (CSD) and South Africa’s first Tri-Party Collateral Management Agent, today announced that they have just integrated their platforms. The move makes tri-party messaging and collateral optimisation more accessible for both buy- and sell-side participants in the country.

The agreement enables clients to efficiently and seamlessly use their collateral held at Strate to cover their margin calls in the over-the-counter (OTC) derivatives market. For local market participants without their own SWIFT membership, this previously would have been a time-consuming, manual process to handle messaging related to collateral instructions, confirmations and settlement. Now, they can take advantage of the CloudMargin and Strate Collateral Management Services straight-through processing capability via SWIFT.

Due to the fact that the solution is cloud based, collateral management clients can implement it quickly at a reasonable cost, the firms said.

Lee McCormack CloudMargin Head of Strategy, said: “We are delighted to roll out this breakthrough service in conjunction with Strate Collateral Management Services to market participants in South Africa, helping them increase their efficiencies via our cloud-based platform. We are continuing to build an inter-connected network of organisations globally that give clients one-stop access to a broad range of collateral management and other related services for cleared and uncleared derivatives transactions.”

Steve Everett, General Manager of Strate Collateral Management Services, said: “We are delighted to partner with CloudMargin to provide a fully integrated, cost-effective and powerful collateral management capability to the South African market. This comes at a time when firms here are preparing to meet the requirements of the non-cleared OTC derivatives margin regulation due to take effect on Sept. 1, which will require enhanced collateral management capability from both the buy-side and the sell-side.”

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South African bond market to witness historic change

Friday, June 9, 2017

The South African bond market will soon receive a new clearing and settlement system that will replace the one that has served the market since 1991. 

The revolution is being spearheaded by the country’s Central Securities Depository, Strate, which owns the current bond settlement system it inherited from UNEXCor, following a merger between both parties in 2003. Strate is responsible for the electronic settlement of securities in SA and safely keeping these ownership records. 

The South African bond market will soon receive a new clearing and settlement system that will replace the one that has served the market since 1991. 

The revolution is being spearheaded by the country’s Central Securities Depository, Strate, which owns the current bond settlement system it inherited from UNEXCor, following a merger between both parties in 2003. Strate is responsible for the electronic settlement of securities in SA and safely keeping these ownership records. Strate owns the systems that seamlessly transfer the ownership of equities, bonds and money market securities electronically, delivering them to the buyer at the same time that payment is received by the seller. This is done in conjunction with its CSD Participants, the South African Reserve Bank and key market players.

On July 24, 2017, Strate plans to implement its Debt Instrument Solution (DIS) to replace the UNEXCor system. In so doing, much-needed changes to the bonds settlement model, capital event payments processes and communication between bond issuers and Strate will be introduced

“With an average of R2.4 trillion worth of bonds under Strate’s custody and settlements exceed R100 billion daily, this is a significant project being undertaken by Strate and members of the capital markets,” says Beverley Furman, Managing Executive: CSD Operations at Strate.

She adds that with the country’s best interests at heart, and risk mitigation top of mind, Strate will continue to ensure its Go-Live date can be met without introducing risk. “You can appreciate the stringent governance that Strate has over a project of this scale and importance. Given that several project milestones must still be met between now and 24 July 2017, Strate is regularly assessing progress on these milestones to ensure that this Go-Live date can be met. Should the implementation be postponed, there are contingency arrangements in place. These will be communicated in need.”

Strate is always ensuring it provides value for its stakeholders through the solutions it offers, looking at ways to evolve its core services for the betterment of South Africa’s financial markets. “We want the best-of-the-best technology for our market so that it can enhance the profile of South Africa’s financial markets and further facilitate the management of risk in line with global best practice,” says Iann Seymour-Smith, Project Executive for the DIS project and General Manager of Custody and Settlement at Strate.

The revolutionary bond settlement system will provide numerous benefits to the market. These include the introduction of multiple settlement runs, a move from older messaging protocols to international SWIFT messaging standards, the introduction of an interface that will enable bond market issuers to do their top-ups, redemptions, calls and even check balances directly with the CSD.  The streamlined capital event processes are expected to offer better, faster entitlement communication and payment distribution.

While South Africa is used to bonds settling on a T+3 settlement cycle in the Strate environment, the new system can cater for any settlement cycle from T+0 upwards. Its functionality also allows for back-to-back links across different markets; so if a security is bought on exchange and is sold on the over-the-counter market, this functionality allows for greater efficiencies across all these markets. The use of central bank funds to facilitate the payment leg of the transaction as well as capital events, continues to ensure that risk mitigation remains a priority.

DIS forms part of a wider programme where Strate is replacing its IT infrastructure for all asset classes. The component being used to settle money market securities was introduced in February 2016, while the equities market will be switched over at later stages using a phased approach. According to Seymour-Smith, “The new infrastructure offers the market a streamlined service, as multiple systems are consolidated into one. Strate is now in a position to offer more innovative products to the market in a much shorter time.”
 

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CSD Working Group Releases Product Requirements for General Meeting Proxy Voting on Distributed Ledger

Wednesday, May 31, 2017

An association of Central Securities Depositories working on developing reference products using Distributed Ledger Technology, has released product requirements for the proxy voting business case during the International Securities Services Association (ISSA) Operational Committee meeting in London on April 24, 2017.

The document titled “General Meeting Proxy Voting on Distributed Ledger: Product Requirements” contains requirements to all technical aspects of the product.

An association of Central Securities Depositories working on developing reference products using Distributed Ledger Technology, has released product requirements for the proxy voting business case during the International Securities Services Association (ISSA) Operational Committee meeting in London on April 24, 2017.

The document titled “General Meeting Proxy Voting on Distributed Ledger: Product Requirements” contains requirements to all technical aspects of the product:

  1. Functional requirements for the process, described as a minimal viable product aimed at a generic market, and extension functionality that covers specific local needs of the markets in Russia, South Africa, Switzerland, Chile, Nordic and Baltic countries.
  2. Non-functional requirements.
  3. rust requirements, enabling to provide the value typically associated with DLT-based solutions.
  4. Baseline data entities, roles and their access rights.

The document aims to provide a complete description of a reference product for proxy voting – one that can be used by business in most markets worldwide. The priorities of the working group were to capture the business value of using DLT in the field of proxy voting without completely reworking established business practices.

Alexander Chekanov, Enterprise Architect at NSD, the leader of the working group, says: “With this effort, we aim to provide clarity to the infrastructure operators and market participants in how to implement DLT-based solutions in their local markets and to create value associated with the technology. Proxy Voting has served as an excellent business case where the advantages are both visible and easy to achieve without causing a major disruption on the market. For NSD in particular, it is one of the many steps that we take to make Russian post-trade infrastructure more open and reliable for both the local market and internationally”.

Monica Singer, CEO of Strate, says: “Strate has always maintained that collaboration with key market players and experts leads to the successful implementation of industry-wide projects that add significant value to the markets. Distributed ledger technology has opened the doors to a new world of how people can transact and we’re excited to be an integral part of this journey, where we’re changing history. Together with other working group members, we have embraced this technology to improve the financial markets and are excited at the progress being made on proxy voting using distributed ledger technology”.

Javier Jara, Commercial and Legal Affairs Manager at DCV, says: For the Central Securities Deposit of Chile, it is very important to be part of this project as one of the representatives of Latin America, it implies being in the leadership of projects that use Blockchain technology for Securities Deposits. In particular, this project of Proxy Voting raised the common requirements to all markets, allowing the incorporation of extensions that adapt to other specific markets, so when this project reaches the Chilean market, will already be thought of local needs. We hope to continue working with our colleagues from other Central Securities Depositaries around the world, to increase in the collaboration and support in adaptations and developments in new technologies”.

The document has been produced by the working group during the period between October 2016 and April 2017 and involved collaboration between NSD, Strate (South African CSD), SIX Securities Services (European ICSD based in Switzerland), Nasdaq (CSD in Nordic and Baltic region) and DCV (CSD of Chile). The presentation to the ISSA Operational Committee in London on April 24th was the first public reveal of the document.

The group is continuing to work on the business case of proxy voting on DLT. Future updates of the document will be focused on:

  • business value distillation for infrastructure operators and market participants,
  • standardization and formal alignment with the existing market practices and ISO20022 standard,
  • extensions for more markets worldwide.

The latest version of the document is available online here.

The CSD Working Group on DLT welcomes any feedback or collaboration opportunities from potential partners. To get in touch with the working group, please contact one of the member organizations:

National Settlement Depository, Russia

Alexander Chekanov

chekanov.asatnsd.ru

Strate, South Africa

Tanya Knowles

tanyakatstrate.co.za

SIX Securities Services, Switzerland

Urs Sauer

urs.saueratsix-group.com

Nasdaq, Nordic

Henri Bergström

henri.bergstromatnasdaq.com

Depósito Central de Valores, Chile

Claudio Calderón

claudio.calderonatdcv.cl

 

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Finding what it takes to be a conscious company

Friday, May 12, 2017

Strate was named the winner of the Inaugural Conscious Companies Awards held at an evening gala event on 11 May in the northern suburbs of Johannesburg.

There has been much to be said about the inclusivity of stakeholders to create and nurture shared value, as opposed to shareholder value, says Strate CEO Monica Singer.  “Companies are typically seen as vessels with limited liability, no heart nor soul. However, to be acknowledged as a company that is recognized for bringing humanity to capitalism is amazing, because it shows that Strate has the heart and soul to make a fundamental difference in its ecosystem,” she says.

Given that the world is interoperable, Singer truly believes in Ubuntu and that ‘we are because you are’ and encourages businesses to recognize that they should be consciously making a positive impact to the stakeholders within the communities that they operate in.

Strate was named the winner of the Inaugural Conscious Companies Awards held at an evening gala event on 11 May in the northern suburbs of Johannesburg.

There has been much to be said about the inclusivity of stakeholders to create and nurture shared value, as opposed to shareholder value, says Strate CEO Monica Singer.  “Companies are typically seen as vessels with limited liability, no heart nor soul. However, to be acknowledged as a company that is recognized for bringing humanity to capitalism is amazing, because it shows that Strate has the heart and soul to make a fundamental difference in its ecosystem,” she says.

Given that the world is interoperable, Singer truly believes in Ubuntu and that ‘we are because you are’ and encourages businesses to recognize that they should be consciously making a positive impact to the stakeholders within the communities that they operate in.

Conscious companies, by their very definition, operate with a sense of higher purpose and recognise the inherent value of linking business success with the socio-economic upliftment of the rest of society. “Truly conscious companies understand the need to be authentic in what they do and in driving change for the greater good, showing that caring forms part of their DNA in everything that they do,” adds Singer.

Her desire to change the world led to the creation of a company that truly cares for and nurtures its employees. A company can create magic by caring for people, because those people will go on to achieve their form of greatness, creating ripples of change across society.

“Since its inception, Strate has made it our end goal to put the needs of the country first by embracing solutions that simultaneously transform and revolutionise markets and empower South Africans. We started by digitizing securities settlement in the financial market because it was in the best interest of South Africa’s financial markets.”

Prior to the birth of Strate, the country was ranked the worst emerging market for operational and settlement risk. Daily trades on the stock exchanged average 4000 in a day. The company has spent the past two decades building on those capabilities for the benefit of all South Africans, and as a result, South Africa is now rated among the top economies globally for financial market development and regulation of its exchanges. Trades average 280 000 on a bad day in today’s market. “Our philosophy has been to sell trust and its purpose has always been to serve the market for the greater good, in everything we do,” she explains.

Strate’s success has been underpinned by the spirit of collaboration. “Twenty years ago, we worked together with the financial market to transform the way things worked. Over the years, we have been working with various companies to boost financial literacy. Interestingly, companies like the Maharishi Institute and Thomson Reuters are some of those companies, and they have too been recognized as finalists in the Conscious Companies awards. Going forward, we are working with various parties locally and globally to embrace disruptive technologies and how it will change the lives of people for the better.”

75 companies were nominated for the award. Nominees were judged against the criteria listed below, where the company:
• understands what it takes to be authentic
• operates with a higher sense of purpose
• integrates the interest of all stakeholders
• develops visionary leaders
• builds a culture of trust, accountability, governance and caring
• encourages creativity and innovation
• is a responsible citizen in the communities that they operate in

Strate put forward its evidence for the criteria, with many examples of collaboration to create shared value. The company put forward its education initiatives across the board, conducive working environment for employees, as well as efforts to uplift the Africa and Middle East region. Further to this was examples of how it reinvests in the financial markets by way of its Special Purpose Reserve Fund, a fund that collects fines for non-compliance with Strate’s Rules and Directives that then pays for market education initiatives – from grass root to the highest degrees in finance at some prestigious South African universities.

Prof. Mervyn King, together with Nomahlubi Simamane, Vukani Magubane and Dr. Essop Pahad formed the panel of judges. They selected finalists for the awards in two categories: The NGO/NPO/NPC category as well as Company category.

The winners in the NGO/NPO/NPC category were Afrika Tikkun, an organisation which is chaired by Singer. The Maharishi Institute’s Imvula Empowerment Fund was named the runner up.

The winner of the Company category was Strate, and Belgotex Floor Coverings was named the runner up.

“We would like to commend all companies recognized in the awards and others across the continent that share similar values. It reflects that we walk this journey together to secure a future that will bring prosperity to all,” concludes Singer.

 

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The future of South Africa’s capital markets: Far from lacklustre

Monday, May 8, 2017

South Africa has one of the most sophisticated financial markets and has earned a reputation for its sound financial market development. Looking to the next five years, A2X Markets CEO and co-founder Kevin Brady believes the market could become more dynamic and efficient as new exchanges are granted licences.

A2X Markets was officially granted its licence by the Financial Services Board in April 2017, becoming the country’s fourth licenced South African exchange and Strate’s newest client. During an interview at A2X’s offices in the heart of Sandton, Johannesburg, Brady had an informative discussion with Strate to describe his company’s business model and settlement cycle.

 

South Africa has one of the most sophisticated financial markets and has earned a reputation for its sound financial market development. Looking to the next five years, A2X Markets CEO and co-founder Kevin Brady believes the market could become more dynamic and efficient as new exchanges are granted licences.

A2X Markets was officially granted its licence by the Financial Services Board in April 2017, becoming the country’s fourth licenced South African exchange and Strate’s newest client. During an interview at A2X’s offices in the heart of Sandton, Johannesburg, Brady had an informative discussion with Strate to describe his company’s business model and settlement cycle.

He explained that A2X, as an alternative exchange, would bring modern technology and the latest business techniques to an industry that’s been around for hundreds of years. “A2X will target many of the largest companies currently listed on the JSE, to secondary list on A2X. It will then offer brokers material discounts to transact in these shares, while maintaining the high standard of regulation as set by the Financial Market Act,” he says, while describing the exchange’s business model. By way of an example, he explained the secondary listing principal is well established in South Africa and is the same as a dual listing, where a company has a primary listing on the London Stock Exchange, such as Anglo America and BHP Billiton, and a secondary listing on the JSE.

A2X’s model fits into the current capital markets structure, including adopting a familiar T+3 post-trade settlement cycle. “With that, we understand how vital it is to have a renowned and reliable settlement infrastructure, which is why we appointed Strate as the Central Securities Depository for A2X. Strate is open for business and it has been very welcoming of new exchanges.”

Beverley Furman, the Managing Executive of CSD Operations, a division of Strate, adds, “This is a very exciting time for our financial markets. As an investment destination, South African capital markets are unique in the sense that they operate on developed first-world infrastructure and the market is well regulated.” A testament to the regulation of the country’s stock exchanges is the ranking highlighted in the 2016-2017 World Economic Forum’s Global Competitiveness Index, which has placed South Africa as the third best ranked country globally (among 138 developed and developing nations) for the regulation of securities exchanges.

Furman concludes that Strate is proud to be part of this journey and to be recognized as the independent, trusted service provider within the market. “We are delighted to welcome A2X as the newest player to the South African capital markets and as Strate’s newest client.”

 

 

 

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South African Children to Benefit from Unused Shares and Bonds

Tuesday, March 7, 2017

Post the national Budget Speech, we would be ignorant to think that changes to taxes and consumables made by Minister Pravin Gordhan will not change the way we look at our financial portfolios and budgets. And with this comes some reassessing and a spring-clean. This exercise may reveal to investors that they have a small percentage of undesirable shares and bonds that they may wish to donate to a securities donation programme rather than undergoing the tedious process of selling, given that these securities are often more costly to sell than they are worth. Not only does this provide investors with a tax benefit, it also makes a significant change in the recipient’s life.

Post the national Budget Speech, we would be ignorant to think that changes to taxes and consumables made by Minister Pravin Gordhan will not change the way we look at our financial portfolios and budgets. And with this comes some reassessing and a spring-clean. This exercise may reveal to investors that they have a small percentage of undesirable shares and bonds that they may wish to donate to a securities donation programme rather than undergoing the tedious process of selling, given that these securities are often more costly to sell than they are worth. Not only does this provide investors with a tax benefit, it also makes a significant change in the recipient’s life.
 
“Optimising your investment portfolio should be a priority; and it is on this premise that we founded the Strate Charity Shares (SCS) programme. Ultimately, this solution was borne by realising there was a need to address the long-standing problem of investors holding on to small and undesirable shares and bonds, whether they are in certificate or electronic form.” says Monica Singer, CEO, Strate.
 
Prior to the SCS programme, investors who wanted to dispose of their unwanted shares were discouraged by the cost of selling them; and as a result, thousands of Rands were tied up in assets that cost more to sell than they were worth.
 
The programme allows investors to cash in their shares and all proceeds received are donated to a wide range of charities across South Africa, all of which focus specifically on the special care of children. Over the years, Strate Charity Shares has managed to distribute in excess of R6 million to a number of worthy causes, changing the lives of these children, by providing them with food, shelter, necessities and education.
 
“The donations serve over eight charities that have historically been the recipients of these donations,” says Singer. “We would like to extend our appreciation to all those involved in making a change in a child’s life through SCS. We also want to encourage more and more South Africans to donate their unwanted shares and get involved in this worthy cause,” continued Singer.
 
Clients can get involved by contacting SCS, either directly, or through their broker, to donate their shares. They can also 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.
 
 
 
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Strate extends its services to a new exchange as ZAR X goes live

Monday, February 20, 2017

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. 

 

 

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.

 

Click here to view a video of Strate and ZAR X

Click on image to view video: Strate welcomes ZAR X

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.”

 

http://www.strate.co.za/sites/default/files/sites/all/default/files/IMG_2360.JPG

Strate's Beverley Furman (Left) and Gregory Naicker (Right) with ZAR X CEO Etienne Nel (Centre)

 

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Strate from the Ground

Monday, January 30, 2017

For the past 19 years Strate, South Africa’s Central Securities Depository, has focused on settling securities transactions across South Africa’s financial markets. The organisation is also placing a core focus on financial literacy through its consumer education initiative, Strate from the Ground.

For the past 19 years Strate, South Africa’s Central Securities Depository, has focused on settling securities transactions across South Africa’s financial markets. The organisation is also placing a core focus on financial literacy through its consumer education initiative, Strate from the Ground.

According to Dr Merrill van der Walt, Data Scientist at Strate, one of the key elements for Strate from the Ground is to educate communities on the basics of banking and financial matters (a knowledge area that is seriously lacking in marginalised areas), as well as meeting nutritional needs in a disadvantaged community that is food insecure. “The lack of food security is a huge problem for South Africans in rural areas and those of lower socio-economic standing.”

According to a report issued by Statistics South Africa on poverty trends in the country, poor households spend approximately a third (33%) of their income on food. Total food expenditure for poor households is given at R8 485 per annum or R707 per month. It is important to understand that this figure is the proportion that households are able to spend on food. Given current food prices, it is clear that this amount is not enough to secure a sufficient and nutritious variety of food.

“Adding to this harsh backdrop is the bleak reality of constantly rising food and fuel prices, high-energy tariffs and increasing interest rates. These conditions have placed severe pressure on ordinary South Africans who are already struggling to meet their basic household needs”, says Dr van der Walt. With projects such as these, people will be more empowered and educated to make better decisions in accessing basic needs as well as handling their finances.

“At Strate, we embrace innovation and change. The term ‘innovation’ is difficult to define, and although most models centre on technology driven innovation and competitive focus, there is a social dimension to innovation and the role of social interaction,” says Dr van der Walt. “Social innovations are new strategies, concepts, ideas and organisations that meet the social needs of different elements which can be from working conditions and education to community development and health.”

Strate has partnered with several organisations that will make it possible to provide nutritious and organic produce to approximately 50 labourers on a monthly basis while equipping farmers and schools in the area with the practical guidance on finance and banking.

 

   

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‘Liquidity Alliance’ builds blockchain solution for cross-border collateral transfer

Wednesday, January 18, 2017

  • Four international CSDs develop a Blockchain prototype in cooperation with Deutsche Börse
  • Targeted ‘LA Ledger’ solution to provide fast and efficient mobilisation of collateral 

Four members of the ‘Liquidity Alliance’ (LA), an international group of central securities depositories (CSDs), are cooperating with Deutsche Börse to launch an initiative leveraging blockchain technology to ease cross-border mobilisation of security collateral. With the planned solution, The Canadian Depository for Securities Limited (CDS), Clearstream (Luxembourg), Strate (South Africa) and VPS (Norway) want to overcome existing hurdles when moving collateral across various jurisdictions, making the transfer faster and more efficient.

Following the financial crisis, regulators increasingly require market participants to provide collateral to mitigate risks in the financial system. The Dodd-Frank Act in the U.S. and EMIR in the EU are two important frameworks in this regulatory overhaul leading to a growing demand for high-quality collateral to which access is limited. CSDs are already supporting the market today with real-time collateral management to ensure that exposures can be covered sufficiently and that local collateral can be quickly transferred where it is needed.

Being jointly provided by regulated market infrastructures, the Distributed Ledger Technology (DLT) based ‘LA Ledger’ prototype will enable a centralised, faster and more efficient allocation of fragmented security positions to cover financial obligations of market participants in multiple jurisdictions. The decentralized character of DLT (blockchain) allows for direct interaction between participants giving it the potential to simplify complex processes.

The ‘LA Ledger’ will initially be implemented as a prototype based on the Hyperledger Fabric blockchain. Validation by regulatory authorities and market participants will start in the second quarter of 2017.

“With this initiative, we pursue an innovative partnership approach that will allow us to jointly embark on distributed ledger technology with a use-case that is highly relevant to the wider industry”, said Glenn Goucher, President and Chief Clearing Officer, CDS.

“LA Ledger is designed to simplify cross-border collateralisation away from using multiple complex and non-standardised links towards smooth movement across various jurisdictions”, added John-Arne Haugerud, CEO VPS.

