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You can connect with Strate on LinkedIn, Twitter and Facebook by searching for ‘StrateCSD’. Alternatively, you may click on the icons below and select the Follow button on the company’s Twitter Page, the Join button on its LinkedIn Group and the Like buttons on its Facebook profile and group.

 

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First Interbank Collateralised Lending Transaction Processed through Strate’s Collateral Management Services

Two of South Africa’s large financial institutions, Standard Bank South Africa Ltd (SBSA) and FirstRand Bank (FRB), have created a significant milestone for South Africa’s financial markets, entering into the first secured interbank collateralised lending transaction through the country’s only Tri-Party Collateral Management Services Provider, Strate. The transaction was processed on 9 December 2015.

 

Strate is licensed as South Africa’s Central Securities Depository (CSD) and it has provided post-trade products and services to the financial markets for South Africa since 1998. Its collateral management services were launched in 2014 to assist the financial markets in efficiently managing their collateral by providing a cost-effective automated solution.

 

Paul Burgoyne, Head: SBSA Treasury and Money Markets, says Standard Bank is pleased with the introduction of tri-party repo technology to the South African market. “These developments will reduce risk in the local interbank markets, initially by making secured square-off options available to banks and should have a positive development on secured financing markets in South Africa”.

 

Muzi Mavuso, Head of Intraday Liquidity Management at FRB, adds, “This is a milestone for the interbank market in South Africa. We as FirstRand Bank are very excited and proud to be part of this history in the making. We would also like to congratulate Strate for successfully delivering the product to the market”.

 

According to the Head of Strate’s Collateral Management Services, Anthony van Eden, the efficient and automated services provide significant benefits to both the collateral givers and receivers as well as mitigating counterparty credit and operational risks.

 

“Strate’s Collateral Management Services provides banks with the opportunity to lend interbank on a collateralised basis in the daily ‘square-off window’ at the South African Reserve Bank. The service automatically selects ‘available for use’ securities (bonds, equities and money market securities) from the banks’ pools of available eligible securities based on predefined agreed collateral eligibility criteria of the counterparty banks, which are preloaded into the service. Securities placed as collateral can either be in the form of a pledge or under cession. The fact that the interbank overnight lending market can now be collateralised not only makes interbank overnight borrowing cheaper but also provides access to funds above banks unsecured credit limits and will widen and deepen liquidity pools in the South African Market.”

 

Visit https://www.strate.co.za/our-services/managing-your-collateral, or email collateral@strate.co.za, to find out more about what the service offers.

 

 

Strate wins Integrated Reporting Award

South African Central Securities Depository (CSD), Strate, has won the category for unlisted companies in the Integrated Reporting awards hosted by Institute for Chartered Secretaries Southern Africa in partnership with the JSE Limited. The 2015 ceremony took place on 11 November 2015 at Montecasino in Fourways, Johannesburg.

 

According to Strate’s former Chief Financial Officer, Hannes van Eeden, the accolade re-enforces Strate’s strategic objectives and values. “Strate prides itself on benchmarking its activities against international best practice. The reports from all entrants were judged across a broad range of criteria based on the International Integrated Reporting Council’s Framework, proving that Strate is once again a proudly South African company that operates at the highest levels of governance, standards and excellence,” van Eeden explains.

 

The International Integrated Reporting Council has stated that there is a “growing realisation that investors need better quality information” from businesses. Van Eeden adds, “Having a more transparent disclosure and communication with all stakeholders allows companies to evolve from the traditional reports on financial statements to holistic informative reporting and communication. Strate will continue to approach its Integrated Reports with the view to build on the previous editions and benchmark future reports against best practice.”

 

Strate would like to congratulate the winners of all other categories, as well as all companies that tell their integrated story by thinking holistically about their strategy and plans, building investor and stakeholder confidence.

 

The Annual Report Awards have been rewarding excellence in corporate reporting since 1956.  The Institute pioneered these types of awards, which have become more widespread in recent years. The primary objective of the Awards is to encourage accurate and transparent financial reporting and full disclosure of all relevant information to stakeholders.

