SocGen exit

Societe Generale Johannesburg Branch has voluntarily terminated its participation in Strate’s equity, bonds and money market environments. It ceased to be a full bank participant in the Strate environment with effect from 8 April 2020.

The Societe Generale custody and trustee business has been successfully transitioned to Absa Bank Limited.

Societe Generale has been a Strate client for many years and over that time has played a vital role in the financial markets ecosystem through its participation in market workshops, committees and forums. Its commitment to the testing and implementation of new products and services has been invaluable in assisting Strate to successfully introduce innovations to the market.

We wish Societe Generale great success as it focuses on its new strategic plan.

Turning compliance costs into competitive strategy

Created to alleviate and mitigate the build-up of systemic risk in financial markets, regulations drafted and implemented in South Africa post the global financial crisis have brought with them major complexities.

 

For entities with multiple exposures across various markets (e.g. a bank with multiple securities financing and derivative disciplines) this compounds to a plethora of regulatory, reporting and capital obligations for a single entity.

 

It is not surprising then that the cost implication of managing inventory and associated operational complexity across silos and eligibility requirements is costing companies significantly more than anticipated. In fact, according to Deloitte in 2017, when compared with pre-financial crisis spending levels, operating costs spent on compliance have increased by over 60% for retail and corporate banks. From reporting, to collateralisation, to capital penalties imposed for failure to conform, the cost associated with an inefficient strategy will become a competitive issue in the future, directly affecting bottom line performance.

 

While South African banks may not have been hit by the full force of the regulatory tidal wave just yet, the top tier banks are starting to feel the compounding effects. Phase 5 and 6 of the European EMIR uncleared margin requirements mandating the provision of non-cash collateral for initial margin comes into effect in September this year, tailed in 2021 by the JSE Securities Exchange’s acceptance of non-cash collateral for initial margin for exchange-traded derivatives in South Africa. Add these regulations to the current Basel IV requirements demanding collateral and reporting for LCR, NSFR in 2021, and the upcoming SACCR requirements in October (non -modellable approach for measuring counterparty credit risk associated with derivatives), and a strong case is made for the accelerated adoption of internal and external systems and compliance technologies.

 

Given the impact of various forms of regulation across numerous areas, there is increased demand for standardised reporting as well as greater contention over access to high-quality collateral. With an estimated R60 billion shortfall in high-quality liquid assets in South Africa according to the SARB, a cross-asset, cross-functional view that consolidates data and takes into consideration holistic collateral inventory will help to drive profits and a competitive strategy. It is, however, the bank that does collateral inventory management best that will gain the competitive advantage.

 

Kelly Robinson

Strate Collateral Services

 

Strate e-Voting continues to serve the financial markets amidst COVID-19

The COVID-19 pandemic is impacting our economy, our face-to-face business interaction and placing insurmountable strain on governments and healthcare systems in South Africa and globally. We acknowledge that this is a critical time for our clients as we all establish ways to manage the National State of Disaster.

 

Strate’s resilience measures remain focused on ensuring we continue to serve the financial markets while withstanding a diverse and varied set of stress scenarios. As such we have taken the necessary steps to enable our employees, clients and business partners, through our digital platforms,  to carry on with business-as-usual activities.

 

Strate implemented an electronic voting platform in December 2019, that provides you with an e-Voting solution. This is an end-to-end voting solution to cater for the South African market with the primary focus of reducing risks and inefficiencies in the value chain.

 

In light of the conditions we face in managing the pandemic, one of the benefits of e-voting is the ability to host virtual meetings for your shareholders. For issuers facing the cancellation of shareholder meetings, e-voting enables you to still go ahead with your meeting virtually via our digital platform.  The in-platform chat functionality allows for interaction between shareholders and issuers and maintains the integrity of the process.

 

We would like to assure you that during the nationwide 21 days of lockdown, it is “business as usual” at Strate as we are 100% committed to business continuity. Through our combined efforts as a market, we can stand together to flatten the curve and decrease the spread of COVID-19 in South Africa.

 

Strate remains committed to serving the South African financial markets. Should you have any questions regarding the use of Strate e-Voting, please contact the team on e-Votingteam@strate.co.za

Strate continues to serve the financial markets amidst COVID-19

The world is dealing with an unprecedented global health emergency, Novel Coronavirus disease (COVID-19). At Strate, we have been closely monitoring the situation. Our primary concern remains our ability to continue our services to the financial markets while ensuring the wellbeing of our employees in the face of this pandemic threat.

We would like to assure you that Strate has taken the appropriate measures to ensure the continuity of our business activities. We are leveraging various technology solutions to remain productive and in constant communication with our employees and the markets as a whole.

 

As a systemically important financial institution, we would like to assure you that during the nationwide 21 days of lockdown, it is “business as usual” at Strate as we adapt to the new way of working but rest assured that we are 100% committed to business continuity, just as we are in upholding the well-being of our employees and helping the country curb the spread of the coronavirus.

 

We have supplied back-up power appliances to ensure business continuity during power disruptions when employees are operating remotely.  These measures have been extensively tested and we are pleased to report that Strate is prepared.

 

Despite the exceptionally high volume of transactions being processed across the financial markets, Strate is performing well, with all services operating normally.  Our focus remains on serving the financial markets with the same level of efficiency and commitment you have come to expect from us.

 

We appreciate your support and understanding as we all adapt to these challenging times.