“We look forward to engaging with regulators and market participants to validate the proposed solution”, added Monica Singer, CEO Strate. “We are convinced that integrating this new technology into a permissioned environment of neutral regulated entities is the right way forward.”

“We are proud to be part of this exciting LA Ledger initiative which is adding another leading edge solution to our award-winning suit of collateral management services to the benefit of our mutual clients”, commented Philippe Seyll, Co-CEO Clearstream Banking S.A. at Deutsche Börse Group.

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Rob Barrow appointed Chairman of Strate

Friday, November 11, 2016

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

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 on 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

Ms Marilyn Ramplin

Mr Murray Stocks

Ms Nicky Newton-King

Mr Nigel Payne

Mr Raymond Ndlovu

 

 

Alternate Directors

Mr Charl Bruyns

Mr Ryan Proudfoot

 

 

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Winners of the Finance and Investment Management Olympiad Announced

Wednesday, October 19, 2016

The Finance and Investment Management Olympiad (FIMO) is an initiative of the Finance and Investment Management Department at the University of Johannesburg (UJ), focused on Grade 10, 11 and 12 learners in high schools across all nine provinces. Earlier today, a group of prestigious individuals were awarded as winners of the second annual FIMO. 

The Finance and Investment Management Olympiad (FIMO) is an initiative of the Finance and Investment Management Department at the University of Johannesburg (UJ), focused on Grade 10, 11 and 12 learners in high schools across all nine provinces. Earlier today, a group of prestigious individuals were awarded as winners of the second annual FIMO.

This initiative, which was formed in partnership with Strate (Pty) Ltd, places emphasis on learners to unleash their potential in a dynamic field within the financial services industry. “Individuals who take part in the FIMO have a specific interest in the finance discipline and the Olympiad gives them the exposure to key financial concepts that will enable them to pursue a future in the financial markets,” says Monica Singer, Strate’s CEO.  “It starts with the basic steps of debunking financial terminology and important concepts and further provides the necessary knowledge of the industry as a whole. Strate enjoys partnering on initiatives such as this, which create awareness of the financial markets at grass-root level. We are proud to be part of this initiative and the lives of the learners as they start their journey within the industry.”

This FIMO also provides more insight into the finance and investment industry and offers essential prizes to further allow the learners to further their studies in their respective field within the industry.

The final round of the Olympiad was written on 2 August 2016. The 2016 FIMO winners were:

Public Schools

Private Schools

Grade 12

Grade 12

1st Place – M Banda, Wendywood

1st Place – J Hart, Redhill High

2nd Place – P Manyathela, Capricorn High

2nd Place – R Trusler, Redhill High

Grade 11

Grade 11

1st Place – P Visage, Huguenot High

1st Place – M Francis, Hatfield Christian School

2nd Place – L Mncube, Ladymsith High

2nd Place – N Sithole, UJ Metropolitan High

Grade 10

Grade 10

P Ramotala, Thomas Mofolo

B Simelane, Horizon International High

The topic areas that form part of the FIMO include:​

  • Economics
  • Financial Literacy: Saving and borrowing
  • Financial Markets and Instruments
  • Financial Math
    • Interest Rates
    • Risk and Return
  • Time value of money
  • Financial Statements
  • Financial System

“Encouraging finance and investment skills within students makes them empowered to contribute and increase the growth of the South African economy”, adds Singer. “Strate would like to congratulate all the winners and participants of the FIMO 2016 and wish you all the best of luck for the year ahead."

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Strate Processed Largest Corporate Action in its History

Friday, October 14, 2016

Strate successfully processed the electronic entries which enabled the conclusion of the acquisition of SABMiller by Belgian-Brazillian group, Anheuser-Busch InBev; the largest corporate action in its 18-year history. Shareholders received in excess of R116-billion in cash entitlements, executed through the South African Reserve Bank.

Strate successfully processed the electronic entries which enabled the conclusion of the acquisition of SABMiller by Belgian-Brazillian group, Anheuser-Busch InBev; the largest corporate action in its 18-year history. Shareholders received in excess of R116-billion in cash entitlements, executed through the South African Reserve Bank.

“Since the Competition Commission’s approval of the merger a few short months ago, we have been in consultation with both the listed entities’ legal teams, corporate advisors, and transfer secretaries to offer our guidance on how to best manage the process,” says Strate CEO, Monica Singer. “I am incredibly proud of my team and our partners for their dedication and hard work – this merger represents the largest, and probably one of the most historic equity corporate actions that we have ever executed.”

In order to successfully process the deal, and to operate within Belgian law, AB InBev was dissolved to create Newbelco, a Belgian incorporated company formed for the purpose of the transaction. This surviving entity, Newbelco, acquired all of the SABMiller shares. Newbelco will be the holding company for the combined group, and is also listed on the Johannesburg Stock Exchange. AB InBev announced that the combined group will retain the name “Anheuser-Busch InBev SA/NV”.

The R1.5 trillion merger between AB InBev and SABMiller has created the world’s biggest brewer. 

 

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After Brexit, will a BRICS-it multilateral financial system be next?

Wednesday, September 28, 2016

Geneva – There is no doubt that the Central Securities Depositories community has evolved through the various partnerships that have been forged over the decades. While countries are leaving regional unions, such as Brexit, CSDs belonging to the BRICS nations continue to come together in the spirit of collaborating for the greater benefit of the financial markets.

Geneva – There is no doubt that the Central Securities Depositories community has evolved through the various partnerships that have been forged over the decades. While countries are leaving regional unions, such as Brexit, CSDs belonging to the BRICS nations continue to come together in the spirit of collaborating for the greater benefit of the financial markets.

Speaking at a panel discussion at the Sibos event in Geneva in September 2016, the CEO of South African CSD Strate, Monica Singer, explains that as a BRICS member, South Africa, continues to seek collaborative and knowledge-sharing opportunities with other countries to introduce innovation and ultimately profile these markets as an investment destination.

“There are strong networks and relationships among CSDs across BRICS, as well as internationally. They share information with one another to further develop their markets and proactively implement solutions to become more resilient, and at the same time, to keep up with the exponential rate of technological change. CSDs across the world share a greater vision of how systemic risk can spread, and when they work together in harmony, they achieve risk mitigation,” she says, adding that “CSDs as financial market infrastructures best serve their clients and the financial markets when they collaborate.”

According to Singer, CSDs are expected to keep up with the pace, be innovative and embrace new technologies – all while remaining resilient and focusing on their core services. “CSDs have been known to be resilient through crises, so they cannot lose sight of their core services and current client needs. They must continue to maintain a central role to provide exchange of value settlement systems, operational efficiency and transparency for the safe functioning and long-term viability of the markets. On the other hand, CSDs also need to assist their clients and the market to introduce new disruptive technologies and keep at the forefront of international best practices and trends.”

Distributed ledger technology (DLT), as an example of disruptive technology, has emerged as a relatively new and rapidly-growing innovative technology, and is set to revolutionise the financial markets and fundamentally create a paradigm shift. With a large number of Fintechs investing in blockchain and DLT, Singer believes that CSDs too have a role to play within this ecosystem to add value to their clients in the financial markets. “There is the potential for financial markets to create a distributed ledger that settles securities transactions, so financial market infrastructures need to embrace the technology and identify opportunities that will add value to their stakeholders.”

Shortly after her panel discussion, Strate and the National Settlement Depository (NSD) , which is a Russian CSD, announced that they have signed a Letter of Intent to forge a partnership to develop solutions that utilise DLT, with the first use case focused on proxy voting. This stands testament to the collaboration that has already begun among BRICS nations to introduce new concepts and solutions to a multilateral financial system.

“At the end of the day, it’s about the investor and the needs of the financial markets. In the face of innovation, cyber security threats, greater regulatory requirements, and protecting investors, CSDs need to come together with a common purpose to make a difference, by helping their clients keep up with the pace, future-proof the risks and provide value-adding services. Collaboration is crucial to the future stability and sustainability of the financial market.”

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CSDs Sign Letter of Intent to Collaborate on Initiatives using Distributed Ledger Technology

Tuesday, September 27, 2016

The Central Securities Depositories (CSDs) Strate, South Africa and NSD, Russia have signed a Letter of Intent at the Sibos event in Geneva in September 2016.

The intention is to forge a partnership between the two CSDs to develop solutions utilizing Distributed Ledger Technology (DLT) with the first use case focused on proxy voting. The parties believe that through industry-wide collaboration, CSDs will be better positioned to face the changes presented by DLT technology and develop innovative solutions for the benefit of the financial market.

 

The Central Securities Depositories (CSDs) Strate, South Africa and NSD, Russia have signed a Letter of Intent at the Sibos event in Geneva in September 2016.

The intention is to forge a partnership between the two CSDs to develop solutions utilizing Distributed Ledger Technology (DLT) with the first use case focused on proxy voting. The parties believe that through industry-wide collaboration, CSDs will be better positioned to face the changes presented by DLT technology and develop innovative solutions for the benefit of the financial market.

DLT, which has emerged as a relatively new and rapidly growing innovative technology, is set to revolutionise the financial markets and fundamentally create a paradigm shift. Given that there is the potential for financial markets to create a distributed ledger that settles securities transactions, financial market infrastructures need to embrace the technology and identify opportunities that will add value to their current clients.

This relationship allows both parties to explore opportunities for mutual cooperation in the post-trade settlement arena including:

* Information sharing regarding standards, regulations and DLT technologies.

* The exploration of solutions that are of mutual benefit to both CSDs; as well as

* Potential cost savings through the sharing of technology and development costs.

A number of other CSDs have expressed interest in joining the partnership and Strate / NSD have welcomed these discussions.

Monica Singer, CEO of Strate, says "It is an important time for CSDs to be working together to define the future landscape in the DLT environment. Strate looks forward to developing this long-standing and valuable relationship with NSD to develop solutions for emerging market CSDs".

Eddie Astanin, chairman of the executive board, NSD comments “We believe that the securities settlement and custody industry is one of the promising sectors where we can use new technologies. I think that post-trading may become the starting point of transition of the distributed ledger technology and blockchain from theory to practice. In 2015, we began research and initiated new developments; since that time we have developed valuable expertise in this sphere, and now we are eager to share it with our colleagues. “

In April 2016, National Settlement Depository was one of the first financial organizations in the world that announced the development of a blockchain-based prototype of e-proxy voting.

Mr. Astanin added that “fast development of technologies and the huge number of startups that enter the market every month is a challenge of our time for major companies. We have to be one step ahead of everyone else and to use the opportunities we have now. Only the united efforts of the largest players in our industry will enable them to respond to new challenges and integrate new technologies.”  

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Strate to launch new brand and logos

Monday, September 5, 2016

South African Central Securities Depository (CSD) Strate, will be launching its new brand and accompanying logos tomorrow, reflecting the evolution of the company and its new strategy.

A little over a month ago, we announced that Strate was embarking on a new journey, creating two divisions within the company, CSD Operations and Fractal Solutions. The changes in the company’s structure are needed to support a new strategy that embraces disruptive technologies and continuous evolution of Strate’s core business.

South African Central Securities Depository (CSD) Strate, will be launching its new brand and accompanying logos tomorrow, reflecting the evolution of the company and its new strategy.

A little over a month ago, we announced that Strate was embarking on a new journey, creating two divisions within the company, CSD Operations and Fractal Solutions. The changes in the company’s structure are needed to support a new strategy that embraces disruptive technologies and continuous evolution of Strate’s core business.

The new energy within the business required a fitting personality that captured the essence of pioneering technological innovation and evolving its core business, which resulted in a rejuvenation of the brand and a move away from the purple colours that Strate has worn for almost two decades.

Strate CEO, Monica Singer, says, “It has always been my intent to make a difference in South Africa, providing innovative solutions that truly bring benefits to the players in the financial markets. Strate has always sought technology that can make a difference, which is why the tagline of ‘Always Discovering’ couldn’t be more fitting.”

According to Singer, Strate wants to use its 18-year foundation of trust to continue building the strength and resilience of the core business, while driving growth opportunities and advanced technologies across new markets.  “It is an exciting time to be an employee of Strate, and this new brand and logo reflect our enthusiasm and focus on serving our customers and markets. The new look better represents where the company is today and embraces our vision for the future. I am glad we can share our journey with you and I am excited for what the future holds.” 

 

Click here to view a video about the new corporate identity.

 

 

 

 

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The Evolution of Strate: A New Structure to Better Serve Stakeholders

Friday, July 22, 2016

Strate is embarking on a new journey that will enhance its service delivery to the market.  We have created two divisions within the company, CSD Operations and Fractal Solutions. The changes in the company’s structure are needed to support a new strategy that embraces disruptive technologies and continuous evolution of our core business.

Strate is embarking on a new journey that will enhance its service delivery to the market.  We have created two divisions within the company, CSD Operations and Fractal Solutions. The changes in the company’s structure are needed to support a new strategy that embraces disruptive technologies and continuous evolution of our core business.

Beverley Furman has been appointed as the Managing Executive of CSD Operations, and Tanya Knowles as the Managing Executive of Fractal Solutions, both effective 1 August 2016. Monica Singer will continue at the helm as CEO of Strate (Pty) Ltd, ensuring that the two divisions co-exist and thrive for the current and future benefit of Strate and the South African financial markets. The other existing divisions will continue to service the whole company and also report to Monica Singer.

Beverley Furman will leave STRATE Supervision to her very capable successor, Beverley Muir, who has been managing the division alongside Beverley Furman for the past 12 years.

To view Monica’s official stakeholder communication, which describes the changes to Strate’s Executive Committee, click here.

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African Bank events successfully executed by Strate

Monday, April 11, 2016

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ZAR X announces Strate partnership

Tuesday, April 5, 2016

ZAR X, South Africa’s first new stock exchange in more than 100 years, has named Strate Pty Limited as its provider of clearing and settlement services.

ZAR X, South Africa’s first new stock exchange in more than 100 years, has named Strate Pty Limited as its provider of clearing and settlement services.
 
ZAR X is scheduled to begin operations in September and offers simple, fast and affordable platforms for corporate listings and share trading, with strong focus on the market in restricted equity offerings, primarily black empowerment securities. It is the first stock exchange to receive conditional approval from the South African authorities under the Financial Markets Act.
 
ZAR X’s first milestone after receiving its conditional licence from the Financial Services Board was to announce its partnership with Strate, South Africa’s central securities depository.
 
A key factor in the relationship has been the close collaboration in the development of T+0 settlement, or same day settlement of trades, minimizing the time-lag between matched trade and settlement and clearing into an investor’s account. The ZAR X approach also mitigates settlement risk as transactions are pre-funded.
 
Etienne Nel, CEO of ZAR X, commented: “We are delighted to be partnering with a reputable partner like Strate – the ideal operator to provide our clearing and settlement services because of its proven track record and its trusted and independent third-party status.
 
“Strate has made T+0 settlement possible for our clients, which is significantly shorter than the current T+5 turnaround on offer.”
 
As a Financial Market Infrastructure (FMI), the role of Strate is to be a trusted third party that operates a world class clearing, settlement and asset servicing systems for the direct benefit of the financial market it services. Strate enables the issuance of securities and the maintenance of secure records of ownership. Further, Strate strengthens the market and plays a critical role in ensuring financial stability, promoting transparency, and bringing efficiencies and liquidity into the market.
 
CEO of Strate, Monica Singer:  “ZAR X will benefit from the same robust infrastructure that is in place for the clearing and settlement of trades. Strate will collaborate with ZAR X to ensure that their systems can fully integrate into its clearing and settlement platforms prior to going live.  This demonstrates that Strate is open for business and is in a position to create innovative and responsive services in the interest of a common goal: to grow and enhance the liquidity and sustainability of the financial system in South Africa. We look forward to building an ongoing and sustainable relationship with ZAR X.”
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Strate implements new Money Markets settlement system on TCS BaNCS Market Infrastructure

Tuesday, February 16, 2016

Strate is pleased to announce that as of Monday 15 February 2016, its new system for the settlement of money markets securities is fully operational. The new system, which utilises the Market Infrastructure solution from the TCS BaNCS product suite by Tata Consultancy Services (TCS), was selected for being a world-class CSD solution for the electronic settlement of securities.

Strate is pleased to announce that as of Monday 15 February 2016, its new system for the settlement of money markets securities is fully operational. The new system, which utilises the Market Infrastructure solution from the TCS BaNCS product suite by Tata Consultancy Services (TCS), was selected for being a world-class CSD solution for the electronic settlement of securities.

The implementation of money markets is the first project to be launched using the TCS BaNCS product suite and forms part of a wider programme where Strate will replace its IT infrastructure for all asset classes. The Bonds and Equities asset classes will be switched over at later stages using a phased approach.

The new TCS BaNCS infrastructure offers the market a streamlined service, as multiple systems are consolidated into one. With the new system, Strate will also be in a position to offer more innovative products to the market in a much shorter time. 

In addition, workforce productivity is expected to improve, as there is reduced need for users to learn and work on multiple applications.

Commenting on the implementation of TCS BaNCS, Monica Singer, CEO of Strate, said: “Strate is committed to continuous innovation and to bringing efficiencies and world-class IT infrastructure to the financial markets in South Africa. We are proud to have launched the first phase successfully and look forward to bringing the other asset classes onto the system in the near future.”

About Strate

As a South African Central Securities Depository (CSD), Strate is licensed to be an independent provider of post-trade products and services for the financial markets. Strate is internationally recognised as a Financial Market Infrastructure (FMI) that is trusted to use its state-of-the-art technology, international expertise and sound risk management framework to support and promote the safety and efficiency of the financial markets.

Strate provides electronic settlement for securities - including equity, bond and derivative products (such as warrants, Exchange Traded Funds (ETFs), retail notes and tracker funds) for Africa’s largest stock exchange, the JSE, as well as money market securities for the South African market and equity instruments for the Namibian Stock Exchange. It has collateral management and a corporate actions product range available within its portfolio of value-added services and Strate provides services to issuers for their investors in terms of the Companies Act (2008) and the Financial Markets Act (FMA) (2012).

Visit Strate’s website www.strate.co.za for more information.

About Tata Consultancy Services Ltd. (TCS)

Tata Consultancy Services is an IT services, consulting and business solutions organization that delivers real results to global business, ensuring a level of certainty no other firm can match. TCS offers a consulting-led, integrated portfolio of IT, BPS, infrastructure, engineering and assurance services. This is delivered through its unique Global Network Delivery Model™, recognized as the benchmark of excellence in software development. A part of the Tata group, India’s largest industrial conglomerate, TCS has over 344,000 of the world’s best-trained consultants in 46 countries. For more information, visit us at www.tcs.com.

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Strate first to launch Legal Entity Identifier (LEI) Services in South Africa

Friday, February 5, 2016

A committee of global regulators, The Regulatory Oversight Committee (ROC), has endorsed Strate to offer Legal Entity Identifier (LEI) services to entities in South Africa. Strate is a licenced Central Securities Depository (CSD) that provides post-trade products and services to the financial markets.

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The Liquidity Alliance Now Able to Extend Collateral Management Services to Buy-side via 360T

Wednesday, November 11, 2015

  • Service enables the buy-side to trade triparty repos with banks on 360T platform as collateralised alternative to unsecured cash deposits.
  • Service already offered by Clearstream and 360T, will be made available to all members of The Liquidity Alliance
  • The collateral management of the triparty repos is done in a fully automated, white-labelled manner by The Liquidity Alliance.
  • The availability of the service in the markets of The Liquidity Alliance members will be subject to local regulatory conditions and demand from the buy-side.

The buy-side and non-financial institutions are increasingly seeking collateralised alternatives to unsecured cash deposits as they have a heightened counterparty and concentration risk awareness following the financial crisis. The current low interest rate environment is also making cash deposits less attractive.

Triparty repos are a safer alternative to unsecured cash deposits. An additional advantage of triparty repos for the buy-side is that they will be able to re-use the securities they received as collateral for other purposes such as central counterparty margining.

The buy-side and non-financial institutions are increasingly seeking collateralised alternatives to unsecured cash deposits as they have a heightened counterparty and concentration risk awareness following the financial crisis. The current low interest rate environment is also making cash deposits less attractive.

Triparty repos are a safer alternative to unsecured cash deposits. An additional advantage of triparty repos for the buy-side is that they will be able to re-use the securities they received as collateral for other purposes such as central counterparty margining.

The Liquidity Alliance, including ASX (Australia), Cetip (Brazil), Clearstream (Luxemburg), Iberclear (Spain) and Strate (South Africa), will be able to meet this demand by giving the buy-side an option to collateralise triparty repos with banks through 360T, a platform for foreign exchange and money markets trading.

Buy-side customers will be able to trade triparty repos via the same 360T frontend they use for FX and other money market trades. After confirmation on the platform, all relevant data will automatically be routed straight through to the collateral service of the local member of The Liquidity Alliance, hence minimising the back-office burden and operational risks.

Mathew Kuppe, Managing Director, 360T Asia Pacific, commented: “360T already has buy-side customers in all domestic markets of members of The Liquidity Alliance. The Liquidity Alliance will now have the option to offer these customers the benefit of collateralised trading which was previously only available to financial institutions, via an integrated front end.”

360T has been in a partnership with Clearstream to offer triparty repo trading for banks and the buy-side via the Global Liquidity Hub since 2013. The acquisition of 360T in October 2015 by Deutsche Börse Group, of which Clearstream is a member, now enables Clearstream to extend its joint services with 360T to all members of The Liquidity Alliance in a white-labelled manner. The Liquidity Alliance members will independently review local regulatory conditions and demand from the buy-side for the service. 
 

 

About The Liquidity Alliance

The Liquidity Alliance was formed in 2013 by five market infrastructures:

  • ASX, a financial infrastructure in Australia;
  • Cetip, a central securities depository specialising in OTC derivatives, in Brazil;
  • Clearstream, the German central securities depository and Luxembourg-based international central securities depository;
  • Iberclear, the central securities depository in Spain;
  • Strate, the central securities depository in South Africa.

Associated members of the Liquidity Alliance:

  • CDS, the central securities depository in Canada;
  • SGX, a financial infrastructure in Singapore;
  • VPS, the central securities depository in Norway.

The Liquidity Alliance is made up of financial market infrastructures which share and develop common collateral management solutions to address the growing global need for more collateral. They collaborate to create opportunities for their customers and for the wider industry while promoting best practices in liquidity and collateral management. The Liquidity Alliance encourages greater pan-industry cooperation through the promotion of expert insight and research as well as though conferences and events.