 

The following categories applied to the 2015 CSSA and JSE Integrated Reporting awards:

 

Categories for awards:

JSE categories:

  • Top 40
  • Mid Cap;
  • Small Cap;
  • Fledgling; and
  • Alt-X.

Non-JSE entries:

  • Regional Companies (i.e. outside South Africa);
  • State-owned Companies;
  • Public Sector;
  • NGOs; and
  • Unlisted.

To view more information, click here.

 

Strate representatives Anthony van Eden and Niresh Hiramun receiving the Integrated Reporting Award

 

Strate bids Farewell to its CFO, Hannes van Eeden

Strate bids farewell to one of its long-standing employees, Hannes van Eeden. As the company’s Chief Financial Officer (CFO) and board member, he will be leaving the CSD after 16 years of service to pursue personal interests.

 

We wish Hannes all the best for his future and we thank him for the work he has done to make Strate such a successful company.

 

 

Technological Disruptor Blockchain Dominates Sibos 2015

The financial markets are evolving and the next exciting catalyst for change is Blockchain, and while in its infancy, it has the industry talking.

 

Born out of the crypto currency Bitcoin, the Blockchain technology is an efficient and transparent cryptographic ledger system – or a chronological order of all Bitcoin transactions recorded in a public ledger. The technology has been called “the future for financial services infrastructure”.

 

Now, almost every financial market player is exploring how this innovative technological disruptor is going to transform their business and many companies see the significant potential that Blockchain has to offer. This was largely evident at the most recent SWIFT Sibos seminar, which took place at the Sands Expo and Convention Centre, Marina Bay Sands, Singapore, from 12 to 15 October 2015.

 

A recent Oliver Wyman report shows that Blockchain technology could cut banks’ infrastructure costs for securities trading, regulatory compliance and cross-border payments by up to R286 billion ($20bn) over the next seven years. While banks are looking at its potential in the payments environment, the post-trade players are asking whether it could also be used to streamline securities services as well. According to Strate CEO, Monica Singer, the main appeal of the technology to the securities services industry is that it can act as a system of record. “It’s reliable, granular and irreversible – which completely aligns to our objectives of transparency, risk mitigation and to our delivery versus payment model that is final and irrevocable.”

 

While Financial Market Infrastructures (FMIs), such as CSDs, have historically been labelled as the resilient and conservative companies that kept financial markets robust during the Global Financial Crisis, Singer believes the window of opportunity to innovate has presented itself. “Yes, the Financial Crisis has created regulatory pressures that has prompted CSDs globally to develop further solutions to enhance the safety and robustness of the financial system. I encourage CSDs to continue focussing on their core and provide these solutions. However, I question the consequences that we may face if we ignore disruptive technologies and the opportunities that they bring,” Singer explains.

 

In principle, sources note that Blockchain technologies could lead to significant reductions in the costs and risks of securities settlement and asset-servicing processes. They could also diminish systemic risk. Singer says that CSDs globally are already looking at aspects of Blockchain for their business, with two large European CSDs already investigating the potential of distributed ledger technology for asset settlement and reference data applications.

 

“While such initiatives are being explored, we have to recognise that much research needs to be done before we can apply it to the securities settlement landscape,” says Singer, adding that operational and regulatory aspects have to be considered. Blockchain would need to undergo several enhancements in order to evolve and be tailored to the securities environment and its regulatory landscape.

 

 

“We cannot afford to sit on the side lines and ignore the potential impact that disruptive technologies could have for South Africa. Both Strate and its peers internationally are investigating the potential that it offers and I can only imagine that Sibos 2016 is going to provide significant insight into the future of the financial markets,” she concludes

 

Sibos 2016 is set to take place at the Palexpo in Geneva, Switzerland, from 26-29 September. For more information, click here.