For more information, contact info@strate.co.za

Welcoming Absa Bank as a full bank participant

We are delighted to welcome Absa Bank Limited on its return as a full bank participant in the equities, bonds and money market environments.

 

In fulfilling our purpose to serve the financial markets, Strate is committed to supporting Absa’s ambition to re-establish its custody and trustee services offering to clients in South Africa.

 

Custody and trustee services has transitioned from Société Générale to Absa, with go-live on 2 March 2020.

 

Strate looks forward to continuing to build our relationships with Absa as both a customer and a shareholder that has provided ongoing support over the years.

Reporting and matching unlisted bond transactions

Strate has introduced an alternative digital access point for the reporting and matching of unlisted bond transactions and call bond transactions.

 

The new user-friendly platform provides custody, settlement and corporate action processes (coupons and redemptions) to the unlisted bond market. The platform can also facilitate the trade reporting of call bonds.

 

Users can directly report unlisted bond transactions to Strate for settlement purposes via the digital access point, which reduces risk and increases efficiency. Strate’s infrastructure allows for digital record keeping, which provides asset security. The platform offers an automated coupon and redemptions process that distributes these benefits seamlessly and timeously.

The platform went live on 18 November 2019.

For more information, please email unlistedsecurities@strate.co.za

Strate has new offices

Strate  new administrative offices have been completed and we are excited to have relocated to THE MARC as of 30 April 2019.

Our new address is:

5th Floor, Tower 1, THE MARC

129 Rivonia Road

Sandown

Sandton

2196

Our postal address and telephone numbers remain unchanged.

 

We look forward to welcoming you to our new offices soon.

Strate is moving offices

The week of 25 February – 1 March 2019 represents the first major step in the relocation of the Strate administrative offices from Illovo in Gauteng, South Africa, to Sandton in Gauteng, South Africa. All staff will initially be relocated to the 3rd floor, 2 Gwen Ln, in Sandton pending the completion of our new offices in THE MARC.

 

Careful planning has gone into ensuring that all Strate services will continue seamlessly throughout this transitional period. All business continuity capabilities will, however, be on high alert to counter any unforeseen disruption. The Strate infrastructure (including its two data centres, the connectivity to the market and contact numbers) are not affected by the move.

 

We look forward to welcoming you to our new offices at THE MARC soon.

Bond and Equity donations change the lives of children across South Africa

Little do people know that a Non-Profit Organisation accepting donations in the form of securities, such as equities and bonds, has helped touch the lives of many children in need across South Africa.

Previously investors who wished to dispose of their unwanted shares to neaten up their portfolios were deterred by the cost of selling them. As a result, thousands of Rands were tied up in assets that cost more to sell than they were worth. SCS was created to address these small, unwanted South African listed shares by collecting them via investor donations of such shares, dematerialising the shares if necessary and partner stockbrokers selling them on the JSE at no cost.

 

Since its inception in July 2002, SCS has distributed R7.61 million to charities dedicated to helping children. The people and companies involved in SCS all give their time and labour free of charge.

 

Education, early childhood development and crucial medication supplies are just some of the things made possible through donations, such as those provided for via SCS. Charities that have historically been the recipients of donations are the African Children Feeding Scheme, Bethany House Trust, Child Welfare Tshwane, Cotlands, Childline, Guild Cottage, Salvation Army, Nazareth House, Salesian Life Choices, Topsy Foundation and Zisize Educational Trust.

 

Beneficiaries of the SCS programme have been able to achieve the following and more due to the donations received.

 

  • Guild Cottage provides protection to vulnerable girls. The donations from SCS have contributed to covering their transportation costs, office costs, therapy and medication.
  • Through the donation made to Zisize, they have made it possible for the children of Ingwavuma in KwaZulu-Natal to receive quality education through early childhood development and foundation phase teacher training.
  • SCS’s support of The Topsy Foundation has allowed them to provide the best services to children in Dipaleseng, Mpumalanga. Their Early Childhood Development programme currently benefits 1 923 children a month.
  • The SCS initiative has enabled Bethany House Trust to optimise services to their beneficiaries, including educational support to children in alternative care. The donation has also enabled them to appoint educators and equip the homework centres with resources.
  • The funding to Cotlands has contributed to the delivery of early learning opportunities to more than 13 000 children, including serving 314 000 meals. These services are delivered through early learning playgroups, toy libraries and mobile toy libraries and also through capacity building of skills in parents. .
  • Childline has been able to further their Community Awareness and Prevention Programme through their donation from SCS. As part of this programme, Childline hosts School Talks, Positive Parenting programmes and trains staff and volunteers.

 

The nurturing of children should be everybody’s business. Children are our most precious resource, our nation’s future depends on them. What we do for them determines their outcomes and potential in life, and they will be the people who generate the wealth and strength of our economy.

 

 

We would like to extend our appreciation to our clients and those involved in making a change in a child’s life. We also want to encourage more and more South Africans to donate their unwanted shares and get involved in this worthy cause.

 

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.

 

A tribute to Iann Seymour-Smith

It is with deep regret and sadness that we have to tell you all that our friend and colleague, Iann,  passed away on 16 October 2018 after a short illness.

 

Our deepest condolences go out to his family and friends during this time of profound grief.

 

Iann has been a part of the fabric at Strate since inception, initially as a representative for First National and then as one of the first permanent staff members. I am sure you will agree that his absence creates a massive void both here at Strate and in the market as a whole.

 

We will keep you informed of the funeral arrangements as these become known. Strate will also be planning a memorial for Iann and will share this information as well in due course.