Media contact Liquidity Alliance Australia (ASX Group, Sydney)

Matthew Gibbs, +61 2 9227 0218
matthew.gibbsatasx.com.au

Media contact Liquidity Alliance Luxembourg (Clearstream, Luxembourg)

Patrick Kalbhenn +49 69 211 14730
patrick.kalbhennatdeutsche-boerse.com

Media contact Liquidity Alliance Brazil (Cetip, São Paulo)

Daniela Norcia Gonçalves, +55 11 311 11984
danielanorciaatcetip.com.br

Media contact Liquidity Alliance Spain (Iberclear, Madrid)

Oscar Moya, +34 91 589 1286,
omoyaatgrupobme.es

Media contact Liquidity Alliance South Africa (Strate, Johannesburg)

Tanya Knowles, +27 11 759 5317
tanyakatstrate.co.za

Media contact 360T

Claudia Stirner, +49 69 900 289 112
claudia.stirnerat360t.com

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Corporate Actions Payments can Now be Processed through the South African Reserve Bank

Tuesday, October 13, 2015

On 5 October 2015, Strate implemented a new solution to process corporate action payments via the South African Reserve Bank (SARB). Strate has been working closely with issuers, local banks and the SARB to implement this new solution.

Strate is pleased to report that during the week of 12 October 2015, five corporate actions payments valued at R1.2 billion were processed seamlessly via the SARB.

On 5 October 2015, Strate implemented a new solution to process corporate action payments via the South African Reserve Bank (SARB). Strate has been working closely with issuers, local banks and the SARB to implement this new solution.

Strate is pleased to report that during the week of 12 October 2015, five corporate actions payments valued at R1.2 billion were processed seamlessly via the SARB.

The processing of payments via central bank funds improves liquidity management, mitigates certain risks in the market and provides numerous benefits. These include:

  • Improved cash flows through the elimination of unnecessary intermediate steps and the costs associated with this;
  • Greater stability within the financial market, as payments using central bank funds rather than commercial bank funds carry a much lower risk profile; and
  • Efficiencies within the payment process. Once the funds have been released into the SARB’s South African Multiple Option Settlement (SAMOS) system, there will no longer be timing differences in respect of the receipt of funds by each of the CSD Participants.

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 new processes will continue to be offered for the forseeable future. Issuers are, however, encouraged to approach the Strate relationship team to explore the benefits that this new solution offers them.

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First Bonds Donated to Strate Charity Shares

Wednesday, September 30, 2015

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.

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 http://www.strate.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 charitysharesatcomputershare.co.za.

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Tri-Party Repo: Future-Proofing Risk and Cost for Corporate Treasurers

Tuesday, August 4, 2015

As a Tri-Party Collateral agent in the South African Market, Strate’s Collateral Management Services (SCMS) is well positioned to manage all of these new challenges for corporate treasurers, with its proven world-class systems and service, facilitating both cash and non-cash collateral for collateralised loans as well as Tri-Party repos.

Tri-Party repos are becoming an increasingly more attractive mechanism for corporates to replace cash deposits to mitigate against credit counterparty risk. However, this concept needs to be sold to management.” This was the common theme noted by over 80% of delegates in two separate conferences held during 2015 by Strate, in conjunction with the Association of Corporate Treasurers of Southern Africa (ACTSA), and Strate’s global Tri-Party collateral partner, Clearstream Banking S.A. (a subsidiary of the Deutsche Borse Group).

As a Tri-Party Collateral agent in the South African Market, Strate’s Collateral Management Services (SCMS) is well positioned to manage all of these new challenges for corporate treasurers, with its proven world-class systems and service, facilitating both cash and non-cash collateral for collateralised loans as well as Tri-Party repos.

Tri-Party repos are becoming an increasingly more attractive mechanism for corporates to replace cash deposits to mitigate against credit counterparty risk. However, this concept needs to be sold to management.” This was the common theme noted by over 80% of delegates in two separate conferences held during 2015 by Strate, in conjunction with the Association of Corporate Treasurers of Southern Africa (ACTSA), and Strate’s global Tri-Party collateral partner, Clearstream Banking S.A. (a subsidiary of the Deutsche Borse Group).

Under Basel III regulations, banks receive a capital benefit by placing collateral against short-term deposits from a corporate counterpart. Moreover, under Tri-Party repo arrangements, cash deposits will no longer have to be spread across multiple banks to mitigate credit counterparty risk, as larger deposits can now be placed with a single bank, secured by non-cash collateral.

It is no surprise then that the local market sentiment is in line with global trends and corporate treasurers acknowledge that accepting and placing collateral is future best practice.
The delegates provided some interesting industry insights, such as:

  • Over 60% of respondents believed cash was not always invested properly;
  • Over 96% of respondents would prefer to secure cash deposits with collateral to generate a higher yield;
  • Over 90% of respondents believed that the costs of financing trades will increase with new regulations in the banking and insurance sectors; and
  • Collateral requirements for financing trades will increase and over 60% believed that non-cash collateral will play a key role over the expensive use of cash collateral.

Future challenges for corporate treasurers: 

Considering the flexibility, control and security that a repo transaction provides, and the growth of the Tri-Party repo market for corporates in Europe, sentiments are that “repos are here to stay.”

SCMS provides an online platform for corporates to use, which seamlessly integrates to underlying systems if need be. Daily mark-to-market, automated valuations, automatic margin calls and reporting are some of the many key features that come standard with the SCMS offering.

SCMS is able to efficiently manage collateral in this ever-changing market, and more importantly, is well equipped to ensure that the right collateral is used to cover the right exposure at the right time at the right place.

The services are free for receivers of non-cash collateral, such as corporates for term deposits, and Strate’s dedicated support desk is available to resolve any collateral-related queries. For more information contact us on collateralatstrate.co.za or visit the Strate website at www.strate.co.za.

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In 2016 – A Collateral Odyssey

Thursday, July 30, 2015

A global demand for high-quality liquid assets, as a result of regulatory reform, may drive a change in the way that assets are used as collateral in each market. In order to obtain an understanding of these implications on the future collateral management landscape in the South African Market, advisory firm Deloitte performed an independent review of the current collateral management processes and practices to determine the potential impact on high-quality liquid assets due to the many regulatory changes to be implemented over the next three to five years.

A global demand for high-quality liquid assets, as a result of regulatory reform, may drive a change in the way that assets are used as collateral in each market. In order to obtain an understanding of these implications on the future collateral management landscape in the South African Market, advisory firm Deloitte performed an independent review of the current collateral management processes and practices to determine the potential impact on high-quality liquid assets due to the many regulatory changes to be implemented over the next three to five years.

In order to prepare an impact analysis of these regulatory changes, Deloitte investigated the current collateral management process within a local bank and assessed the risks and potential costs associated with how collateral is currently placed and received.

According to the study, they highlighted the following issues:

  • The manually intensive nature of collateralising across exposure types such as securities lending and borrowing, over the counter (OTC) derivatives and repo transactions;
  • The risk of ‘locking up collateral’ resulting from collateral ‘silos’;
  • Margin and collateral valuation discrepancies between counterparties;
  • Accurate and timely concentration risk management across organisational silos, where collateral received doesn’t breach group concentrations;
  • The opportunity costs of placing predominately cash as collateral versus non-cash collateral;
  • A lack of the necessary market standards and automation to efficiently manage non-cash collateral across counterparties;
  • The surrender rights of posted collateral;
  • An inability to accurately identify the location of collateral as well as the discovery that there are currently limited mechanisms in place which enable the tracking of collateral re-use; and
  • Non-cash collateral moves on a T+1 basis, often with waiting periods for returns.

Their report, issued during mid-2015, analysed the potential future liquidity pressures expected from the beginning of 2016 as a result of the combined implementation of increased Basel III ratios, mandatory clearing of OTC derivatives, Solvency Assessment Management for insurance companies and increased margin requirements under a T+3 equities settlements cycle.  These requirements are set to become more onerous year-on-year across the market for a variety of institutions.

The multi-billion rand question, ‘will there be enough collateral to meet these requirements from 2016 and beyond?’ The study echoes many other studies on this topic, in that there is probably enough high-quality collateral in the market to meet these requirements. However, collateral is often not used efficiently or at the best cost. As a market, these costs are not only isolated to banks, as these regulations will start increasing the cost of collateralised transactions across the board, making securities financing transactions more expensive.

 

 

 

Although collateral management arrangements are bilateral in nature between two counterparts, each counterpart will potentially have more agreements between themselves and other counterparts. Thus, all counterparts, and counterparts of counterparts, face similar challenges across exposure types.

Since this is clearly a market challenge, the market as a whole needs greater visibility of what collateral is available to be placed and received, as well as what collateral is available for reuse. The efficient mobilisation of the ‘cheapest-to-deliver’ collateral is essential to ensure the right collateral is placed against the right exposure at the right time and place. This requires a market-wide view of collateral along with market standards, increased automation and centralisation of collateral pools. This is the domain of a Tri-Party collateral agent.

Considering the current collateralisation issues and the anticipated challenges to collateralise in the near future, the introduction of a proven, world-class Tri-Party Collateral Service in the South African Market could prove essential. According to the study, the use of a Tri-Party agent, such as Strate’s Collateral Management Services, has the potential to achieve an increased efficiency of between 80% to 90% in managing collateral and a saving of between 20% to 30% in operating and funding costs through efficient market-wide collateral optimisation and mobility.

The inevitable requirement to increase the use of non-cash collateral will introduce a number of challenges, which are highlighted in the study. These challenges include the need for:

  • Greater automation of collateral processes and procedures;
  • The appropriate application of counterparty risk management (haircuts, tolerances, collateral triggers);
  • The tracking of collateral placed and reused;
  • Accurate collateral valuations;
  • Management of concentration risks across asset types, issuers, sectors, duration etc.;
  • Management of collateral substitutions;
  • Efficiently optimising and mobilising collateral;  and
  • Real-time inventory management.

As the only active Tri-Party collateral agent in the South African Market, Strate’s Collateral Management Services is well positioned to manage these challenges, with its proven world-class systems and service, which facilitates both cash and non-cash collateral. Strate is the ideal partner to assist you in managing your collateral in this ever changing odyssey.

For more information contact us on collateralatstrate.co.za or visit the Strate website at www.strate .co.za.

 

The above is an opinion Piece By Steve Everett, Senior Manager: Strate’s Collateral Management Services

 

 

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Strate Celebrates Cell C’s 13th Take a Girl Child to Work Day

Friday, May 29, 2015

Wednesday, 28 May 2015 marked the 13th Cell C Take a Girl Child to Work Day® annual campaign targeted at South African girl learners from grade 10 to grade 12. This year, Cell C announced that its Take a Girl Child to Work Day campaign attracted a record participation of more than 520 companies and various government departments nationally.

Under the theme Dream, Believe, Achieve, Strate showed its support toward the initiative and gave female pupils from Gauteng the opportunity to visit the company and experience various career opportunities available, as well as understand how the company operates.

Wednesday, 28 May 2015 marked the 13th Cell C Take a Girl Child to Work Day® annual campaign targeted at South African girl learners from grade 10 to grade 12. This year, Cell C announced that its Take a Girl Child to Work Day campaign attracted a record participation of more than 520 companies and various government departments nationally.

Under the theme Dream, Believe, Achieve, Strate showed its support toward the initiative and gave female pupils from Gauteng the opportunity to visit the company and experience various career opportunities available, as well as understand how the company operates.

After a brief breakfast and introduction to the company, the learners were taken through the importance of Occupational Health and Safety (OHS) in the workplace, understanding why they need to be employed by an organisation that looks after their safety as well. Strate has been recognised as an employer of choice over recent years, and it proved to the girls how it achieved this through the OHS discussion, as well as understanding the DNA of the company and how it measures its success using the organisation’s Bluprints methodology.  

Thereafter, they were introduced to employees who form part of this year’s Strate Mentorship Programme, who took them through a teambuilding exercise. The session ended with a motivational talk entitled ‘Dare to Dream’ to inspire the young women to achieve their hopes, dreams and goals and to never give up. This was then followed by a guided tour of the company, where groups of girls could engage with departmental representatives to ask them questions and receive guidance bout their career paths.

Strate would like to thank all the learners for visiting Strate. We trust they took away the knowledge and insight that they needed to prepare themselves when they enter the workplace.
 

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Never Settle for Anything Less

Thursday, May 28, 2015

In conjunction with the other financial market stakeholders, Strate chose at the outset to develop the most secure method of DvP possible – simultaneous, final and irrevocable Delivery versus Payment (SFIDvP) using the Central Bank, i.e. the South African Reserve Bank (SARB).

International standards (such as the CPSS-IOSCO Principles for Financial Market Infrastructures) clearly favour the use of central bank money in securities settlement models.

South Africa’s markets have provided SFIDvP through Strate and the SARB for over 17 years. Both parties provide integral elements in the processes that seek to ensure the stability of our financial markets. Given the efficiencies created and the mitigation of risk achieved, one shouldn’t even need to ask of the importance of settlement using SFIDvP in central bank funds.

One of the most significant risks that has plagued markets since the beginning of time has been that a seller would deliver their securities (equities, bonds, money market instruments), but would not receive payment in return, or that the buyer would make payment and will not receive what they had paid for.

This is referred to as Principal Risk.

The Knock-on Effects of Principal Risk

Today, the financial markets are certainly not immune to Principal Risk. In many ways, developments have made things more complex – with buyers and sellers of securities located further apart. Trading practices have changed and the electronic systems that are used have become more sophisticated, as the markets have sought to address other risks or issues faced.

In many instances, one has no idea who the counterparty is or where they are situated, let alone whether they are even in a position to fulfil their obligations in terms of the transaction. As a result, onus has been placed on a variety of intermediaries to manage these risks and provide others with assurance. The integration of systems across the intermediary chain means that the effective mitigation of Principal Risk (at an individual transaction level) is essential.

The consequences of hypothetically having a small percentage of transactions fail due to Principal Risk could have profound implications on the financial system. Should one financial institution be unable to meet its obligations, it will impact another institution’s ability to meet its own obligations as well…creating greater financial market contagion or systemic risk.

Delivery versus Payment (DvP): Designed to mitigate Principal Risk

Those challenges have resulted in the introduction of the concept of Delivery versus Payment (DvP), which is specifically designed to mitigate Principal Risk and protect against widespread contagion. DvP can be achieved in a number of ways, but even in this area, markets have evolved to allow for the efficient delivery of securities in exchange for cash.

For as long as we can remember, banks have provided us with a trusted service in respect of our money – and it is only when we physically require actual bank notes that we draw them out. If not, we rely on our ability to instruct our bank to transfer money safely and efficiently through the banking system to an appointed recipient.

Similarly, the first Central Securities Depository (CSD) was created just over 40 years ago and was designed to provide a trusted service in respect of securities, using its independent, secure environment in which the ownership (and transfer of ownership) of securities is recorded and maintained. The creation of a CSD to perform this function has become a critical component of the financial markets around the world, and South Africa is no different.

The Golden Triangle

The challenge for markets, however, is just how do the banks and the CSD interface with each other to ensure an effective DvP process. Regulators and practitioners around the world have long recognised that the ultimate DvP process also embodies the legal certainty that the final settlement of one obligation (say the cash movement) is contingent upon the final settlement of the other (the securities) and that these are both irrevocable at a point in time.

This process (often referred to as the Golden Triangle) is essentially:

  • For the CSD to reserve (or block) the securities that have been sold in its system;
  • For the CSD to then instruct the bank (appointed by the buyer) to transfer the funds to the sellers’
  • account; and finally
  • For the reservation on the securities to be lifted and the securities moved from the transferring party to the recipient party, thereby transferring ownership of the securities to the recipient.

Additional protection for investors – SFIDvP

One of South Africa’s Financial Market Infrastructures is the Central Securities Depository, Strate. In conjunction with the other financial market stakeholders, Strate chose at the outset to develop the most secure method of DvP possible – simultaneous, final and irrevocable Delivery versus Payment (SFIDvP) using the Central Bank, i.e. the South African Reserve Bank (SARB).

Why the Central Bank?

Commercial banks perform multiple roles in the market (such as taking deposits and granting credit to their clients) and this exposes them to credit and liquidity risks. The Central Bank, on the other hand, has the lowest possible credit risk exposure in any given market.

By Strate interfacing directly with the South African Multiple Options System (SAMOS) operated by the SARB, SFIDvP has become one of the cornerstones of our market.Both credit and liquidity risks are significantly reduced because of the risk profile of both the SARB and Strate as the CSD. Not only does the SARB have the lowest possible credit risk exposure in any given market, every transaction that is processed through its South African Multiple Options System (SAMOS) is collateralised, adding additional layers of security.

In addition, Strate only deals with operational risk and is not exposed to counterparty credit risk. This provides both local and foreign investors with a measure of comfort in the settlement process that has been rated at one of the best in the world. With the value of securities settlements exceeding R2 trillion on a monthly basis, a large portion of which can be attributed to the bond / debt market where liquidity is essential, it clearly highlights the important role that Strate plays in the mitigation of Principal Risk and the promotion of financial market stability.

Alignment to International Standards

The settlement model implemented by Strate has been affirmed time and again, as international standards (such as the CPSS-IOSCO Principles for Financial Market Infrastructures) clearly favour the use of central bank money in securities settlement models. Principle 9 of the Principles for Financial Market Infrastructures states that a “Financial Market Infrastructure should conduct its money settlements in central bank money where practical and available.”

Many markets around the world have not yet achieved this particular standard and are now having to earnestly re-assess their settlement models to establish just how they can achieve something that is fast becoming a ‘not negotiable’ requirement designed to protect the investor.

Conclusion

South Africa’s markets have provided SFIDvP through Strate and the SARB for over 17 years. Both parties provide integral elements in the processes that seek to ensure the stability of our financial markets. Given the efficiencies created and the mitigation of risk achieved, one shouldn’t even need to ask of the importance of settlement using SFIDvP in central bank funds.

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Strate Maintains its B-BBEE Level against the Financial Sector Charter

Monday, May 4, 2015

Strate is pleased to have maintained its Broad-Based Black Economic Empowerment (B-BBEE) rating of a Level 3 after it was measured against the Financial Sector Charter (FSC).

 

Strate is pleased to have maintained its Broad-Based Black Economic Empowerment (B-BBEE) rating of a Level 3 after it was measured against the Financial Sector Charter (FSC).

In the 2015 B-BBEE Audit, Strate received an overall recognition level of 137.50%. The score was based on Strate’s 2014 Audited Financial Statements.

As from 1 January 2014, Strate complied with the binding industry-specific codes within the Financial Sector Charter (FSC) that were gazetted under Section 9(1) of the Act. These take precedence over any other codes, such as the Codes of Good Practice (CoGP).

Strate continues to achieve good results by meeting most of the B-BBEE targets through new programmes and a sound understanding of the principles that drive transformation. During 2015, Strate will align itself with all the new B-BBEE Act requirements and implement best practice solutions once approved by the Board of Directors.

To view its new B-BBEE certificate, click here.

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iValue Entrepreneurship Programme Bears Fruit

Wednesday, April 22, 2015

Johannesburg - The shortlist of the learners participating in the final phase of the iValue Entrepreneurship Programme has been announced.

Nineteen grade 11 learners from Kwena Molapo High School near Lanseria addressed a panel of four judges on 17 April 2015, using their newly acquired knowledge of business management and entrepreneurship to develop their feasible ideas. Over recent months, they had formed groups to work hard on their ideas and present them to the panel with the hopes of being selected to receive start-up capital for their business plans. Two of these groups – Matrix Play and iHealth – were announced as the winners. Matrix Play will be an internet service provider to learners at their school, while iHealth aims to accelerate living a healthy life style for schoolchildren.

Johannesburg - The shortlist of the learners participating in the final phase of the iValue Entrepreneurship Programme has been announced.

Nineteen grade 11 learners from Kwena Molapo High School near Lanseria addressed a panel of four judges on 17 April 2015, using their newly acquired knowledge of business management and entrepreneurship to develop their feasible ideas. Over recent months, they had formed groups to work hard on their ideas and present them to the panel with the hopes of being selected to receive start-up capital for their business plans. Two of these groups – Matrix Play and iHealth – were announced as the winners. Matrix Play will be an internet service provider to learners at their school, while iHealth aims to accelerate living a healthy life style for schoolchildren.The iValue Entrepreneurship Programme, initially launched in 2014 as a pilot project, was targeted at a group of grade 10 learners with the aim to have at least five of the learners become entrepreneurs within the next five years.

With the help of second year students completing their Diplomas on Small Business Management at the University of Johannesburg, the learners have spent the past year developing their skills. Learners have been empowered to understand and apply entrepreneurial knowledge, skills and principles in their entrepreneurship projects, as well as identify viable entrepreneurial opportunities within their communities.

According to Carole Podetti Ngono, the Founder and Managing Director for the Valued Citizens Initiative, “The learners now have the entrepreneurial spirit and skillset to implement their business ideas successfully. Over the coming months, they’ll be afforded the opportunity of gaining real-world experience of running a business and forming relationships with stakeholders.”

As one of the Programme’s sponsors, South African Central Securities Depository Strate strongly believes the iValue initiative is aligned to government’s important objectives of addressing youth unemployment to foster sustainable economic growth. “Not only is South Africa confronted with high levels of unemployment, there is also an increasing number of discouraged work seekers among young people. Only some 7% of successful grade 12 learners in South Africa find employment in the formal sector. There is an urgent need for the promotion of entrepreneurship as a potential solution to youth unemployment, which is why initiatives such as the iValue Entrepreneurship Programme are vital. It enables young people to empower themselves, so that they can successfully contribute to the economy and inspire the people around them to follow in their steps and nurture their own entrepreneurial spirit,” explains Tanya Knowles, the Head of Strate’s Project Innovation and Business Services Division.

To ensure that the Programme continues to be sustainable, the learners will be tracked over a five-year period to ensure the successful implementation of their business ideas. Key Performance Indicators will be developed and measured on an annual basis. These measures will include operational areas, such as profits margins, growth of the business, job opportunities created, contracts with vendors, marketing exposure and sustainability.

Following the success of the pilot programme, the Valued Citizens Initiative will continue to search for learners to enrol in future iValue Entrepreneurship Programmes. The University of Johannesburg, Faculty of Management has also identified the need to tailor make a new programme and curricula to entrepreneurship. If successful it will be among the first tertiary institutions in South Africa to launch Bachelor in Entrepreneurship at undergraduate level.

“Learners who partake in the iValue programme will be afforded the opportunity to get a bursary to these new entrepreneurship programmes at UJ. In addition, the rest of South Africa or any prospective entrepreneurs will also be able to empower themselves and nurture their skills to become vital contributors to their own success, and in turn South Africa’s socio-economic development,” says Joyce Sibeko, Faculty Advisor for Enactus at the University of Johannesburg.

About Strate

As South Africa’s Central Securities Depository (CSD), Strate is licensed to be the independent provider of post-trade products and services for the financial markets. Strate is internationally recognised as a Financial Market Infrastructure (FMI) that is trusted to use its state-of-the-art technology, international expertise and sound risk management framework to support and promote the safety and efficiency of the financial markets. 