 

2016 Fee Revisions

Strate conducts a full review of its fees annually to align them with market and operational developments, ensuring that fees are equitable for the services offered. Strate will not be implementing fee increases for CSD Participants and Business Partners with regard to its equities, bonds and money markets services for 2016.

 

There will be no fee increase applicable for the equities transaction and participation fees, as well as for bond and money market settlement, depository and participation fees for 2016.

 

There will, however, be an inflation-related fee increase of 6% for issuer fees for equities, with the exception of the Register Administration fee. There will be no issuer fee increases for bonds and money markets. Strate’s 2016 fee schedule will be uploaded on its website at the beginning of January 2016.

 

To view the 2015 fee schedule, click here.

 

SA’s Financial Market Development Continues to Rank in Top 20

The 2015-2016 Global Competitiveness Index (GCI) report published by the World Economic Forum (WEF) continues to show South Africa placed amongst the top 20 countries globally in terms of financial market development.

 

After studying 140 countries, South Africa was ranked 12th in terms of financial market development. New Zealand and Singapore were first and second respectively, while Hong Kong was listed in the third position.

 

For South Africa, the key contributors to this pillar were its performance in terms of the financing through the local equity market (ranked first out of all the countries), the regulation of securities exchanges (ranked second), availability of financial services (ranked sixth), as well as the soundness of banks (ranked 8th).

 

The Financial Services Board (FSB) regulates South Africa’s securities exchange, the JSE, as well as CSDs such as Strate.

 

In the overall GCI country rating, South Africa was ranked at 49 out of 140 countries. According to the WEF Report, South Africa climbed seven places, reversing its four-year downward trend thanks largely to increased uptake of ICTs — especially higher Internet bandwidth — and improvements in innovation (up by five places to 38th), which establish the economy as the region’s most innovative. South Africa also hosts the continent’s most efficient financial market (12th).

 

The GCI takes into account 12 pillars or drivers: institutions, infrastructure, macro-economic environment, health and primary education, higher education and training, goods market efficiency, labour market efficiency, financial market development, technological readiness, market size, business sophistication and innovation.

 

 

Inaugural Finance and Investment Management Olympiad a Success

The first annual Finance and Investment Management Olympiad (FIMO) kicked off this year with 825 students, most of whom came from public schools.

 

The initiative, sponsored as a consumer education project by Strate, was run out of the Finance and Investment Management Department at the University of Johannesburg (UJ) and focused on Grade 11 and 12 learners in Gauteng.

 

According to Leigh Bevis, Strate’s Head of Stakeholder Relations, the participation by students played an important role in developing critical financial skills and educating the youth, with the ultimate intention of growing South Africa’s investment base. “South Africa’s economic growth is dependent on its investment profile. By nurturing students’ finance and investment skills, we’re empowering them to be educated so that they can contribute to the future success of our economy.”

 

Looking ahead, the national roll-out of FIMO to Grade 11 and 12 learners is being considered following the success of Olympiad in Gauteng.

 

The first round of the Olympiad was written on 6 May 2015, and the final round on 12 August 2015. The 2015 winners were:

 

 

Public Schools   Private Schools
First Place: Tie between T Sethshedi from Sutherland High School and S Bhana from King Edward VII School First Place: RI Trusler from Redhill High School
Second Place: N Ambrose from Zakariyya Park Combined School Second Place: VT Rakgotho from Vuleka Secondary School
Third Place: GJ Dreyer from Pretoria Boys High School Third Place: LGN Novello from Redhill High School
Fourth Place: NT Nemaungani from Sutherland High School Fourth Place: KK Mosupyoe from Princess Park College
Fifth Place: AC Mkhontwana from Cosmo City Secondary School Fifth Place: Dylan Nlzetich from Reddam House

 

 

Strate would like to congratulate the winners, as well as all students who participated in the 2015 FIMO. It also wishes to express its gratitude to the educators at the University of Johannesburg as well as to the organiser, Proverto.

 

Monica Singer speaking at the awards ceremony

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Monica Singer and UJ Faculty Dean, Professor Amanda Dempsey, with students and representatives from FIMO.