Strate provides electronic settlement of equities and bonds transactions concluded on the Johannesburg Stock Exchange. It also settles transactions in money market securities and has recently introduced a collateral management service. Strate offers an asset servicing product range that augments the services it offers to issuers in terms of the Companies Act (2008) and the Financial Markets Act (FMA) (2012). 

Visit Strate’s website www.strate.co.za for more information.

About Valued Citizens Initiative

Valued Citizens Initiative is a non-governmental organisation founded in 2001 to answer the request of the Gauteng Department of Education to develop citizenship education in public schools. At Valued Citizens Initiative, we believe in creating a shift from the society we are in to the society we want, one young person at a time. 

Providing academic support programmes from Grade 4 to Grade 12 in public schools, we focus on self-development, leadership and citizenship education. Our life skills programmes enable our youth to develop as responsible valued citizens, engaging with our democracy and leading their lives with confidence. Valued Citizens Initiative today offers a holistic approach working with parents, social workers and teachers as the pillars of our society and our children being learners, youth at risk and children in conflict with the law.

Visit Valued Citizens Initiative’ website www.valuedcitizens.co.za and Facebook Page for more information.

About Enactus

Enactus is an international non-profit organisation that brings together student, academic and business leaders who are committed to using the power of entrepreneurial action to improve the quality of life and standard of living for people in need. Guided by academic advisors and business experts, the student leaders of Enactus create and implement community empowerment projects around the globe. The experience not only transforms lives, it helps students develop the kind of talent and perspective that are essential to leadership in an ever-more complicated and challenging world.

To know more about Enactus, visit its website: www.enactus.org.

 

Media Contacts | Strate

Tanya Knowles

+27 (0)11 759 5317

tanyakatstrate.co.za

Nicole de Matos

+27 (0)11 759 5405

Nicoledatstrate.co.za

Media Contacts | Valued Citizens Initiative

Carole Podetti Ngono

+27 (0)11 781 9462

+27 (0)82 441 9154

founderatvaluedcitizens.co.za

 

 

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Strate to Reduce Fees on Tax Free Savings and Investment Accounts

Tuesday, April 7, 2015

National Treasury is reforming non-retirement savings in South Africa via tax-free savings accounts.

Tax-free savings and investment accounts are savings products on which no income tax, capital gains tax or dividend withholdings tax will be charged. The idea, which was first introduced in the 2012 Budget Review, aims to encourage household savings and to increase the overall level of savings in the economy.

However, these accounts were launched at the beginning of March 2015. To support this initiative, Strate is lowering its Contract Note Fee for these tax-free savings accounts and investments by 67%. 

National Treasury is reforming non-retirement savings in South Africa via tax-free savings accounts.

Tax-free savings and investment accounts are savings products on which no income tax, capital gains tax or dividend withholdings tax will be charged. The idea, which was first introduced in the 2012 Budget Review, aims to encourage household savings and to increase the overall level of savings in the economy.

However, these accounts were launched at the beginning of March 2015. To support this initiative, Strate is lowering its Contract Note Fee for these tax-free savings accounts and investments by 67%. 

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Strate Enhances its Risk Management Capabilities with Intelligent Documentation

Tuesday, March 24, 2015

A brand is one of the important components within a company’s reputation management strategy. South African central securities depository, Strate, recognises its investment in its reputation, seeking to own a brand that aligns to its message of instilling trust and confidence among its stakeholders in the financial market.

A brand is one of the important components within a company’s reputation management strategy. South African central securities depository, Strate, recognises its investment in its reputation, seeking to own a brand that aligns to its message of instilling trust and confidence among its stakeholders in the financial market.

Brand consistency and the efforts to maintain quality and control of the corporate identity, through centralised brand management, ensure compliance and cost savings.
In a two-month project in which CompuBrand, a Britehouse software business unit, standardised and made 15 intelligent document templates for Strate, the central securities depository deepened its own compliance, risk mitigation and credibility.

Strate is internationally recognised as an independent financial market infrastructure (FMI) providing custody, settlement and data services to stakeholders. In the process, it contributes to South Africa’s standing as an investment destination of choice.

Owned by South Africa’s big four banks, the Johannesburg Stock Exchange and Citibank, Strate uses state-of-the-art technology, its international expertise and its risk management framework to support and promote the safety and efficiency of the country’s financial markets.

The company provides electronic settlement of equities and bond transactions concluded on the Johannesburg Stock Exchange. It also settles transactions in money market securities and has recently introduced a collateral management service. It offers an asset servicing product range that augments the services it offers to issuers in terms of the Companies Act (2008) and the Financial Markets Act ((FMA) 2012).

The need

“As with most companies, however, in spite of its business and technological sophistication, Strate had an Achilles heel with regard to its corporate documentation,” says Julia Coulson, founder and director of CompuBrand, a company that provides software solutions for managing brand standards and content within documents and electronic communication, also creating intelligent and automated MS Office documents.

“There is a tendency to think that branding on letterheads, proposals, e-mails, and other documents in daily use is simply a hygiene factor; that consistency of the way the branding is applied across all documents is a nice to have rather than a direct contributor to the bottom line, to risk mitigation, and to corporate integrity.

“In fact, if you don’t have a system whereby employees are prevented from applying the corporate identity in random ways and whereby governance factors, such as the list of directors and company registration, are strictly controlled, then your company is at both financial and compliance risk.

“Strate recognised this and set about putting in place a system of templates that would enforce the correct use of its corporate information on documentation and maintain its corporate identity in the correct and desirable form.”

The solution

The templates, created by Compubrand in Microsoft Office, have been rolled out over all of Strate’s Word, Excel, and PowerPoint instances. They have been loaded into SharePoint, which Strate uses as its Intranet, and the company’s 150 employees have been trained on how to access and use them.

The business benefits

Strate’s head of project innovation and business services, Tanya Knowles, says that although CompuBrand has proprietary software that enables organisations to put on their users’ screen a ribbon from which they can then access and use templates, as a relatively small company, Strate did not feel the need for the full system.

“For us, as an FSB licensed entity, the main business benefit we were looking for was the ease of governance in our corporate documentation, and we got this from CompuBrand’s capabilities.

For instance, having the assurance that our list of directors would always be up to date on letterheads, or that disclaimers in presentations would be correct, helps us mitigate our own risk.

“It also helps to underpin our risk-management framework, which sits at the core of every service that we provide to the market. Our corporate image and identity is no different and we have to keep walking the talk.

“In that context, CompuBrand gave us the significant additional business benefit of consistent branding across our corporate documentation and communications. We refreshed our brand earlier this year and CompuBrand enabled us to roll out the latest corporate identity within our communication formats and across our applications. Obviously, in terms of marketing collateral, this kind of consistency is important for a number of reasons. In our industry, however, consistency is essential to creating confidence in our products and services.

“CompuBrand also customised their products and services to our budget – and our timelines. And, overall, they have enabled us to maintain our corporate document governance and branding with very few resources.”

The process

Samantha Joubert says it was possible to complete the creation of the Eligibility templates in only two months, because of the commitment and close involvement of Strate’s team. “We were briefed in-depth and accurately at the beginning, and feedback during the project was immediate and relevant. When a client is that involved, a project goes very smoothly.”

CompuBrand provides assistance to Strate, when required for template updates, on a time and materials basis, as defined in a service level agreement.

This press release was issued on 24 March 2015 by the Brighthouse Group via ITWeb’s Virtual Press Office. 

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Liquidity Alliance Implements Next Generation of Customer Connectivity

Wednesday, November 12, 2014

The Liquidity Alliance, the global association of market infrastructures delivering collateral management services to their markets through a common platform, has announced the implementation of a new customer connectivity solution. The new interface was developed on the basis of experience and feedback received from clients using the underlying collateral management solution since its introduction in 2011.

The Liquidity Alliance, the global association of market infrastructures delivering collateral management services to their markets through a common platform, has announced the implementation of a new customer connectivity solution. The new interface was developed on the basis of experience and feedback received from clients using the underlying collateral management solution since its introduction in 2011. 

The ongoing need for market participants to adopt their collateral management to new regulatory rules and changing business models led the Liquidity Alliance to significantly upgrade its customer connectivity solution. The new front-end will deliver enhanced transparency and further advanced management tools for the collateral transactions included in the services of the Liquidity Alliance members. In addition, there will be much more flexibility to dynamically adopt the solution to new customer needs surfacing over time.

Having been the first entity to adopt the Liquidity Alliance collateral management solution back in 2011, Cetip, the Brazilian central securities depository, is currently preparing the launch of the new connectivity interface in November 2014 as a pilot for the entire Liquidity Alliance. The other Liquidity Alliance members ASX (Australia), Clearstream (Luxembourg and Germany), Iberclear (Spain) and Strate (South Africa) are also part of the subsequent roll-outs which will bring the benefits to customers across the globe from 2015 onwards.

Fabio Zenaro, Products and Business Executive Manager at Cetip, said: “We led the way by implementing the system in 2011 and we have developed with Clearstream a pioneering solution that is a blueprint for other market infrastructures across the globe. With over three years of experience in operating our collateral service for Brazil, we consider very important to continue bringing innovation to our clients.”

Stefan Lepp, Member of the Executive Board and Head of Global Securities Financing at Clearstream, said: “Being part of the Liquidity Alliance with its global reach has enabled us to understand customer requirements even better and to define superior solutions to service their needs together with our partners. As the technical solution provider, Clearstream is pleased to deliver the next generation of customer connectivity which will bring benefits to all current and future Liquidity Alliance members and their clients.”

 

About the Liquidity Alliance

The Liquidity Alliance was formed in 2013 by five market infrastructures:

  • ASX, a financial infrastructure in Australia;
  • Cetip, a central securities depository specialising in OTC derivatives, in Brazil;
  • Clearstream, the German central securities depository and Luxembourg-based international central securities depository;
  • Iberclear, the central securities depository in Spain;
  • Strate, the central securities depository in South Africa.

Associated members of the Liquidity Alliance are:

  • CDS, the central securities depository in Canada;
  • SGX, a financial infrastructure in Singapore;
  • VPS, the central securities depository in Norway.

Each of the Liquidity Alliance members are financial market infrastructures which are cooperating and developing collateral management solutions to address the growing present and future global needs for more collateral. Their main mission is to share information and ideas in order to create opportunities for their customers and for the wider industry while promoting best-practice in liquidity and collateral management. The Liquidity Alliance will encourage greater pan-industry partnership and cooperation through promotion of expert insight, ideas and research to be shared with industry peers, media and interested parties through communication activities such as conferences and events.

 

Media contact Liquidity Alliance Australia (ASX Group, Sydney)

Matthew Gibbs, +61 2 9227 0218

matthew.gibbsatasx.com.au

 

Media contact Liquidity Alliance Luxembourg (Clearstream, Luxembourg)

Nicolas Nonnenmacher, +352 24 336 115

nicolas.nonnenmacheratclearstream.com

 

Media contact Liquidity Alliance Brazil (Cetip, São Paulo)

Daniela Norcia Gonçalves, +55 11 311 11984

danielanorciaatcetip.com.br

 

Media contact Liquidity Alliance Spain (Iberclear, Madrid)

Oscar Moya, +34 91 589 1286,

omoyaatgrupobme.es

 

Media contact Liquidity Alliance South Africa (Strate, Johannesburg)

Tanya Knowles, +27 11 759 5317

tanyakatstrate.co.za

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Liquidity Alliance will Provide Worldwide Collateral Access to T2S

Thursday, November 6, 2014

When the European Central Bank’s pan-European settlement platform TARGET2-Securities (T2S) goes live in waves from 2015 to 2017, the Liquidity Alliance members will benefit from access to the future pan-European liquidity pool T2S will create. Streamlined settlement will integrate respective assets for smooth collateral management activities. Iberclear in Spain and Clearstream’s central securities depository (CSD) in Germany, Clearstream Banking AG, will act as the gateway into T2S for the entire Liquidity Alliance.

When the European Central Bank’s pan-European settlement platform TARGET2-Securities (T2S) goes live in waves from 2015 to 2017, the Liquidity Alliance members will benefit from access to the future pan-European liquidity pool T2S will create. Streamlined settlement will integrate respective assets for smooth collateral management activities. Iberclear in Spain and Clearstream’s central securities depository (CSD) in Germany, Clearstream Banking AG, will act as the gateway into T2S for the entire Liquidity Alliance.

The Liquidity Alliance will thereby add a global dimension to what the European Central Bank had conceived as a purely European project. T2S will not only make cross-border settlement and respective collateral flows in Europe more attractive, but will also boost collateral liquidity beyond and within Europe.

Jesús Benito, Chief Executive Office of Liquidity Alliance member Iberclear, the Spanish CSD, said: “The Liquidity Alliance's initiative of providing worldwide collateral access to T2S is a major milestone in its history. We are proud to be a key part of this new facility, which will allow all members to tap the huge collateral resources T2S will make available. In this way, we will be able to maximise the full potential of T2S, enhancing its capabilities and extending its reach at a time when the efficient access and use of collateral has become a priority."

The Liquidity Alliance, the global association of market infrastructures delivering collateral management services to their markets through a common platform, will offer this access to T2S when it extends its services beyond domestic markets to provide cross-border collateral mobilisation in real time. In other words, the Liquidity Alliance is planning to extend the offering to include offshore assets for the coverage of domestic exposures as well as to mobilise domestic assets for the coverage of offshore exposures.

The Liquidity Alliance has already developed concepts to use offshore collateral for the coverage of domestic exposures. This will also enable Liquidity Alliance members to use collateral their customers hold in T2S markets to cover exposures in their home markets. The Liquidity Alliance will deliver such cross-border solutions to overcome collateral fragmentation by using domestic collateral to cover international exposures and vice versa.

Monica Singer, Chief Executive Officer of Liquidity Alliance member Strate, the South African CSD, said: “We are very pleased with the prospect of having access to T2S for our collateral management offering. While we had already been following the project with interest from a distance, we did not think we could benefit directly. Our Liquidity Alliance membership now opens up a great opportunity to access T2S and we are confident it will greatly streamline the activities of our customers in Europe.”

When Clearstream connects to T2S in wave three on 12 September 2016, it will also make Eurobonds available on T2S. This means that Liquidity Alliance members will also be able to access this important asset class for their customers. Iberclear will connect to T2S in wave four.

T2S brings further advantages for collateral management: European domestic and international assets can be consolidated into a single pool of liquidity. As a result, Liquidity Alliance members will be able to seamlessly transfer collateral between CSD (T2S) accounts and ICSD accounts for their customers.

Clearstream has commissioned two studies to help customers make the most of T2S. A study by PricewaterhouseCoopers (PwC) in 2013 revealed that the benefits of T2S go far beyond increasing cross-border settlement efficiency. In addition to greater mobility of collateral, there is plenty of room for streamlining the custody chain and thus reducing risks therein.

Stefan Lepp, Member of the Executive Board and Head of Global Securities Financing at Liquidity Alliance member Clearstream, the (I)CSD, said: “Clearstream has long been at the forefront of uncovering hidden benefits of T2S for the market. We recognised its immense advantages early on and were one of the first infrastructures to join and to develop a clear T2S pricing strategy. It is only natural for us to not just bring the best of T2S to our customers but also to our global partners in the Liquidity Alliance.”

A 2014 study by Oliver Wyman revealed the T2S benefits banks can unlock by consolidating their securities and cash holdings in Europe directly with CSDs and central banks. Complementary case studies revealed that brokers, asset managers and banks could save between EUR 30 and EUR 70 million annually if they take timely action to delayer and consolidate assets across major T2S markets.

Thanks to the access to T2S via Iberclear and Clearstream, the Liquidity Alliance members will also reap these benefits for their customers which were previously only available to financial institutions in T2S markets.

 

About the Liquidity Alliance

The Liquidity Alliance was formed in 2013 by five market infrastructures:

  • ASX, a financial infrastructure in Australia;
  • Cetip, a central securities depository specialising in OTC derivatives, in Brazil;
  • Clearstream, the German central securities depository and Luxembourg-based international central securities depository;
  • Iberclear, the central securities depository in Spain;
  • Strate, the central securities depository in South Africa.

Associated members of the Liquidity Alliance are:

  • CDS, the central securities depository in Canada;
  • SGX, a financial infrastructure in Singapore;
  • VPS, the central securities depository in Norway.

Each of the Liquidity Alliance members are financial market infrastructures which are cooperating and developing collateral management solutions to address the growing present and future global needs for more collateral. Their main mission is to share information and ideas in order to create opportunities for their customers and for the wider industry while promoting best-practice in liquidity and collateral management. The Liquidity Alliance will encourage greater pan-industry partnership and cooperation through promotion of expert insight, ideas and research to be shared with industry peers, media and interested parties through communication activities such as conferences and events.

 

Media contact Liquidity Alliance Australia (ASX Group, Sydney)

Matthew Gibbs, +61 2 9227 0218

matthew.gibbsatasx.com.au

 

Media contact Liquidity Alliance Luxembourg (Clearstream, Luxembourg)

Nicolas Nonnenmacher, +352 24 336 115

nicolas.nonnenmacheratclearstream.com

 

Media contact Liquidity Alliance Brazil (Cetip, São Paulo)

Daniela Norcia Gonçalves, +55 11 311 11984

danielanorciaatcetip.com.br

 

Media contact Liquidity Alliance Spain (Iberclear, Madrid)

Oscar Moya, +34 91 589 1286

omoyaatgrupobme.es

 

Media contact Liquidity Alliance South Africa (Strate, Johannesburg)

Tanya Knowles, +27 11 759 5317

tanyakatstrate.co.za

 

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Strate, South Africa Selects TCS BaNCS for Multi-Asset Class Depository Operations, Expands Its Relationship with TCS

Wednesday, October 22, 2014

Tata Consultancy Services (TCS), (BSE: 532540, NSE: TCS), a leading IT services, consulting and business solutions organization, announced that its customer, Strate (The Central Securities Depository for the electronic settlement of financial instruments in South Africa) has selected the Market Infrastructure solution of TCS BaNCS for its equity and money market depository operations, further expanding the strategic relationship it has with TCS. Strate is also replacing its current bond system with TCS BaNCS Market Infrastructure.

Tata Consultancy Services (TCS), (BSE: 532540, NSE: TCS), a leading IT services, consulting and business solutions organization, announced that its customer, Strate (The Central Securities Depository for the electronic settlement of financial instruments in South Africa) has selected the Market Infrastructure solution of TCS BaNCS for its equity and money market depository operations, further expanding the strategic relationship it has with TCS. Strate is also replacing its current bond system with TCS BaNCS Market Infrastructure.
 
Boosting Strate’s leadership status in the market, this engagement reinforces the long-standing relationship that TCS has had with Strate as a trusted IT solutions partner. This solution will provide Strate with the ability to adopt multiple settlement models across asset classes, along with a flexible framework to cater for market-specific requirements designed to maximize settlement efficiency. In line with global trends, the solution will also provide comprehensive support for both nominee and beneficial ownership account structures.
 
Monica Singer, CEO, Strate (Pty) Limited, said that she has always maintained that Strate’s success has been built on collaboration and key strategic partnerships. “Since its inception over 15 years ago, Strate has been able to create one of the most advanced and highly rated CSDs in the world by partnering with global market experts, such as TCS.  TCS custom-built Strate’s equities system in 1998, as well as our money markets technology again in 2009. This partnership has now moved to the next level with the selection of the TCS BaNCS for Market Infrastructure, which will help us expand and grow our services with an even faster time to market in the future and enable us to explore other products and services that are being provided in other countries that are using the same technology. It will also introduce greater benefits to our market, where they can enjoy a streamlined service across all asset classes, as three systems will be consolidated into one. The benefit thereof is that fewer systems will need to be supported and CSD Participants will have fewer interfaces to maintain.”
 
R Vivekanand, Vice President, TCS Financial Solutions, said, “TCS has played a key role in the evolution of the settlement infrastructure and STP processes in the South African market, with Strate at its pivot. This new engagement enables us to provide a single solution across all asset classes handled by Strate, thereby increasing agility, ability to handle more products and reducing the total cost of ownership. We value our strong relationship with Strate, and look forward to helping Strate enhance its leadership position among the CSDs in the world.”
 
About Strate
 
As South Africa’s Central Securities Depository (CSD), Strate is licensed to be the independent provider of post-trade products and services for the financial markets. Strate is internationally recognised as a Financial Market Infrastructure (FMI) that is trusted to use its state-of-the-art technology, international expertise and sound risk management framework to support and promote the safety and efficiency of the financial markets. Strate provides electronic settlement for securities - including equity, bond and derivative products (such as warrants, Exchange Traded Funds (ETFs), retail notes and tracker funds) for Africa’s largest stock exchange, the JSE, as well as money market securities for the South African market and equity instruments for the Namibian Stock Exchange. It has collateral management and a corporate actions product range available within its portfolio of value-added services and Strate provides services to issuers for their investors in terms of the Companies Act (2008) and the Financial Markets Act (FMA) (2012).
 
Visit Strate’s website, www.strate.co.za, for more information.
 
About Tata Consultancy Services Ltd. (TCS)
Tata Consultancy Services is an IT services, consulting and business solutions organization that delivers real results to global business, ensuring a level of certainty no other firm can match. TCS offers a consulting-led, integrated portfolio of IT, BPS,infrastructure, engineering and assurance services. This is delivered through its unique Global Network Delivery Model™,recognized as the benchmark of excellence in software development. A part of the Tata group, India’s largest industrial conglomerate, TCS has over 300,000 of the world’s best-trained consultants in 46 countries. The company generated consolidated revenues of US $13.4 billion for year ended March 31, 2014 and is listed on the National Stock Exchange and Bombay Stock Exchange in India. For more information, visit us at www.tcs.com.
 
 
 
 
 
 
 
TCS Media Contacts:
 
Global: 
Email: pradipta.bagchiattcs.com 
Phone: +91 22 6778 9999
 
TCS Financial Solutions Media Contacts: 
 
Dennis Roman, Chief Marketing Officer
Email: dennis.romanattcs.com 
Phone: +1954 423 3560
 
Americas, Europe and UK
Email: sunil.robertattcs.com 
Phone: +1732 331 3084
 
APAC, India, Middle East & Africa 
Email: anjana.srikanthattcs.com 
Phone: +91 8067256963
 
 
 
Strate’s Media Contacts:
 
Tanya Knowles
Email: tanyakatstrate.co.za
Phone: +27 (0)11 759 5317
 
Nicole De Matos
Email: nicoledatstrate.co.za 
+ 27 (0)11 759 5405
 
 
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Building Financial Literacy in our Community

Tuesday, May 20, 2014

South Africa’s Central Securities Depository (CSD), Strate, has invested over R100 000 as part of its corporate social investment to build financial literacy among disadvantaged learners and teachers in its community.

South Africa’s Central Securities Depository (CSD), Strate, has invested over R100 000 as part of its corporate social investment to build financial literacy among disadvantaged learners and teachers in its community.

On 16 May 2014, Strate together with Full Value Financial Services launched a Financial Markets and Instruments course for eleven Grade 10 learners attending Vuleka Sekolo Sa Borokgo (VSSB), a school that caters for previously disadvantaged learners.

“The course content will be presented by SETA-accredited trainers over seven sessions made up of two hours per session, and it will empower learners and their teachers to make better financial decisions and understand the consequences of their actions. Both learners and teachers will attend the course, which will consequently enable them to empower the communities in which they live with what they have learnt,” says Tanya Knowles, Strate’s Head of Corporate Affairs.

VSSB Principal Dave Rossouw explains that the initiative is centred on educating the community how to be financially independent.  “The community’s financial literacy is of utmost importance to us, as well as to Strate and Full Value Financial Services, as the sponsors and trainers of the programme respectively. That is why we are also empowering eleven teachers as well and educating them on topics such as basic financial skills, retirement, estate planning, insurance, financing budgets and saving methods. They can then use this knowledge themselves and pass it on to others.”

Full Value Financial Services’ course facilitators include people who were former traders. As the accredited services providers, they will host the classes at VSSB from May until August 2014.

 

Notes to Editors

About Full Value Financial Services

Full Value Financial Services (Pty) Ltd is a Bankseta- registered financial training and consulting company. We focus on providing generic and customised workshops and internationally accredited courses (ACI) to a wide range of clients in the financial and banking industry.

We strive for excellence by adding VALUE, with an approach which is holistic and client specific. Our goal is to assist our clients in achieving their full potential, by providing financial training and consulting services that are professional, accurate, relevant and practical.

Visit Full Value Financial Services’ website http://www.fullvalue.co.za/wmenu.php for more information.

About Strate

As South Africa’s Central Securities Depository (CSD), Strate is licensed to be the independent provider of post-trade products and services for the financial markets. Strate is internationally recognised as a Financial Market Infrastructure (FMI) that is trusted to use its state-of-the-art technology, international expertise and sound risk management framework to support and promote the safety and efficiency of the financial markets.

Strate provides electronic settlement for securities - including equity, bond and derivative products (such as warrants, Exchange Traded Funds (ETFs), retail notes and tracker funds) for Africa’s largest stock exchange, the JSE, as well as money market securities for the South African market and equity instruments for the Namibian Stock Exchange. It has collateral management and a corporate actions product range available within its portfolio of value-added services and Strate provides services to issuers for their investors in terms of the Companies Act (2008) and the Financial Markets Act (FMA) (2012).

Visit Strate’s website www.strate.co.za for more information.

About Vuleka Sekolo sa Borokgo (VSSB)

VSSB is a non-profit, independent school, a member of ISASA and registered with the Gauteng Department of Education.  Established in 1993, VSSB consists of a co-educational independent Middle School (Grades 8, 9 & 10), and a Matric Centre (Grades 11 & 12). 

All of the prescribed learning areas are offered at the Middle School where we strive to develop a work ethic in our learners that enables them to function in a strong academic environment. Many learners proceed to their FET studies in grade 10 at the Matric Centre on corporate scholarships. The focus of the Matric Centre programme is to provide top academic education and development in Maths, Science and English Home Language. A limited number of other mainstream subjects are offered to complete the curriculum.

It is the mission of the school to meet the needs of the community we serve (economically disadvantaged black pupils) by providing excellent, affordable education.

Visit VSSB’s website http://www.ssb.za.net/ for more information.

 

Media Contacts

Tanya Knowles

+27 (0)11 759 5317

tanyakatstrate.co.za

 

Nicole De Matos

+27 (0)11 759 5405

nicoledatstrate.co.za

 

 

 

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Supporting the Success of South Africa’s Young Entrepreneurs through the launch of the iValue Entrepreneurship Programme

Friday, April 11, 2014

Valued Citizens Initiative launched iValue, an entrepreneurship programme that will give 20 grade 10 learners from Kwena Molapo High School near Lanseria a foundation of business management and entrepreneurship. During the second year, five learners with the best business plans overall can receive start-up capital from iValue’s sponsor, Strate. 

On Friday 11 April 2014, Valued Citizens Initiative launched iValue, an entrepreneurship programme that will give 20 grade 10 learners from Kwena Molapo High School near Lanseria a foundation of business management and entrepreneurship. On the second year, five learners with the best business plans overall can receive start-up capital from iValue’s sponsor, Strate. 

According to Strate’s Head of Corporate Affairs, Tanya Knowles, the iValue initiative is aligned to government’s important objectives of addressing youth unemployment to foster sustainable economic growth. “Small businesses drive economic growth, create employment and are sources of innovation. Given that South Africa is confronted with high levels of unemployment, we should focus on initiatives that enable people to empower themselves, so that they can successfully contribute to the economy and provide for their families in a sustainable manner. The iValue Programme is ideally suited to achieve the investment in skills and socio-economic development that aligns with Strate’s objectives.”

Carole Podetti Ngono, the Founder and Managing Director for the Valued Citizens Initiative, a non-profit organisation based in Johannesburg, explains that job creation in South Africa emanates for a large extent from entrepreneurs. “South Africa is confronted with an increasing number of discouraged work seekers among young people. There is an urgent need for the promotion of entrepreneurship as a potential solution to youth unemployment, which is why we are excited to launch as a pilot our iValue Programme.”

“The transfer of entrepreneurial knowledge and skills should be infused in the youth with the character of an entrepreneur in high schools, if young learners completing school are expected to participate meaningfully in economic activity,” adds Podetti Ngono.

Strate, which is South Africa’s licensed Central Securities Depository, will work in conjunction with partners of the initiative such as the University of Johannesburg and Aurik Business Incubator, who will help mentor the students and will assess their business plans to shortlist them to five feasible projects. The aim is for learners within the programme to use their newly acquired skills and compete to be afforded an opportunity to implement their business ideas successfully, while being exposed to the real-world experience of running a business and making the right connections.

Two groups will be formed to benefit from a competitive environment. With the Faculty of Management at the University of Johannesburg, four students in their first and final years of their Diplomas on Small Business Management will each support the growth of a group of ten learners respectively. Here, the learners will get to understand entrepreneurship and life skills. During the second year, each individual will have to present their business plans, five of which will be chosen to receive start-up capital that they will have to pay back at the end of the year.

Knowles concludes that iValue’s story of nurturing an enterprising spirit among young learners is one that needs to be acknowledged, given that only some 7% of successful grade 12 learners in South Africa find employment in the formal sector. “The future of our economy depends on how we raise and educate our youth. Therefore, the investment in education and skills transfer should be a non-negotiable item on every corporate agenda.”

   
 

About Strate

As South Africa’s Central Securities Depository (CSD), Strate is licensed to be the independent provider of post-trade products and services for the financial markets. Strate is internationally recognised as a Financial Market Infrastructure (FMI) that is trusted to use its state-of-the-art technology, international expertise and sound risk management framework to support and promote the safety and efficiency of the financial markets. 

Strate provides electronic settlement of equities and bonds transactions concluded on the Johannesburg Stock Exchange. It also settles transactions in money market securities and has recently introduced a collateral management service. Strate offers an asset servicing product range that augments the services it offers to issuers in terms of the Companies Act (2008) and the Financial Markets Act (FMA) (2012). 

Visit Strate’s website www.strate.co.za for more information.

About Valued Citizens Initiative

Valued Citizens Initiative is a non-governmental organisation founded in 2001 to answer the request of the Gauteng Department of Education to develop citizenship education in public schools. At Valued Citizens Initiative, we believe in creating a shift from the society we are in to the society we want, one young person at a time. 

Providing academic support programmes from Grade 4 to Grade 12 in public schools, we focus on self-development, leadership and citizenship education. Our life skills programmes enable our youth to develop as responsible valued citizens, engaging with our democracy and leading their lives with confidence. Valued Citizens Initiative today offers a holistic approach working with parents, social workers and teachers as the pillars of our society and our children being learners, youth at risk and children in conflict with the law.

Visit Valued Citizens Initiative’ website www.valuedcitizens.co.za and Facebook Page for more information.

 

Media Contacts | Strate

Tanya Knowles

+27 (0)11 759 5317

tanyakatstrate.co.za

 

Nicole de Matos

+27 (0)11 759 5405

Nicoledatstrate.co.za

 

Media Contacts | Valued Citizens Initiative

Carole Podetti Ngono

+27 (0)11 781 9462

+27 (0)82 441 9154

founderatvaluedcitizens.co.za

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Update on Strate’s Collateral Management Services

Wednesday, April 2, 2014

Strate’s Collateral Management Services is being made available to financial institutions, after successfully integrating Clearstream’s collateral management technology into its system during November 2013.

According to Strate’s Strategic Projects Director, Anthony van Eden, the objectives of a centralised collateral management service aligns to the views and recommendations of global regulators, who have been pushing towards greater risk management and transparency in the market following the global financial crisis.

 

Strate’s Collateral Management Services is being made available to financial institutions, after successfully integrating Clearstream’s collateral management technology into its system during November 2013.

According to Strate’s Strategic Projects Director, Anthony van Eden, the objectives of a centralised collateral management service aligns to the views and recommendations of global regulators, who have been pushing towards greater risk management and transparency in the market following the global financial crisis.

America, Europe and South Africa have introduced, or are in the process of incorporating, new capital requirement rules under Basel III for banks and Solvency Assessment Management for insurance companies. Basel III will also impose higher liquidity and capital requirements for banks, which coupled with the G20 recommendations and the Financial Markets Act’s margin requirements to move to central clearing of standardised over-the-counter derivatives, is expected to place greater pressure on the financial market to manage their high-quality collateral more effectively.

Furthermore, as clients become more concerned about the fungible nature of cash that is placed as collateral, there is a drive to pledge non-cash assets like securities rather than cash. This provides greater protection in the event of financial failure of their counterparty – particularly where collateral has been re-used. With the expected scarcity of high-quality liquid assets to place as collateral due to the regulatory changes, re-use of collateral will become even more important going forward.

Currently, institutions run collateral on a bilateral basis. This means that although there may be very efficient systems in place to manage bilateral relationships, there is not a centralised market view of collateral. In addition, each bilateral relationship may have differing operational and technical standards and requirements. The end result is that collateral mobility is affected and that collateral is not optimised across the market.

“The move to combine high-quality securities, such as government bonds and Top 40 equities, with cash as collateral will place pressure on the administration of non-cash collateral and the holistic management thereof,” explains van Eden.

Strate has introduced its white-labelled service from Clearstream, a subsidiary of the Deutsche Börse Group, which allows it to provide a proven collateral management service for South Africa. As the South African Central Securities Depository (CSD) for dematerialised bonds, equities and money market securities, Strate is perfectly positioned as an independent trusted third party to provide these collateral services to the financial markets, as a CSD doesn’t face market or principal risk, unlike the other tri-party collateral providers internationally.

Strate’s foray into these services also represent the first market-wide centralised collateral management service for the South African market. The Strate collateral management service is able to integrate with existing bilateral systems in order to best optimise collateral across the market and provide the necessary standardisation in order to maximise collateral mobility in the market.

A dedicated service team at Strate will facilitate all collateral service needs of clients while at the same time providing world-class automation of all non-cash and cash collateral requirements. A key feature is that once bilateral eligibility criteria are confirmed and exposures are submitted to Strate, the resultant selection and allocation of either pledged or ceded collateral is totally automated without any further client intervention.

Furthermore, this collateral is subject to automatic intra-day valuation, collateral top-up and reduction (where required). To touch on some of the technical issues, the benefits include the automated substitution in line with eligibility criteria (where collateral has been sold or needs to be replaced for corporate actions/capital events), market-wide optimisation with full tracking of all collateral placed, received and re-used.

The service will also manage concentration risk across issuers, asset classes, and sectors within asset classes, duration of fixed income securities and on an individual security level. Unauthorised re-use and sale of collateral placed is prevented by the system, while authorised re-use is tracked.

To find out more about Strate’s Collateral Management Services, view the collateral management page on Strate's website by clicking here.

 

 

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CSD Rules Amended to Align to Financial Markets Act

Friday, February 28, 2014

Strate’s regulator, the Financial Services Board (FSB), has approved the amendments to the Central Securities Depository (CSD) Rules to have them aligned to new legislation.

“Following the implementation of the Financial Markets Act, 2012 (FMA), the CSD Rules had to be adjusted to align to the new legislation as well as to the National Payment System Act and the Insolvency Act,” explains Maria Vermaas, the Head of Strate’s Legal & Regulatory Division.

Strate’s regulator, the Financial Services Board (FSB), has approved the amendments to the Central Securities Depository (CSD) Rules to have them aligned to new legislation.

“Following the implementation of the Financial Markets Act, 2012 (FMA), the CSD Rules had to be adjusted to align to the new legislation as well as to the National Payment System Act and the Insolvency Act,” explains Maria Vermaas, the Head of Strate’s Legal & Regulatory Division.

She explained that the section relating to Duties of Participants (within Section 5) had to be revised to include additional clauses, while the Accounts section (Section 6) was also modified to provide further clarity on the irrevocability of settlement instructions.

New sections have been added to the amended CSD Rules (Sections 15 and 16 respectively) for Complaints Procedures and Procedures for Management of Participant’s Insolvency Proceeding.

While the amended CSD Rules became effective the day they were published in the official Government Gazette, being 14 February 2014, there are a number of clauses that will only take effect on 13 May 2014. These are clauses 5.1.6, 5.1.8, 5.7.1 and 5.7.3.

The revised CSD Rules are available on the Regulatory Environment section of Strate's website. Click here to view the CSD Rules.

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The Benefits of Enhanced Corporate Actions Services

Wednesday, February 19, 2014

Strate was the sponsor of the Mergers & Acquisitions Sponsor category at the DealMaker of the Year Awards. Investec Bank and Java Capital won the two categories for deal value and deal flow respectively.

The 2013 Awards were presented at a gala dinner during February 2014 to recognise the achievements of South African corporate finance teams for their performance last year within four categories of advisers: Investment Advisers, Sponsors, Legal Advisers and Reporting Accountants. Strate has been a long-standing sponsor of the event.

Strate was the sponsor of the Mergers & Acquisitions Sponsor category at the DealMaker of the Year Awards. Investec Bank and Java Capital won the two categories for deal value and deal flow respectively.

The 2013 Awards were presented at a gala dinner during February 2014 to recognise the achievements of South African corporate finance teams for their performance last year within four categories of advisers: Investment Advisers, Sponsors, Legal Advisers and Reporting Accountants. Strate has been a long-standing sponsor of the event.

DealMakers tracks the merger and acquisition activity of JSE-listed companies, as well as the general corporate finance transactions undertaken by South African firms. Through a series of analyses and calculations, they then list who worked on the biggest value of deals and the largest number of deals. There is no doubt that the processing of corporate actions plays a crucial role for any merger and acquisition activity. Parties require timeous, efficient and accurate information across the corporate actions life cycle.

There is no doubt that the processing of corporate actions plays a crucial role for any merger and acquisition activity. Parties require timeous, efficient and accurate information across the corporate actions life cycle.

In an effort to meet clients’ needs, Strate launched a corporate actions product range, Strate Asset Servicing (SAS), which includes the flagship Equities Corporate Action Subscription Services (ECASS). It significantly enhances the processing of corporate actions, which are a critical and a high-risk part of the securities processing business. 

The intricacy associated  with such events continues to make the corporate actions arena one of the most complex post-trade activities to manage. ECASS provides a single sourced, sacrosanct, standardised format of information that exists for a corporate actions announcement. It allows market players and investors to make quick and accurate decisions from the simultaneous dissemination and processing of information across the market, without interference from downstream parties and systems.

Currently in the South African market, corporate actions information is disseminated via various sources, including the Stock Exchange News Service (SENS), circulars, annual reports,  newspapers, etc. This information is subsequently interpreted by various market players and distributed accordingly, thereby appearing in various formats, containing duplicated, and in some instances, inconsistent information that is open to interpretation.

The financial crisis highlighted the need for streamlined, reliable, single source issuer notifications, with low risk tolerance. As South Africa’s licensed Central Securities Depository, Strate executes all corporate actions (for example, interest, dividends, etc.) in respect of dematerialised securities for the market. Strate is licensed to be the independent provider of post-trade products and services for the financial markets.

The benefits of Strate's corporate actions model cannot be underestimated, given the significant risk reduction and cost savings it brings in the corporate actions arena. Within Strate, corporate actions are executed electronically in a quick and secure manner. Payments are transferred electronically with same-day value, eliminating the costs and risk associated with cheque payments.

To find out about how Strate processes your corporate actions, click here. You can also contact the team via sasatstrate.co.za.

 

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Embrace the Season of Giving by Donating Odd Lot JSE-Listed Shares to Charity

Thursday, December 12, 2013

As the festive season approaches, it is often a time of giving. With Strate Charity Shares (SCS), investors across South Africa and abroad holding odd lots of JSE-listed shares can help worthy causes and charities by donating them in an easy manner.

“The cost of selling shares may be more than the value of those shares. As the year draws to a close and we prepare for the holiday season, investors can share in the spirit of giving by easily cleaning out their untidy portfolios and donating odd lot JSE-listed shares towards SCS for distribution to charities across South Africa,” says Tom Wixley, SCS chairman.

As the festive season approaches, it is often a time of giving. With Strate Charity Shares (SCS), investors across South Africa and abroad holding odd lots of JSE-listed shares can help worthy causes and charities by donating them in an easy manner.

“The cost of selling shares may be more than the value of those shares. As the year draws to a close and we prepare for the holiday season, investors can share in the spirit of giving by easily cleaning out their untidy portfolios and donating odd lot JSE-listed shares towards SCS for distribution to charities across South Africa,” says Tom Wixley, SCS chairman.

Wixley explains that SCS is a win-win situation, as there is no cost to donating shares. “The funds contributed to SCS are derived from share donations by investors, usually in the form of odd-lot shares, which SCS then aggregates and sells. It is as simple as filling out the necessary form and returning it at no cost in the prepaid envelope provided.”

To further encourage participation, SCS has registered with the South African Revenue Service (SARS) under section 18A of the Income Tax Act so that the value of any shares donated may be deducted from the donor’s taxable income.

Latest R600 000 Donation Pushes SCS’ Overall Contributions near the R3 Million Mark

This year, SCS announced that it is donating R600 000 to six charities. It has now given over R2.7 million to charities since its inception. 

“We aim to break through the R3 million mark within the next year, which is a great achievement for SCS. We’d like to thank all investors who have helped us achieve the amounts donated to date,” adds Wixley. 

The following organisations are the latest recipients of the SCS donation, each receiving R100 000 ahead of the festive season:

•   African Children Feeding Scheme;
•   Child Welfare Tshwane;
•   Cotlands;
•   Salesian Life Choices;
•   The Bethany House Trust; and
•   Topsy Foundation.

For further details, queries and/or donations contact the Strate Charity Shares toll-free helpline on 0800 202 363. If you are phoning outside South Africa, you may call +27 11 870 8207.

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South Africa’s Financial Institutions Come Together to Meet Global Regulations through Collateral Optimisation

Thursday, October 31, 2013

Strate, Africa's leading Central Securities Depository (CSD), and Clearstream, the International CSD (ICSD) and national CSD that is part of Deutsche Börse Group, today announced the launch of a centralised collateral management service for the South African financial market. Some of South Africa's largest financial institutions*, including banks, a number of fund managers and the Johannesburg Stock Exchange (JSE), have committed to exploring the use of these services to more efficiently manage collateral and to mitigate operational and credit risk within the South African market.

Strate, Africa's leading Central Securities Depository (CSD), and Clearstream, the International CSD (ICSD) and national CSD that is part of Deutsche Börse Group, today announced the launch of a centralised collateral management service for the South African financial market. Some of South Africa's largest financial institutions*, including banks, a number of fund managers and the Johannesburg Stock Exchange (JSE), have committed to exploring the use of these services to more efficiently manage collateral and to mitigate operational and credit risk within the South African market.

Highlights:

  • Some of South Africa's largest financial institutions*, including banks, fund managers and the Johannesburg Stock Exchange (JSE), explore collateral optimisation services to efficiently manage collateral within the South African market;
  • The service is offered by Strate, South Africa's Central Securities Depository (CSD), in partnership with Clearstream, the International CSD (ICSD) and national CSD group; and
  • The service looks to optimise the use of collateral to meet growing local and international regulatory requirements, such as Basel III, Solvency II and Regulation 28 of the Pension Funds Act.

Strate, Africa's leading Central Securities Depository (CSD), and Clearstream, the International CSD (ICSD) and national CSD that is part of Deutsche Börse Group, today announced the launch of a centralised collateral management service for the South African financial market. Some of South Africa's largest financial institutions*, including banks, a number of fund managers and the Johannesburg Stock Exchange (JSE), have committed to exploring the use of these services to more efficiently manage collateral and to mitigate operational and credit risk within the South African market.

The introduction of new international regulations, such as Basel III and Solvency II, which aim to protect the financial markets from systemic risk, will place pressure on the availability and funding costs associated with holding high-quality liquid assets (HQLA). In addition, the G-20 Finance Ministers have also recommended that all standardised, over-the-counter' (OTC) derivatives should be cleared with central counterparties (CCPs). This move will require initial margin – which has traditionally been in the form of cash, but may be expanded to include HQLA - to be placed with the CCPs. Non-cleared OTC derivatives will also have to be collateralised.

Such regulations are set to affect the South African market as financial institutions will need to hold greater regulatory and solvency capital with increased requirements for unencumbered HQLA. The cumulative effect of each of these changes, the need for greater transparency as well as the specific South African regulatory and legislative obligations stated in the Financial Markets Act and Regulation 28 of the Pension Funds Act, point to a re-think of collateralisation in the industry.

As a result, South Africa's financial institutions, together with Strate, have formed a Collateral Management Industry Forum with a view to explore the optimisation of collateral in the local market via Strate's Collateral Management Service. The service was initially developed by Clearstream who have offered this collateral management service on an outsourced basis to market infrastructures, like CSDs, outside Europe's borders since 2011. Along with South Africa, Brazil and Australia have been other non-European frontrunners in this initiative.

Despite cash being a common form of collateral, many financial institutions in South Africa are investigating the use of securities (equities, bonds and money market instruments) in order to meet their regulatory obligations. The use of securities as collateral does, however, introduce certain complexities and the market is looking at Strate's service to more efficiently and automatically manage their collateral.

Strate's Strategic Projects Director, Anthony van Eden, explains that there has been an overwhelming interest from the local market for the use of the service. “We are also in discussion with a number of other financial institutions, in addition to the ones named above, who are seeing the benefit of this industry-wide initiative and exploring the use of the service.”

Market-wide collateral optimisation is, to a large degree, a panacea for collateral fragmentation, scarcity and shortages, which the service looks to overcome.

Stefan Lepp, Head of Global Securities Financing and Member of the Executive Board of Clearstream, says, “We are delighted that we have partnered with Strate in South Africa to assist financial institutions in managing their domestic collateral more efficiently.” Lepp explains that it is a strategic priority of Deutsche Börse Group to make global markets more robust through risk and liquidity management solutions such as Clearstream's collateral management outsourcing service. “Collateral has become a very scarce resource and sourcing good quality collateral is increasingly expensive. The service looks to manage collateral holdings and exposures much more efficiently to provide markets with access to much needed liquidity.”

As part of its risk and liquidity management offering, Clearstream has developed a collateral management outsourcing solution allowing its market infrastructure partners like Strate to manage the collateral of their underlying client base. The assets never leave the domestic environment and remain under local jurisdiction; hence contractual agreements between the partner (Strate) and its domestic client base remain unchanged. The initiative has gained momentum, as upcoming regulatory changes require financial and non-financial institutions to improve their capital management.

Clearstream is the only collateral management services provider with a proven ability to manage collateral across time zones without transferring assets out of the respective domestic environment. The collateral management outsourcing service went live with Brazilian CSD Cetip in July 2011, with the ASX Group, Australia, in August 2013, with Spanish CSD Iberclear and Strate in October 2013. SGX, Singapore, has signed a Letter of Intent with Clearstream and Clearstream and Canadian CDS have announced that they are working together towards a collateral management solution for the Canadian market.

Media Contacts – Strate:

Tanya Knowles

+27 (0)11 759 5317

tanyakatstrate.co.za

Nicole De Matos

+27 (0)11 759 5405

nicoledatstrate.co.za

Media Contact – Clearstream:

Nicolas Nonnenmacher

+352-243-36115

nicolas.nonnenmacheratclearstream.com

Further details regarding Strate’s Collateral Management Service:

  • The Strate Collateral Management Service brings the following benefits to the South African financial markets:
  • Standardisation of collateral operations, message types and timelines across counterparts;
  • Near-time collateral movements of cash (through central bank payments) and securities (by leveraging Strate’s existing position as South Africa’s CSD);
  • The ability to automatically manage bilateral eligibility criteria of collateral regularly on an intra-day basis;
  • Automatically allocate the cheapest to deliver securities against open financial exposures;
  • Automatic management of collateral top-up, returns and cash margin calls;
  • Automatic substitutions within the bilaterally defined eligibility criteria;
  • Internal and market-wide optimisation of collateral;
  • Improved market liquidity;
  • Improved asset safety through the:
    a. Mandatory use of Segregated Depository Accounts (SDAs);
    b. Perfecting pledges; and
    c. Tracking of all collateral movements - prevention of unauthorised re-use and controlled re-use;
  • Reduction in operational and settlement risk and the concomitant administrative burden associated with using securities as collateral; and
  • Centralised view and reporting of all collateral and pledges placed and received.

About Strate

Strate is licensed as South Africa's Central Securities Depository (CSD) providing post-trade products and services to the financial markets. As the trusted independent provider of innovative post-trade products and services in Africa, Strate offers state-of-the-art technology, international expertise and global best practice to the financial markets.

Strate provides electronic settlement for securities - including equity, bond and derivative products, such as warrants, Exchange Traded Funds (ETFs), retail notes and tracker funds for Africa’s largest stock exchange, the Johannesburg Stock Exchange (JSE), as well as the settlement of money market securities for the South African market and equities for the Namibian Stock Exchange. It has recently added Collateral Management Services and new Asset Servicing products to its portfolio. Strate provides services to issuers for their investors in terms of the Companies Act (2008) and Financial Markets Act (FMA) (2012).

For more information, please visit www.strate.co.za

About Clearstream

Clearstream is the leading global provider in liquidity and collateral management services with more than 20 years of experience in this field.

As an international central securities depository (ICSD) headquartered in Luxembourg, Clearstream provides the post-trade infrastructure for the Eurobond market and services for securities from 53 domestic markets worldwide. Clearstream’s customers comprise approximately 2,500 financial institutions in more than 110 countries. Its services include the issuance, settlement and custody of securities, as well as investment fund services and global securities financing. With around EUR 11.7 trillion in assets under custody, Clearstream is one of the world’s largest settlement and custody firms for domestic and international securities.

As a central securities depository (CSD) based in Frankfurt, Clearstream also provides the post- trade infrastructure for the German securities industry, offering access to a wide number of markets in Europe.

For more information, please visit www.clearstream.com

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South African CSD Advocates CPSS-IOSCO Principles for Financial Market Infrastructures

Thursday, September 19, 2013

Monica Singer, the CEO of South Africa's Central Securities Depository (CSD), has said that the South African Central Securities Depository (CSD) strongly advocates the Principles for Financial Market Infrastructures (PFMIs) published by the Committee on Payment and Settlement Systems (CPSS) and the Technical Committee of the International Organisation of Securities Commissions (IOSCO) and it encourages all Financial Market Infrastructures to do the same.

Speaking at the CPSS-IOSCO panel discussion at Sibos yesterday, Singer argued that the principles-based route is the only one that works where she believes that CPSS-IOSCO cannot, realistically, prescribe things (as would be the case with ‘rules-based’ legislation). It is rather ‘best practice’ considerations that help a local market identify areas to focus on in order to provide a robust FMI.

Monica Singer, the CEO of South Africa's Central Securities Depository (CSD), has said that the South African Central Securities Depository (CSD) strongly advocates the Principles for Financial Market Infrastructures (PFMIs) published by the Committee on Payment and Settlement Systems (CPSS) and the Technical Committee of the International Organisation of Securities Commissions (IOSCO) and it encourages all Financial Market Infrastructures to do the same.

Speaking at the CPSS-IOSCO panel discussion at Sibos yesterday, Singer argued that the principles-based route is the only one that works where she believes that CPSS-IOSCO cannot, realistically, prescribe things (as would be the case with ‘rules-based’ legislation). It is rather ‘best practice’ considerations that help a local market identify areas to focus on in order to provide a robust FMI.

According to Singer, the Principles have put all Financial Market Infrastructures on par with one another – from Central Counterparties to CSDs to CLS (Continuous Linked Settlement) - giving them equal weight and encouraging them to comply with the same set of Principles for the benefit of the global financial market. It is a huge advantage for the market that the playing field is levelled.

The PFMIs were issued by CPSS-IOSCO in April 2012. Jurisdictions globally are currently in the process of incorporating them into their regulatory frameworks to foster the safety, efficiency and resilience of their Financial Market Infrastructures. In South Africa, there is already legislation in place to support the PFMIs called the Financial Markets Act, which became operational at the beginning of June 2013.

“Strate complied with international best practice before the Principles were drafted by CPSS-IOSCO and when these Principles were published, they affirmed that we were on the right track. For example, we had a Participant Failure Manual that was translated into other languages for other Financial Market Infrastructures. In addition, Strate strongly believes that we all have a responsibility to work with and educate the local market and our international counterparts as we are all interdependent and have an impact on one another,” says Singer.

She adds that she believes that for Strate, the adoption of CPSS-IOSCO Principles is not about regulation, but rather about following best practice. “According to the CPSS-IOSCO, Financial Market Infrastructures were a ‘source of strength’ during the financial crisis, able to settle obligations when due, thereby giving market participants the confidence to continue transacting. CSDs can use their adoption of the Principles to promote confidence within their respective markets."

She explains that if the Financial Market Infrastructure is highly rated in its PFMI Assessment, it provides a strong platform to support efforts to attract funds and investment into the country. This is essential for all markets and particularly emerging markets looking to strengthen an important contributor of economic growth. “The PFMIs provide a framework that is flexible and enabling with no right or wrong answers, which could become a valuable learning exercise for the entire industry, from regulators to Financial Market Infrastructures. The assessment becomes a living document and a guiding light for CSDs and the industries they serve. Your responses will evolve and change as your organisation and environment changes.”

In 2012, Strate undertook a voluntary self-assessment of the then draft Principles and it is currently completing an official assessment against the final 24 Principles in conjunction with the local Financial Services Board. Singer highlighted that Strate is awaiting the results of its initial assessment from its regulators.

About Strate

Strate is licensed as South Africa's Central Securities Depository (CSD) providing post-trade products and services to the financial markets. As the trusted independent provider of innovative post-trade products and services in Africa, Strate offers state-of-the-art technology, international expertise and global best practice to the financial markets.

Strate provides electronic settlement for securities - including equity, bond and derivative products, such as warrants, Exchange Traded Funds (ETFs), retail notes and tracker funds for Africa’s largest stock exchange, the Johannesburg Stock Exchange (JSE), as well as the settlement of money market securities for the South African market and equities for the Namibian Stock Exchange. It has recently added Collateral Management Services and new Asset Servicing products to its portfolio. Strate provides services to issuers for their investors in terms of the Companies Act (2008) and Financial Markets Act (FMA) (2012).

For more information, visit www.strate.co.za

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Strate and Euroclear to Introduce Further Fund Processing Efficiencies

Monday, September 9, 2013

Strate and Euroclear have signed a Letter of Intent to explore a new approach to automate the processing of mutual fund (unit trust) transactions for South Africa. The initiative is strategically aimed at establishing a fully electronic environment for the industry and investors in local funds. 

The current administrative processes associated with the South African mutual fund industry are fragmented, with no automated way to link cash payments with fund unit orders in a low-risk environment. Through the collaborative initiative with Euroclear, Strate are looking to work with the local industry to explore the implementation of an electronic and centrally hosted mutual fund settlement and custody platform for the South African market.

Strate and Euroclear have signed a Letter of Intent to explore a new approach to automate the processing of mutual fund (unit trust) transactions for South Africa. The initiative is strategically aimed at establishing a fully electronic environment for the industry and investors in local funds. 

The current administrative processes associated with the South African mutual fund industry are fragmented, with no automated way to link cash payments with fund unit orders in a low-risk environment. Through the collaborative initiative with Euroclear, Strate are looking to work with the local industry to explore the implementation of an electronic and centrally hosted mutual fund settlement and custody platform for the South African market.

Strate and Euroclear will also investigate options to centralise recordkeeping as well as create added benefit by improving settlement and payment efficiencies. Addressing these inefficiencies has the potential to save costs and diminish risk in the local fund market. The core element of the intended initiative is the provision of a platform where mutual fund transactions are processed on an automated basis from order routing to settlement and asset servicing. This end-to-end solution would be sufficiently robust and resilient to serve as an infrastructure for both domestic and international market participants, with settlement conducted in central bank money for South African investors. 

According to Monica Singer, Strate’s CEO, there are inefficiencies and risks  at present in the mutual fund industry. The fund unit and cash components of mutual fund subscriptions and redemptions in the South African market are credited or debited several days after cash has been received for settlement. We will investigate how Strate can improve this process, potentially centralising fund ownership registration and delivering a safer and more efficient means to enable our local fund industry to grow.

Strate, with the help of Euroclear, will determine the best way forward.  Our next steps include engaging with local stakeholders to define the required functionalities as well as the timing for implementation,” says Singer.

Lieve Mostrey, Chief Technology and Services Officer of Euroclear, commented: “We look forward to working with Strate on this initiative for South Africa. Sharing our decades of experience in fund processing for domestic and cross-border transactions with Strate and its clients is an efficient and cost-effective way to add value to an important emerging fund market.

Mostrey continued: “As we begin a new partnership with Strate, the South African market can be sure that the primary objective of our collaboration is to deliver greater operational efficiencies while reducing risk. We also envisage that this initiative will attract other markets to share the same technology in order to achieve economies of scale for their fund markets.”

The South African mutual fund industry is valued at around ZAR 1.3 trillion (EUR 91 billion), comprised of 42 fund management companies with over 1, 200 active funds.

Note to editors

Euroclear is the world’s largest provider of domestic and cross-border settlement and related services for bond, equity, derivatives and fund transactions.

Euroclear has decades of experience in providing post-trade services for domestic and offshore fund transactions.

The Euroclear group includes Euroclear Bank, based in Brussels, as well as Euroclear Belgium, Euroclear Finland, Euroclear France, Euroclear Nederland, Euroclear Sweden and Euroclear UK & Ireland.

In 2012, the Euroclear group settled the equivalent of EUR 542 trillion  in securities transactions, representing 159 million domestic and cross- border transactions, and held more than EUR 23 trillion in assets for  clients. Euroclear Bank is rated AA+ by Fitch Ratings and AA by  Standard & Poor’s.

For more information, please visit www.euroclear.com

Strate is licensed as South Africa’s Central Securities Depository (CSD) providing post-trade products and services to the financial markets. As the trusted independent provider of innovative post-trade products and services in Africa, Strate offers state-of-the-art technology, international expertise and global best practice to the financial markets.

Strate provides electronic settlement for securities - including equity, bond and derivative products, such as warrants, Exchange Traded Funds (ETFs), retail notes and tracker funds for Africa’s largest stock exchange, the Johannesburg Stock Exchange (JSE), as well as the settlement of money market securities for the South African market and equities for the Namibian Stock Exchange. It has recently added Collateral Management Services and new Asset Servicing products to its portfolio.  Strate provides services to issuers for their investors in terms of the Companies Act (2008) and Financial Markets Act (FMA) (2012).

For more information, please visit www.strate.co.za

Media contacts:

Euroclear

Denis Peters

+32 (0)2 326 2618

denis.petersateuroclear.com

Martin Gregson

+32 (0)2 326 4186

martin.gregsonateuroclear.com

Aki Vlahodimos

+32 (0)2 326 4336

aki.vlahodimosateuroclear.com

Strate

Tanya Knowles

+27 (0)11 759 5317

tanyakatstrate.co.za

Nicole De Matos

+27 (0)11 759 5405

nicoledatstrate.co.za

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Strate to Rebate Settlement Fees for JSE Members’ Proprietary and Controlled Clients’ Accounts

Wednesday, July 3, 2013

Over the weekend of 20-22 July 2013, the Johannesburg Stock Exchange (JSE) will implement Phase 1* of its T+3 Project, aimed at reducing the settlement cycle from the current T+5 to T+3. 

Phase 1 of the project involves separating JSE Members' proprietary and controlled accounts at both Strate and at the CSD Participants. Given the nature of the settlement model in South Africa, the separation of accounts will result in additional settlement transactions being generated by JSE Members to Strate. 

Over the weekend of 20-22 July 2013, the Johannesburg Stock Exchange (JSE) will implement Phase 1* of its T+3 Project, aimed at reducing the settlement cycle from the current T+5 to T+3. 

Phase 1 of the project involves separating JSE Members' proprietary and controlled accounts at both Strate and at the CSD Participants. Given the nature of the settlement model in South Africa, the separation of accounts will result in additional settlement transactions being generated by JSE Members to Strate. 

In support of the T+3 Project and JSE Members, Strate is pleased to advise that JSE Members will receive a rebate from Strate for these additional settlement transactions. 

Strate will determine the rebate based on the JSE Members’ average number of settlement transactions incurred over the first six months of 2013 (January – June 2013) and rebate JSE Members for any transactions generated above this number. Given that the settlement fees are recovered by Strate via the CSD Participants, the rebate will be passed on to JSE Members via their CSD Participant. 

This rebate will become effective from 22 July 2013 to 31 December 2013. From 1 January 2014 onward, Strate will implement a revised fee structure that takes into consideration the separation of accounts, as this rebate mechanism is a temporary measure. 

Should you have any queries, please do not hesitate to contact our Custody and Settlement Division at:

Iann Seymour-Smith

Head of Custody and Settlement

Strate Ltd

+27 (0)11 759 5349

iannsatstrate.co.za

Monica Olwagen

Manager: Settlement Services

Strate Ltd

+27 (0)11 759 5358

monicaoatstrate.co.za

*Phase 1 of the project includes the Regulation and Automation of:

  • Split Brokers Prop and Controlled
  • Controlled Client Pledge (electronic pledge to 3rd parties)
  • Member SLB Automation to CSD Participants
  • Member Corporate Actions Automation to CSD Participants
  • The settlement cycle will move from T+5 to T+3 as part of Phase 3 of the project

Market Communication Presentation

 
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Strate to Waiver Fees for Account Transfers for the Implementation of Phase 1 of the T+3 Project

Thursday, June 20, 2013

On the weekend of 20-22 July 2013, the Johannesburg Stock Exchange (JSE) will implement Phase 1* of its T+3 Project aimed at reducing the settlement cycle from the current T+5 to T+3. 

Phase 1 of the project includes splitting brokers' proprietary and controlled accounts. Strate is pleased to inform the market that for the period of the implementation (estimate at two weeks from 22 July 2013), all Account Transfer Fees associated with the implementation will be waived. 

On the weekend of 20-22 July 2013, the Johannesburg Stock Exchange (JSE) will implement Phase 1* of its T+3 Project aimed at reducing the settlement cycle from the current T+5 to T+3. 

Phase 1 of the project includes splitting brokers' proprietary and controlled accounts. Strate is pleased to inform the market that for the period of the implementation (estimate at two weeks from 22 July 2013), all Account Transfer Fees associated with the implementation will be waived. 

The project aims to align the South African market’s settlement cycle with the international recommendations set by both the Group of Thirty (G-30) and the International Organisation of Securities Commissions (IOSCO), which advocate a T+3 settlement cycle. 

Should you have any queries, please do not hesitate to contact our Clearing and Settlement Division at:

Iann Seymour Smith

Head of Clearing and Settlement

Strate Ltd

+27 11 759 5349

iannsatstrate.co.za

Monica Olwagen

Manager Settlement Services

Strate Ltd

+27 11 759 5358

monicaoatstrate.co.za

*Phase 1 of the project includes the Regulation and Automation of:

  • Split Brokers Prop and Controlled
  • Controlled Client Pledge (electronic pledge to 3rd parties)
  • Member SLB Automation to CSD Participants
  • Member Corporate Actions Automation to CSD Participants

The settlement cycle will move from T+5 to T+3 as part of Phase 3 of the project.

 
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Companies' Share Register Information is Not Restricted by New Laws

Wednesday, June 19, 2013

While the Protection of Personal Information Bill (PoPI) and the Financial Markets Act 2012 (FMA) will have an influence on the way that companies and Strate respectively deal with personal information, another law allows shareholders and the public to access to the companies’ share registers – the Companies Act. 

The FMA, which replaces the Securities Services Act 2004, came into operation on 3 June 2013. Among other things, the FMA regulates how self-regulatory organisations, such as Strate, deal with confidential information. 

While the Protection of Personal Information Bill (PoPI) and the Financial Markets Act 2012 (FMA) will have an influence on the way that companies and Strate respectively deal with personal information, another law allows shareholders and the public to access to the companies’ share registers – the Companies Act. 

The FMA, which replaces the Securities Services Act 2004, came into operation on 3 June 2013. Among other things, the FMA regulates how self-regulatory organisations, such as Strate, deal with confidential information. 

PoPI is expected to be enacted in 2013 and reaches further into the realm of confidentiality with the aim of promoting and protecting personal information. When personal information is processed by public and private bodies, the handlers of such information will have to abide by a set of principles to protect such personal information. 

“While PoPI and the FMA guard or even restrict the processing or disclosure of personal information, such as details relating to shareholders, the Companies Act requirements are still applicable to the securities register information, which allows access to the information contained on such registers,” explains Maria Vermaas, the Head of Strate’s Legal & Regulatory division. 

According to the Companies Act and its Regulations (Companies Regulation 32), a shareholder’s name, address and number of securities must still be contained in the securities register. 

The Companies Act states that a company director has to disclose his or her trading activity in shares of the company on which they serve as a board member. Similarly, a shareholder that acquires a holding of 5% or more of the issued share capital in a listed company is, by law, expected to notify the issuer. The JSE, via its stock exchange news service (SENS), publishes the details of the company director’s trading activity as a result of this disclosure requirement. However, it does not publish the trading activities of all other institutional or private individuals. 

This securities register is accessible by all interested parties – even members of the public and shareholders – as the Companies Act gives such parties the right to inspect and to get a copy of a company’s share register directly from the issuer. It is an offence for such issuer or company to fail to assist with a request for such access or to unreasonably refuse such access. 

While this information is accessible to interested parties, concerns have been raised by data vendors in the market who are no longer able to receive shareholder information directly from Strate, as there are now restrictions placed on Strate because of the new laws. 

“The way in which data vendors obtain information has changed as a result of the new legislation. While the Companies Act requires Strate to supply issuers with shareholder information, the FMA and PoPI do not allow Strate to give data vendors the information anymore. However, the information is still available to data vendors via the issuers. Strate has always supported the analytical services provided by data vendors, however, the FMA and PoPI legislation has put a constraint on this and we need to comply with the new legislation,” says Vermaas. 

It is important to note that Regulation 32 of the Companies Act also prescribes further information to be contained in this share register. If a company issues or transfers securities to a person, then that person’s name, business, residential or postal address, email address if available, and an identifying number that is unique to that person has to be in the share register. 

“Even though PoPI is aimed at promoting the constitutional right to privacy, it does not prevent Strate from performing the CSD functions in terms of the applicable law – Strate as the country’s CSD has an obligation to disclose securities register information to the issuers of these securities, which is not restricted by PoPI or the FMA,” concludes Vermaas.

About Strate

Strate is licensed as South Africa's Central Securities Depository (CSD) providing post-trade products and services to the financial markets. As the trusted independent provider of innovative post-trade products and services in Africa, Strate offers state-of-the-art technology, international expertise and global best practice to the financial markets.

Strate provides electronic settlement for securities - including equity, bond and derivative products, such as warrants, Exchange Traded Funds (ETFs), retail notes and tracker funds for Africa’s largest stock exchange, the Johannesburg Stock Exchange (JSE), as well as the settlement of money market securities for the South African market and equities for the Namibian Stock Exchange. It has recently added Collateral Management Services and new Asset Servicing products to its portfolio. Strate provides services to issuers for their investors in terms of the Companies Act (2008) and Financial Markets Act (FMA) (2012).

For more information, visit www.strate.co.za

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Strate Collaborates With REGIS-TR to Assist in the Development of a South African Trade Repository for Over-The-Counter Derivatives

Tuesday, April 30, 2013

To ensure South Africa benefits from world-renowned technology Strate has entered into an agreement with REGIS-TR, the European Trade Repository owned by Clearstream and Iberclear, to assist in the development of a local trade repository in accordance with South African regulatory requirements. 

According to Anthony van Eden, Strate's Chief Operating Officer, Strate’s philosophy has always been to strategically collaborate with the ideal partners and experts that have a sound track record and can provide the South African market with solutions, solutions which will enhance risk mitigation, improve transparency and align the country to international best practice. 

To ensure South Africa benefits from world-renowned technology Strate has entered into an agreement with REGIS-TR, the European Trade Repository owned by Clearstream and Iberclear, to assist in the development of a local trade repository in accordance with South African regulatory requirements. 

According to Anthony van Eden, Strate's Chief Operating Officer, Strate’s philosophy has always been to strategically collaborate with the ideal partners and experts that have a sound track record and can provide the South African market with solutions, solutions which will enhance risk mitigation, improve transparency and align the country to international best practice. 

To enable it to bring a Trade Repository that meets international standards as well as one that will benefit the South African market, Strate is collaborating with REGIS-TR. REGIS-TR has already supported the European industry from the inception of the new reporting obligation derived from EMIR. 

Founded on December 9, 2010, REGIS-TR is a societe anonyme, incorporated under the laws of the Grand Duchy of Luxembourg, registered with the Trade and Companies Register of Luxembourg and supervised by the CSSF as a Professional of the Financial Sector. Clearstream Banking SA, a legally recognized and established international securities depository, and Iberclear, Spain's central securities depository, are equal shareholders in the company. 

REGIS-TR has offered trade repository services for interest rate swaps since 2010. In 2012, it incorporated foreign exchange, equity, and commodity derivatives. REGIS-TR will provide full reporting services for all asset classes, including credit default swaps in mid-2013. It will provide all relevant data to any permissioned regulatory agency and already makes aggregated data available to the public. 

Interest rate swaps represent an estimated 85 percent of the ZAR24 trillion notional value of South Africa's over-the-counter derivatives market. 

In South Africa, the Financial Markets Act is providing a new framework to regulate the financial markets sector of the financial markets with enabling legislation for a Trade Repository for over-the-counter derivatives. “An approved Trade Repository will bring transparency to the market and greatly enhance regulator’s oversight and ability to respond to market risks or manipulations,” says van Eden. 

A Trade Repository for over-the-counter derivatives is a centralised database that maintains a secure and reliable electronic database of the records of open over-the-counter derivatives transactions. The primary public policy benefit of a Trade Repository stems from the improved market transparency facilitated by its record keeping function, the integrity of information it maintains and effective access to this information by relevant authorities and the public in line with their respective information needs. It provides reporting to market authorities and to its customers, as well as aggregated information to the public. 

The benefits of a Trade Repository include a quick and timely access to data in a time of crisis, which would safeguard SA’s financial markets. Regulators globally have recognised the need to use a Trade Repository to reduce systemic risk, improve transparency and protect investors. 

A Trade Repository is in line with recommendations set forth by the G-20 where all standardised over-the-counter derivative contracts should be traded on an exchange or electronic platform, where appropriate, and cleared through central counterparties by end-2012 at the latest. 

“This aims to enhance the stability of global financial markets and protect investors and financial institutions in the event of a crisis,” concludes van Eden. 

As one of the members of the G-20, South Africa is committed to and acknowledges the need to conform to reporting of over-the-counter derivatives transactions to enhance regulatory oversight and improve transparency.

About Strate

Strate is licensed as South Africa's Central Securities Depository (CSD) providing post-trade products and services to the financial markets. As the trusted independent provider of innovative post-trade products and services in Africa, Strate offers state-of-the-art technology, international expertise and global best practice to the financial markets.

Strate provides electronic settlement for securities - including equity, bond and derivative products, such as warrants, Exchange Traded Funds (ETFs), retail notes and tracker funds for Africa’s largest stock exchange, the Johannesburg Stock Exchange (JSE), as well as the settlement of money market securities for the South African market and equities for the Namibian Stock Exchange. It has recently added Collateral Management Services and new Asset Servicing products to its portfolio. Strate provides services to issuers for their investors in terms of the Companies Act (2008) and Financial Markets Act (FMA) (2012).

For more information, visit www.strate.co.za

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The Importance of a Trade Repository for Over-The-Counter (OTC) Derivatives

Thursday, April 11, 2013

In the aftermath of the global financial crisis, great concern was expressed over the lack of transparency and risk management of the over-the-counter (OTC) derivatives market, which many believed to be one of the fundamental causes for the events which placed the world on the brink of financial turmoil. 

As a result, much regulation has been promulgated to include the recording of OTC derivatives contracts in a Trade Repository (TR) to enable the evaluation of build-up of concentration risk associated with these agreements. 

In the aftermath of the global financial crisis, great concern was expressed over the lack of transparency and risk management of the over-the-counter (OTC) derivatives market, which many believed to be one of the fundamental causes for the events which placed the world on the brink of financial turmoil. 

As a result, much regulation has been promulgated to include the recording of OTC derivatives contracts in a Trade Repository (TR) to enable the evaluation of build-up of concentration risk associated with these agreements. 

A TR for OTC derivatives is a centralised database that maintains a secure and reliable electronic database of the records of open OTC derivatives transactions. The primary public policy benefit of a TR stems from the improved market transparency facilitated by its record keeping function, the integrity of information it maintains and effective access to this information by relevant authorities and the public in line with their respective information needs. It provides reporting to market authorities and to its customers, as well as aggregated information to the public. 

The benefits of a Trade Repository include a quick and timely access to data in a time of crisis, which would safeguard SA’s financial markets. Regulators globally have recognised the need to use a Trade Repository to reduce systemic risk, improve transparency and protect investors. 

A TR is in line with recommendations set forth by the G-20 where all standardised OTC derivative contracts should be traded on an exchange or electronic platform, where appropriate, and cleared through central counterparties by end-2012 at the latest. “This aims to enhance the stability of global financial markets and protect investors and financial institutions in the event of a crisis,” says Anthony van Eden, Strate’s Chief Operating Officer. 

As one of the members of the G-20, South Africa is committed to and acknowledges the need to conform to reporting of OTC transactions to enhance regulatory oversight and improve transparency. 

Prior to 2008, extensive financial risk existed in OTC derivatives market as considerable volumes of these instruments were traded off exchanges. “Financial institutions internationally had their blinkers on as they failed to manage the accumulation of risk as the market’s appetite for OTC instruments grew. Using OTC derivatives correctly, such as the use of credit derivatives for example, helps mitigate credit risk and improve liquidity, which is why these instruments are popular,” adds van Eden. 

However, some large international financial companies reportedly misunderstood the risks associated with these contracts and failed to adequately collateralise these exposures and had no understanding of whether their collateral was being reused or where it finally ended up. Furthermore, regulators had no oversight of the build-up of concentration risk amongst neither institutions nor their systemic impact on their economies. 

Consequently, when investment banks like Lehman Brothers cracked and filed for bankruptcy, regulators immediately became concerned over the credit exposures between counterparties. The lack of central oversight of a largely unregulated market created a wave of panic, as unreliable information led to a wider collapse in the financial markets – and the global financial crisis emerged. 

In South Africa, the Financial Markets Bill, which is expected to be promulgated in the next few months, is providing a new framework to regulate the financial markets sector of the financial markets with enabling legislation for a TR. “An approved Trade Repository will bring transparency to the market and greatly enhance regulator’s oversight and ability to respond to market risks or manipulations,” concludes van Eden.

About Strate

Strate is licensed as South Africa's Central Securities Depository (CSD) providing post-trade products and services to the financial markets. As the trusted independent provider of innovative post-trade products and services in Africa, Strate offers state-of-the-art technology, international expertise and global best practice to the financial markets.

Strate provides electronic settlement for securities - including equity, bond and derivative products, such as warrants, Exchange Traded Funds (ETFs), retail notes and tracker funds for Africa’s largest stock exchange, the Johannesburg Stock Exchange (JSE), as well as the settlement of money market securities for the South African market and equities for the Namibian Stock Exchange. It has recently added Collateral Management Services and new Asset Servicing products to its portfolio. Strate provides services to issuers for their investors in terms of the Companies Act (2008) and Financial Markets Act (FMA) (2012).

For more information, visit www.strate.co.za

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The Strate Collateral Management Project Update

Thursday, April 4, 2013

Since signing binding agreements with Clearstream to explore and use their Collateral Management services on a white labelled basis for South Africa, there has been growing interest in this service in the local market. 

Through various engagements with potential interested parties, Strate has received valuable feedback and is currently working closely with seven institutions that have expressed interest as early adopters of the services. These include FirstRand Bank and Absa. The interaction with the early adopters has not only enabled Strate to understand each institution’s requirements, but it has also made inroads into establishing a market standard for collateral management locally. 

Since signing binding agreements with Clearstream to explore and use their Collateral Management services on a white labelled basis for South Africa, there has been growing interest in this service in the local market. 

Through various engagements with potential interested parties, Strate has received valuable feedback and is currently working closely with seven institutions that have expressed interest as early adopters of the services. These include FirstRand Bank and Absa. The interaction with the early adopters has not only enabled Strate to understand each institution’s requirements, but it has also made inroads into establishing a market standard for collateral management locally. 

Strate continues to engage regulators, National Treasury and the South African Revenue Service to share the risk mitigation and benefits that a centralised automated solution will have for the South African financial market. Simultaneously, we have endeavoured to address some of the current legal issues and uncertainty around the use of equities as collateral, such as securities transfer tax (STT). 

Strate’s Collateral Management Service is expected to be rolled out in three phases:

Phase 1: A solution for the use of domestic dematerialised securities as collateral against open domestic financial exposures (to launch in November 2013);

We will then work with the South African Reserve Bank’s Foreign Exchange Department to explore:

Phase 2: The use of domestic dematerialised securities as collateral against open foreign exposures; and

Phase 3: The use of foreign dematerialised securities as collateral against open domestic exposures.

In addition, Strate is running a series of activities and workshops in collaboration with education partners to share with the market of the importance of a centralised collateral management solution that offer benefits, such as efficiencies and cost-savings, to the market. 

A Collateral Management Road Show is taking place in Cape Town on 23 April 2013. Further information may be provided by contacting the team below. 

Should you require more details regarding Strate’s Collateral Management Service or wish to become one of its early adopters, please contact the Collateral Management team: Collateralatstrate.co.za or via 011 759 5434.

About Strate

Strate is licensed as South Africa's Central Securities Depository (CSD) providing post-trade products and services to the financial markets. As the trusted independent provider of innovative post-trade products and services in Africa, Strate offers state-of-the-art technology, international expertise and global best practice to the financial markets.

Strate provides electronic settlement for securities - including equity, bond and derivative products, such as warrants, Exchange Traded Funds (ETFs), retail notes and tracker funds for Africa’s largest stock exchange, the Johannesburg Stock Exchange (JSE), as well as the settlement of money market securities for the South African market and equities for the Namibian Stock Exchange. It has recently added Collateral Management Services and new Asset Servicing products to its portfolio. Strate provides services to issuers for their investors in terms of the Companies Act (2008) and Financial Markets Act (FMA) (2012).

For more information, visit www.strate.co.za

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Liquidity Alliance Launched to Address Global Collateral Crunch

Wednesday, January 16, 2013

The financial crisis in 2007/2008 prompted regulators to make risk avoidance their top priority which they then backed with a portfolio of new legislation. The consequence of the Dodd-Frank Act, EMIR, CRD IV and other regulations will be to leave the financial services industry short of liquidity and collateral at a time when new capital rules make banks unwilling to lend. According to April 2012 estimates by the Basel Committee on Banking Supervision, banks in Europe alone are facing an aggregate shortfall of stable funding of EUR 2.78 trillion in fulfilling the additional liquidity requirements of Basel III. Additionally, the IMF reported in April 2012 that sovereign downgrades would reduce the supply of general collateral by USD 9 trillion by 2016. Sourcing collateral is therefore a truly global issue for the industry now and for the years to come. 

The financial crisis in 2007/2008 prompted regulators to make risk avoidance their top priority which they then backed with a portfolio of new legislation. The consequence of the Dodd-Frank Act, EMIR, CRD IV and other regulations will be to leave the financial services industry short of liquidity and collateral at a time when new capital rules make banks unwilling to lend. According to April 2012 estimates by the Basel Committee on Banking Supervision, banks in Europe alone are facing an aggregate shortfall of stable funding of EUR 2.78 trillion in fulfilling the additional liquidity requirements of Basel III. Additionally, the IMF reported in April 2012 that sovereign downgrades would reduce the supply of general collateral by USD 9 trillion by 2016. Sourcing collateral is therefore a truly global issue for the industry now and for the years to come. 

  • The initial members of the Liquidity Alliance are ASX (Australia), Cetip (Brazil), Clearstream (Frankfurt/Luxembourg), Iberclear (Spain) and Strate (South Africa)
  • The goal of the Liquidity Alliance is to exchange information, identify common needs and to extend global collateral solution
  • Liquidity Alliance will be a dynamic forum and open to additional participants from all regions

The financial crisis in 2007/2008 prompted regulators to make risk avoidance their top priority which they then backed with a portfolio of new legislation. The consequence of the Dodd-Frank Act, EMIR, CRD IV and other regulations will be to leave the financial services industry short of liquidity and collateral at a time when new capital rules make banks unwilling to lend. According to April 2012 estimates by the Basel Committee on Banking Supervision, banks in Europe alone are facing an aggregate shortfall of stable funding of EUR 2.78 trillion in fulfilling the additional liquidity requirements of Basel III. Additionally, the IMF reported in April 2012 that sovereign downgrades would reduce the supply of general collateral by USD 9 trillion by 2016. Sourcing collateral is therefore a truly global issue for the industry now and for the years to come. 

The nature of CSDs/financial infrastructures ensures they are well positioned to provide solutions to the global collateral shortage through optimisation of collateral pools. It is in this spirit that Australian CSD ASX, Brazilian CSD Cetip, the ICSD and CSD Clearstream, Spanish CSD Iberclear and South African CSD Strate announced today that they have formed an association of industry peers which aims to create a sustainable international industry approach to address the global collateral crunch. The Liquidity Alliance believes that forging partnerships with other like-minded infrastructures is the most sustainable way of extending reach and enabling cross-border collateral optimisation on a short-time-to-market basis. This is key if market participants are to meet the new requirements and find effective global solutions to this ongoing global problem. 

Accordingly, the five initial members of the Liquidity Alliance will exchange information, identify common needs and extend global collateral solutions while encouraging the development of informed research, which the Liquidity Alliance will promote as a neutral source of pan-industry information, ideas and opinions. The Liquidity Alliance members embrace open architecture and are therefore looking forward to integrating new members in the future. 

Participants will meet each quarter to discuss partnership plans, key developments, commercial opportunities in collateral management and to share individual market news while also investing resources on studies and industry research. The fact that the members are from different regions of the world brings together a unique pool of global insight and expertise that is expected to be a trusted source of valuable information. 

Peter Hiom, Deputy CEO of ASX Group, said: “Different markets have different needs and a truly global liquidity management solution needs to factor in these differences while still catering to the globally operating banks. It is our objective that the Liquidity Alliance will deliver an efficient value proposition for the worldwide industry enriched by local know-how and experience.” 

Monica Singer, CEO of Strate, said that central securities depositories, as some other national market infrastructures, have traditionally been behind-the-scenes organisations that quietly and efficiently serve their markets. “But now the time is right to leverage their central position and expertise in a more proactive way to differentiate Liquidity Alliance members from their competitors,” she said. 

Jesús Benito, CEO of Iberclear, noted that Europe was currently getting ready for TARGET2-Securities. “In the next few years, this is going to change the landscape for infrastructures and will also lead to greater demands and more competition in the collateral management space,” he said. “Working in association with other global infrastructures will ensure we can maximise our offer to our customers in an efficient and cost-effective way.” 

Stefan Lepp, CEO of Clearstream Banking AG, said: “Clearstream is delighted to be able to bring its world-leading collateral management technology to the Liquidity Alliance and so benefit its partners and their customers. Optimising collateral means creating and utilising the widest possible collateral pools without jeopardising individual and country specific requirements and the Liquidity Alliance is a major step in delivering a truly global liquidity and collateral pool.” 

Wagner Anacleto, COO Cetip, said that as the regulatory environment in Brazil continues to evolve, access to global collateral will become crucial to the further development of local financial markets. He added that his organisation’s experience with Clearstream demonstrates that the practical aims of the Liquidity Alliance are not only feasible but they are live and benefitting our market. “We look forward to the Liquidity Alliance taking this solution and making it global,” he said. 

About the Liquidity Alliance 

  • The Liquidity Alliance was formed in 2013 by five initial members:
  • ASX, a financial infrastructure in Australia
  • Cetip, a central securities depository specialising in derivatives, in Brazil
  • Clearstream, the German central securities depository and Luxembourg-based international central securities depository
  • Iberclear, the central securities depository in Spain
  • Strate, the central securities depository in South Africa.

Each of the Liquidity Alliance members are financial market infrastructures which are cooperating and developing collateral management solutions to address the growing present and future domestic and global needs for more collateral. Their main mission is to share information and ideas in order to create opportunities for their customers and for the wider industry while promoting best-practice in liquidity and collateral management. The Liquidity Alliance will encourage greater pan-industry partnership and cooperation through promotion of expert insight, ideas and research to be shared with industry peers, media and interested parties through communication activities such as conferences and events. 

Media contact Liquidity Alliance Australia (ASX Group, Sydney) 

Kristen Kaus, +61 2 9227 0410

Kristen.kausatasx.com.au

Media contact Liquidity Alliance Luxembourg (Clearstream, Luxembourg) 

Hazel Daniells, +352-243-32272 

hazel.daniellsatclearstream.com 

Media contact Brazil (Cetip, São Paulo) 

Daniela Norcia Gonçalves, +55 11 3111-1984

danielanorciaatcetip.com.br 

Media contact Liquidity Alliance Spain (Iberclear, Madrid) 

Oscar Moya, + 34 91 589 12 86,

omoyaatgrupobme.es 

Media contact Liquidity Alliance South Africa (Strate, Johannesburg) 

Tanya Knowles, +27-11-759-5317

tanyakatstrate.co.za

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Strate Selects TCS Bancs for Fixed Income Depository Operations

Thursday, November 1, 2012

Strate announced that it will be deploying the Market Infrastructure solution from the TCS BaNCS product suite to replace its current legacy Bond Market System, UNEXcor. TCS provides business application solutions to financial institutions globally leveraging a comprehensive product portfolio under the brand name of TCS BaNCS. 

Strate announced that it will be deploying the Market Infrastructure solution from the TCS BaNCS product suite to replace its current legacy Bond Market System, UNEXcor. TCS provides business application solutions to financial institutions globally leveraging a comprehensive product portfolio under the brand name of TCS BaNCS. 

The solution will provide Strate with the ability to adopt multiple BIS settlement models along with a flexible framework to cater to market-specific requirements designed to maximize settlement efficiency. In line with global trends, the solution provides comprehensive support for both nominee and beneficiary accounts, thereby providing Strate with the ability to smoothly transition to an SOR (Securities Ownership Register) market model. As part of the implementation, the interfaces for the Bond Market System will also be refreshed with ISO standard messages. 

The multi-asset class capability and the ability to plug-in new components for value added services make TCS BaNCS a good, long-term strategic choice. TCS, being a trusted partner of Strate for over 14 years in providing best in class IT solutions, with this new engagement, will prove its superior commitment to customers in delivering solutions in a sustained manner and add continuous value and business benefits. 

Commenting on the selection of TCS BaNCS, Ms. Monica Singer, CEO, Strate, said: “This choice was a natural outcome of a long partnership with TCS, as they have demonstrated deep understanding of our business over the years and delivered with certainty. Their product fits into our landscape and future strategy. We aim to raise the efficiency bar, post this deployment for Fixed Income Depository Operations.” 

Mr. N. Ganapathy Subramaniam, President, TCS Financial Solutions said: “TCS has played a strong role in the evolution of the settlement infrastructure in the South African market since the inception of Strate and in making it world class. The selection of TCS BaNCS at Strate further vindicates our commitment to the market and to our solution being best in class, in alignment with the strategic direction of our key customers. We look forward to taking our strong relationship with Strate to the next level in value delivery with this Program.” 

About Strate 

Strate Ltd is proud to be the licensed Central Securities Depository (CSD) for the electronic settlement of financial instruments in South Africa. As the trusted independent provider of innovative post-trade products and services in Africa, Strate offers state-of-the-art technology, international expertise and global best practice to the financial markets. 

Strate provides electronic settlement for securities including equities, bonds and derivative products, such as warrants, Exchange Traded Funds (ETFs), retail notes and tracker funds for Africa’s largest stock exchange, the Johannesburg Stock Exchange (JSE), and equities for the Namibian Stock Exchange. It has now added the settlement of money market securities to its portfolio of services. It provides services to Issuers for their Investors in terms of the Companies Act (2008) and Securities Services Act (SSA) (2004). 

www.strate.co.za 

About Tata Consultancy Services Ltd. (TCS) 

Tata Consultancy Services is an IT services, consulting and business solutions organization that delivers real results to global business, ensuring a level of certainty no other firm can match. TCS offers a consulting-led, integrated portfolio of IT, BPO, infrastructure, engineering and assurance services. This is delivered through its unique Global Network Delivery Model™, recognized as the benchmark of excellence in software development. 

A part of the Tata group, India’s largest industrial conglomerate, TCS has over 254,000 of the world’s best-trained consultants in 42 countries. The company generated consolidated revenues of US $10.17 billion for year ended March 31, 2012 and is listed on the National Stock Exchange and Bombay Stock Exchange in India. For more information, visit us at www.tcs.com

For more information, please contact:

Tata Consultancy Services Ltd. (TCS)

R Vivekanand (Vivek) 

Global Head - Product Delivery 

Tel: +914466164732 

Email: r.vivekanandattcs.com

Strate Ltd.

Tanya Knowles 

Head of Marketing 

Tel: + 27 (11) 759 5317 

Email: tanyakatstrate.co.za 

Nicole de Matos 

Copywriter and PR Officer 

Tel: + 27 (11)759 5405 

Email: nicoledatstrate.co.za

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BankservAfrica Forges Relationship with Strate’s SWIFT Services

Monday, October 8, 2012

Africa’s largest automated payments clearing house, BankservAfrica, through its BSVA Integrated Services business, will be utilising Strate's SWIFT infrastructure to allow it to send and receive messages over the SWIFT network. 

“After a long-standing working relationship with the BankservAfrica group, we are excited to have them join and utilise Strate’s SWIFT infrastructure. We believe that we offer one of the best SWIFT infrastructures in the world and are pleased to have more clients seeing the benefits and coming on board,” says Rudi Steenkamp, Head of IT at Strate Ltd. 

Africa’s largest automated payments clearing house, BankservAfrica, through its BSVA Integrated Services business, will be utilising Strate's SWIFT infrastructure to allow it to send and receive messages over the SWIFT network. 

“After a long-standing working relationship with the BankservAfrica group, we are excited to have them join and utilise Strate’s SWIFT infrastructure. We believe that we offer one of the best SWIFT infrastructures in the world and are pleased to have more clients seeing the benefits and coming on board,” says Rudi Steenkamp, Head of IT at Strate Ltd. 

Strate, South Africa’s Central Securities Depository (CSD), manages one of Africa’s largest SWIFT infrastructures and it is one of the top 2% of SWIFT users globally. Strate’s SWIFT Bureau Service allows clients to save costs and ultimately bring new efficiencies to their own organisations. 

Dan van der Westhuizen, CEO for financial and technology solutions at BSVA Integrated Services (a member of the BankservAfrica group) explains that by joining Strate’s SWIFT network, the cost of acquiring, upgrading and maintaining the hardware and software required to connect to SWIFT is shared between all bureau participants. “The BSVA SWIFT bureau provides our customers (in over 16 African countries) with an affordable low cost (outsourced) solution in order to send and receive messages on the SWIFT network. The SWIFT service bureau also ensures automation and standardisation of transactions using end-to-end solutions, leading to risk mitigation and increasing company service levels, all undertaken securely and reliably.” 

Strate's SWIFT infrastructure currently carries the bulk of financial messages for the equity, money market and bonds settlement systems as well as all of the JSE and brokers’ messages. The Strate SWIFT infrastructure provides full redundancy in the form of an on-site 'hot-standby' and an off-site Disaster Recovery (DR) infrastructure. 

Steenkamp says: “Strate has the best SWIFT infrastructure in Africa, and due to its varied network connectivity options, it has the capacity to host new clients, bringing them all the associated benefits. Strate has a Premium Plus Partnership with SWIFT and a cost-effective and state-of-the-art IBM infrastructure, which are among the benefits Strate provides. In addition, Strate offers 24/7 monitoring and support, which includes support of an on-call SWIFT engineer.” 

“Clients who utilise the Strate SWIFT infrastructure, will benefit from the reduction of costs in terms of acquiring, upgrading and maintaining the hardware and software components required to connect to the SWIFT network as these are shared between all Bureau participants,” concludes Steenkamp. 

For businesses interested in using Strate’s SWIFT infrastructure, please contact Leigh Bevis on LeighBatstrate.co.za, or 011 759 5466. 

About Strate

Strate is licensed as South Africa's Central Securities Depository (CSD) providing post-trade products and services to the financial markets. As the trusted independent provider of innovative post-trade products and services in Africa, Strate offers state-of-the-art technology, international expertise and global best practice to the financial markets.

Strate provides electronic settlement for securities - including equity, bond and derivative products, such as warrants, Exchange Traded Funds (ETFs), retail notes and tracker funds for Africa’s largest stock exchange, the Johannesburg Stock Exchange (JSE), as well as the settlement of money market securities for the South African market and equities for the Namibian Stock Exchange. It has recently added Collateral Management Services and new Asset Servicing products to its portfolio. Strate provides services to issuers for their investors in terms of the Companies Act (2008) and Financial Markets Act (FMA) (2012).

For more information, visit www.strate.co.za

About BankservAfrica 

Innovation drives BankservAfrica (www.bankservafrica.co.za) and has ensured they remain the industry leader in electronic payment and information switching services for 40 years - with world class systems, infrastructure, tools and expertise. 

Since 1972, BankservAfrica has provided interbank electronic transaction, switching and settlement services to the South African banking sector and to banks in Africa: facilitating quality transactions in a properly regulated system, compliant with international banking best practice and standards, while reducing risk and complexity in the industry. 

BankservAfrica annually switches, clears and settles nearly two billion transactions worth trillions of rands.

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98% of SA’s R1,15 Trillion in Bond Market Assets Now Dematerialised

Wednesday, February 8, 2012

Strate's drive to a paperless South African bond market has culminated in a 98% dematerialisation success rate amongst the R1,15 trillion of bond market assets. 

Strate is the authorised Central Securities Depository (CSD) for the electronic settlement of equities, bonds and money market securities. It provides the infrastructure to electronically process the settlement of securities in South Africa. 

Strate's drive to a paperless South African bond market has culminated in a 98% dematerialisation success rate amongst the R1,15 trillion of bond market assets. 

Strate is the authorised Central Securities Depository (CSD) for the electronic settlement of equities, bonds and money market securities. It provides the infrastructure to electronically process the settlement of securities in South Africa. 

  • 98% of SA's R1,15 trillion in bond market assets now dematerialised
  • Dematerialisation has significantly reduced the post-trade risks associated with the previous paper based settlement environment

Strate's drive to a paperless South African bond market has culminated in a 98% dematerialisation success rate amongst the R1,15 trillion of bond market assets. 

Strate is the authorised Central Securities Depository (CSD) for the electronic settlement of equities, bonds and money market securities. It provides the infrastructure to electronically process the settlement of securities in South Africa. 

The dematerialisation process involves converting paper certificates of ownership into electronic records of ownership, significantly reducing the risks associated with the trading and settlement of securities. 

“To have reached the 98% dematerialisation mark in the bond market is a significant milestone for the market,” says Monica Singer, Strate’s CEO. “By taking the process as far as we have, the straight-through-processing of all transactions has significantly lowered South Africa’s risk profile and encouraged local and foreign investment in our growing bond market.” 

Singer encapsulates that the reduction of risks in the bond market has:

  • Replaced the archaic paper based environment for a secure, accurate and up to date electronic record of ownership;
  • Eliminated fraudulent scrip in the market for all dematerialised holdings;
  • Provided investors with timely settlement as opposed to the delays experienced previously;
  • Provided the simultaneous delivery / registration of securities and payments
  • Increased market regulation and liquidity; and
  • Attracted foreign investment to South Africa.

Singer is confident that the bond market’s rapid dematerialisation, along with the resultant focus on the attendant benefits, will help encourage further dematerialisation in the equities space. 

“While only a small percentage of securities are yet to be dematerialised in the equities market, the closer we get to full dematerialisation the lower the settlement risk and cost of servicing shareholders by listed companies. All concerned stand to benefit from whatever it takes to increase confidence in our markets and Strate therefore encourages any outstanding paper to be moved into the dematerialised environment.”

About Strate

Strate is licensed as South Africa's Central Securities Depository (CSD) providing post-trade products and services to the financial markets. As the trusted independent provider of innovative post-trade products and services in Africa, Strate offers state-of-the-art technology, international expertise and global best practice to the financial markets.

Strate provides electronic settlement for securities - including equity, bond and derivative products, such as warrants, Exchange Traded Funds (ETFs), retail notes and tracker funds for Africa’s largest stock exchange, the Johannesburg Stock Exchange (JSE), as well as the settlement of money market securities for the South African market and equities for the Namibian Stock Exchange. It has recently added Collateral Management Services and new Asset Servicing products to its portfolio. Strate provides services to issuers for their investors in terms of the Companies Act (2008) and Financial Markets Act (FMA) (2012).

For more information, visit www.strate.co.za

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Clearstream and Strate Explore Collateral Management Cooperation for South Africa

Friday, January 20, 2012

On 18 January 2012, Clearstream and Strate, the South African central securities depository, signed a Letter of Intent (LOI) aimed at exploring a new triparty collateral management service for South Africa. The service intends to target the collateralisation of exposures in the South African market. Under the LOI, Strate will look to utilise Clearstream’s collateral management infrastructure, the Global Liquidity Hub, for the allocation, optimisation and substitution of local collateral. The system operates on a fully automated basis in real time and could enable Strate clients to handle their domestic collateral holdings and exposures more efficiently without the need to move collateral out of the domestic South African environment. 

On 18 January 2012, Clearstream and Strate, the South African central securities depository, signed a Letter of Intent (LOI) aimed at exploring a new triparty collateral management service for South Africa. The service intends to target the collateralisation of exposures in the South African market. Under the LOI, Strate will look to utilise Clearstream’s collateral management infrastructure, the Global Liquidity Hub, for the allocation, optimisation and substitution of local collateral. The system operates on a fully automated basis in real time and could enable Strate clients to handle their domestic collateral holdings and exposures more efficiently without the need to move collateral out of the domestic South African environment. 

  • The two companies have entered into exclusive negotiations to explore the development of the new service for South Africa
  • Strate clients would benefit from a more efficient use of their domestic collateral
  • South Africa would be the third market, after Brazil and Australia, to use the Liquidity Hub GO outsourcing service from Clearstream

On 18 January 2012, Clearstream and Strate, the South African central securities depository, signed a Letter of Intent (LOI) aimed at exploring a new triparty collateral management service for South Africa. The service intends to target the collateralisation of exposures in the South African market. Under the LOI, Strate will look to utilise Clearstream’s collateral management infrastructure, the Global Liquidity Hub, for the allocation, optimisation and substitution of local collateral. The system operates on a fully automated basis in real time and could enable Strate clients to handle their domestic collateral holdings and exposures more efficiently without the need to move collateral out of the domestic South African environment. 

Jeffrey Tessler, CEO Clearstream, said: “The ongoing financial crisis and regulatory initiatives like EMIR or reforms like Basel III require market participants to improve their liquidity management. Companies need to more efficiently handle their collateral holdings and exposure, and our outsourcing service addresses this industry concern. We are delighted to work with Strate to examine the development of a collateral management service for South Africa.” 

Monica Singer, CEO Strate, said: “Strate continues to explore ways to ensure that South Africa is fully integrated into the global financial markets. We are always looking for ways to introduce efficiencies for our clients, while at the same time reducing their risk. We look forward to working with Clearstream on this initiative.” 

Clearstream and Cetip, the Brazilian CSD that operates the leading marketplace for fixed income securities and over-the-counter (OTC) derivatives in Latin America, have launched their collateral management outsourcing service for Brazil on 18 July 2011. In August, Clearstream and the Australian Securities Exchange announced exclusive negotiations to jointly develop a Liquidity Hub GO offering for the Australian market. 

The ongoing service development of the Clearstream infrastructure ensures that the users of the collateral management outsourcing service are always in line with changing regulations and market behaviors. Clearstream is the only collateral management services provider in a position to manage collateral across time zones and regions while the assets stay in the respective domestic market and under local legislation, which is a prerequisite for many countries before moving into a collateral management outsourcing agreement. 

Collateral is kind of a guarantee that market participants ask for in order to secure exposures resulting from financial transactions. The current global financial market environment as well as the wave of upcoming regulatory changes requires financial and non-financial institutions to improve their liquidity management and, accordingly, their collateral management efficiency. 

The recently published Accenture/Clearstream report “Collateral Management: Unlocking the Potential in Collateral” revealed that the financial services sector could save more than 4 billion Euros annually in collateral management costs by addressing operational inefficiencies: decentralized operations and unaligned business objectives are limiting banks’ ability to manage collateral efficiently. As a result, banks are unable to maximize liquidity, keep down financing costs and are forced to maintain excess collateral buffers. The report was based upon one-on-one interviews with 31 executives at 16 global banking institutions that manage nearly 20 percent of total global banking assets and on the analysis of publicly available industry data. 

About Clearstream 

Clearstream is the leading service provider in liquidity and collateral management services in Europe with more than 20 years of experience in this field. Monthly average outstanding reached 638.7 billion Euros in December 2011. Clearstream provides integrated collateral management services for margining, including auto allocation, optimization and auto substitution of collateral across time zones and for a wide range of market players, i.e. stock exchanges, clearing houses, central securities depositories, central banks, commercial banks, private banks, asset managers, insurance companies and an ever growing number of corporates. 

As an international central securities depository (ICSD) headquartered in Luxembourg, Clearstream provides the post-trade infrastructure for the Eurobond market and services for securities from 52 domestic markets worldwide. Clearstream’s customers comprise approximately 2,500 financial institutions in more than 110 countries. Its services include the issuance, settlement and custody of securities, as well as investment fund services and global securities financing. With almost 11 trillion Euros in assets under custody, Clearstream is one of the world’s largest settlement and custody firms for domestic and international securities. 

As a central securities depository (CSD) based in Frankfurt, Clearstream also provides the post-trade infrastructure for the German securities industry, offering access to a growing number of markets in Europe. 

Further information: www.clearstream.com

About Strate

Strate is licensed as South Africa's Central Securities Depository (CSD) providing post-trade products and services to the financial markets. As the trusted independent provider of innovative post-trade products and services in Africa, Strate offers state-of-the-art technology, international expertise and global best practice to the financial markets.

Strate provides electronic settlement for securities - including equity, bond and derivative products, such as warrants, Exchange Traded Funds (ETFs), retail notes and tracker funds for Africa’s largest stock exchange, the Johannesburg Stock Exchange (JSE), as well as the settlement of money market securities for the South African market and equities for the Namibian Stock Exchange. It has recently added Collateral Management Services and new Asset Servicing products to its portfolio. Strate provides services to issuers for their investors in terms of the Companies Act (2008) and Financial Markets Act (FMA) (2012).

For more information, visit www.strate.co.za

Media contact Clearstream 

Nicolas Nonnenmacher

Tel: +352-243-36115 

Email: nicolas.nonnenmacheratclearstream.com 

Media contact Strate 

Tanya Knowles

Tel: + 27 (11) 759 5317

Email: tanyakatstrate.co.za

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Citi Establishes Direct Custody and Clearing Services in South Africa

Tuesday, November 22, 2011

•   New Offering Expands Citi's Proprietary DCC Network to 60 Markets globally and 34 markets across EMEA

Citigroup today announced that its Global Transaction Services business has begun to provide Direct Custody and Clearing (DCC) services to its clients in South Africa. This new offering expands Citi's proprietary DCC network to 60 markets globally and 34 markets across EMEA.

  • New Offering Expands Citi's Proprietary DCC Network to 60 Markets globally and 34 markets across EMEA

Citigroup today announced that its Global Transaction Services business has begun to provide Direct Custody and Clearing (DCC) services to its clients in South Africa. This new offering expands Citi's proprietary DCC network to 60 markets globally and 34 markets across EMEA.

Lee Waite, Global Head of Direct Custody and Clearing, Citi Global Transaction Services, said: “This new milestone demonstrates the strength of our unrivalled network and our commitment to provide our clients with global solutions while delivering consistently high quality standard of service, technology and support.” Donna Oosthuyse, Citi Country Officer for South Africa said, “We are delighted to offer Direct Custody and Clearing services in South Africa, the leading economy and largest securities exchange in Africa. Citi has a long-standing presence in the country and we look forward to leveraging our local expertise and proactive engagement with customers, regulators as well as market infrastructures to generate new growth opportunities for our clients.”

Citi’s application to operate as a Central Securities Depository (CSD) Participant was approved by the Controlling Body of Strate Ltd, South Africa’s authorised CSD and the Financial Services Board. Chief Executive of Strate, Monica Singer, said, “Citi has a long established relationship with Strate as one of the founding shareholders back in 1998. We are pleased to welcome them as a new CSD Participant in South Africa, providing custody and settlement services across all three of our markets, namely for equities, bonds and money market securities.”

Direct Custody and Clearing plays an integral role in the capital markets by providing clearing and settlement services for the trading and investing activities of broker dealers as well as offering local market sub-custody services to banks and global custodians around the world.

Through its Securities and Fund Services business, Citi’s industry-focused experts provide institutional investors worldwide with tailored solutions delivered through proven global platforms that feature modular, open architecture. With $12.5 trillion of assets under custody and the industry's largest proprietary network, clients can leverage Citi's local market expertise and global reach to extract value across the entire investment value chain. Global Transaction Services, a division of Citi’s Institutional Clients Group, offers integrated cash management, trade, and securities and fund services to multinational corporations, financial institutions and public sector organisations around the world.

-Ends-

Notes to Editors

About Citi 

Citi, the leading global financial services company, has approximately 200 million customer accounts and does business in more than 160 countries and jurisdictions. Citi provides consumers, corporations, governments and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, securities brokerage, transaction services, and wealth management. 

Additional information may be found at www.citigroup.com

Twitter: @Citi | YouTube: www.youtube.com/citi | Blog: http://new.citi.com | Facebook: www.facebook.com/citi | LinkedIn: www.linkedin.com/company/citi 

About Strate

Strate is licensed as South Africa's Central Securities Depository (CSD) providing post-trade products and services to the financial markets. As the trusted independent provider of innovative post-trade products and services in Africa, Strate offers state-of-the-art technology, international expertise and global best practice to the financial markets.

Strate provides electronic settlement for securities - including equity, bond and derivative products, such as warrants, Exchange Traded Funds (ETFs), retail notes and tracker funds for Africa’s largest stock exchange, the Johannesburg Stock Exchange (JSE), as well as the settlement of money market securities for the South African market and equities for the Namibian Stock Exchange. It has recently added Collateral Management Services and new Asset Servicing products to its portfolio. Strate provides services to issuers for their investors in terms of the Companies Act (2008) and Financial Markets Act (FMA) (2012).

For more information, visit www.strate.co.za

Additional information may be found at www.strate.co.za

Twitter:@strateltd | YouTube: www.youtube.com/user/StrateLtdCSD | Facebook: www.facebook.com/#!/groups/107241797726/ | LinkedIn: za.linkedin.com/pub/strate-ltd/22/1b/195

Media Contacts

Johannesburg

Vanashree Moodley +27 (11) 944-0257 Vanashree.moodleyatciti.com

London

Capucine Boncenne +44-20-7508-9355 capucine.boncenneatciti.com

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Link Investor Services Joins Strate’s CSD Participant Elite

Tuesday, October 25, 2011

Link Investor Services (Pty) Ltd has been approved as a South African Central Securities Depository (CSD) Participant for Equities as of 1 November 2011 by the Controlling Body of Strate and the Financial Services Board. 

Link is the first new CSD Participant to enter the South African Equities Market in over ten years. The role of a CSD Participant is to administer Securities or an interest in Securities, for example shares, which are held in Custody on behalf of investors. Link joins an elite group of six other Participants, namely the big four local banks, Société Générale Johannesburg Branch and Computershare Ltd.

Link Investor Services (Pty) Ltd has been approved as a South African Central Securities Depository (CSD) Participant for Equities as of 1 November 2011 by the Controlling Body of Strate and the Financial Services Board. 

Link is the first new CSD Participant to enter the South African Equities Market in over ten years. The role of a CSD Participant is to administer Securities or an interest in Securities, for example shares, which are held in Custody on behalf of investors. Link joins an elite group of six other Participants, namely the big four local banks, Société Générale Johannesburg Branch and Computershare Ltd. 

Monica Singer, Strate’s CEO, explains that Link’s induction as a CSD Participant is a highly significant financial market development, since there has been a great deal of interest from other international players to enter this space. 

“It is a measure of Link’s stature and its commitment to the South African market that its application has been approved as a CSD Participant. We at Strate are excited about having a new client and that we look forward to working with Link and fostering a good relationship” 

Koos van Niekerk, Link Investor Services CEO, says that the company sees great potential in South Africa to grow the CSD Participant business rapidly over the next few years. As a subsidiary of the larger Australian domiciled global company, Link Group, which in addition to South Africa and Australia operates in New Zealand, India, Papua New Guinea, Hong Kong, United Kingdom, France, United States and Canada, he believes that Link Investor Services will be able to bring unique and competitive product offerings and services to the local market. 

“Our intention is to take a partnership approach with clients to meet their unique requirements and build the business from a solid base and product offering. Our products range from custodial, corporate actions and securities lending and borrowing services for large institutional investors to own name shareholding for private clients.” 

End. 

For further information please contact:

Koos van Niekerk

Chief Executive Officer

Link Investor Services (Pty) Ltd

Direct: +27 (11) 713-0839

Mobile: +27 (82) 821-9966

E-mail: koosatlinkmarketservices.co.za

Website: www.linkmarketservices.co.za

Monica Singer

Chief Executive Officer

Strate Ltd

Direct: (+27)11 759 5311

Mobile:(+27) 82 600 6990

E-mail: monicasatstrate.co.za

Website: www.strate.co.za

 
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MCDR and Strate Connect to LinkUp Markets

Monday, November 29, 2010

MCDR of Egypt and Strate of South Africa last week successfully connected to LinkUp Markets, a joint venture that comprises 10 Central Securities Depositories (CSDs) to improve efficiency and reduce costs of post-trade processing of cross-border securities transactions globally.

The connection of MCDR and Strate completes the current implementation plans of LinkUp Markets and sets the stage for full-scale interoperability among the member CSDs.

MCDR of Egypt and Strate of South Africa last week successfully connected to LinkUp Markets, a joint venture that comprises 10 Central Securities Depositories (CSDs) to improve efficiency and reduce costs of post-trade processing of cross-border securities transactions globally.

The connection of MCDR and Strate completes the current implementation plans of LinkUp Markets and sets the stage for full-scale interoperability among the member CSDs.

Tomas Kindler, Managing Director of LinkUp Markets, said: “The launch of MCDR and Strate as the first non-European member CSDs marks an important milestone for Link Up Markets, underpinning our ambitions to become a global CSD network. Over the past 20 months the concept was proven successfully and first CSDs have mastered the transition to become cross-border service providers. We now have all prerequisites in place to support large scale CSD interoperability with immediate benefits for the market”.

Link Up Markets is a joint venture between the CSDs of Austria (Oesterreichische Kontrollbank), Cyprus (Cyprus Stock Exchange), Denmark (VP), Egypt (MCDR), Germany (Clearstream Banking Frankfurt), Greece (Hellenic Exchanges), Norway (VPS), South Africa (Strate), Spain (Iberclear), Switzerland (SIX SIS) and VP Lux which represents 50% of European as well as 90% of African securities transactions and allows the easy implementation of links between CSDs.

LinkUp Markets aims to contribute to a more integrated and efficient securities market in Europe. By connecting to the LinkUp Markets infrastructure, each participating CSD will be able to access the services of the other linked CSD markets. Market participants will receive consistent best-in-class core settlement and custody services by directly accessing so far 10 markets via a single CSD gateway. The solution should allow CSD customers to significantly reduce the gap between domestic and cross-border costs for transactions.

About Strate

Strate is licensed as South Africa's Central Securities Depository (CSD) providing post-trade products and services to the financial markets. As the trusted independent provider of innovative post-trade products and services in Africa, Strate offers state-of-the-art technology, international expertise and global best practice to the financial markets.

Strate provides electronic settlement for securities - including equity, bond and derivative products, such as warrants, Exchange Traded Funds (ETFs), retail notes and tracker funds for Africa’s largest stock exchange, the Johannesburg Stock Exchange (JSE), as well as the settlement of money market securities for the South African market and equities for the Namibian Stock Exchange. It has recently added Collateral Management Services and new Asset Servicing products to its portfolio. Strate provides services to issuers for their investors in terms of the Companies Act (2008) and Financial Markets Act (FMA) (2012).

For more information, visit www.strate.co.za

Media Relations

LinkUp Markets

+34 91 589 23 39

mediaatlinkupmarkets.com

MCDR

Riham Gamal

+2022 5971 519

riham.gatmcsd.com.eg

Strate Ltd 

Monica Singer

+27 11 759 5311

monicasatstrate.co.za

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