Strate has published its annual integrated report for the 2016 financial year end.
Not only can you learn about Strate’s operating environment and performance highlights, there are a range of infographics and a wealth of information about the history of the company, as well as the current value it creates for its clients, the community and other stakeholders.
To view the report online, click here.
During the 2017 Broad-Based Black Economic Empowerment (B-BBEE) Audit, which was based upon the 2016 Audited Financial Statements, Strate was categorized as a Level 2 Contributor with an overall recognition level of 156.25%. This is Strate’s best contributor status yet in the company’s history.
Strate continues to pride itself on the efforts by staff to drive transformation, while ensuring good corporate governance and citizenship. The company follows an integrated approach which seeks to engage all stakeholders in creating an enabling environment that contributes to the development of the country and the transformation of South Africa’s economy.
For a copy of Strate’s latest B-BBEE certificate, click here.
Strate, a South African Central Securities Depository (CSD), has welcomed the official go-live of South Africa’s newest bourse, ZAR X, after successfully integrating the exchange into Strate’s clearing and settlement platforms.
At the beginning of September 2016, the Financial Services Board notified the market that it had granted ZAR X an exchange licence. Strate was appointed by ZAR X to provide it with central depository services since the bourse’s inception early in 2015, where the CSD prepared to integrate the different requirements for ZAR X to create a bespoke settlement solution.
Preparatory work between Strate and ZAR X has taken place to implement a unique settlement cycle, which showcases the flexibility of Strate’s equities clearing and settlement technology to settle on any cycle that an exchange requires.
According to Beverley Furman who is the Managing Executive of CSD Operations, a division of Strate, Strate’s clearing and settlement technology already caters for multiple settlement cycles, from same day settlement (T+0), to three business days thereafter (T+3), or any requirement in fact (T+n). “When we were appointed by ZAR X as their Central Securities Depository, we understood that they wanted their equities settlement cycle to be on a T+0 basis and required a bespoke solution that would cater directly for their market. Given their shorter settlement cycle requirements, we developed solutions to address their unique corporate actions process and payments methodology, their closed account structure, as well as their pre-funded model.”
Etienne Nel, CEO of ZAR X, adds: “This is a historical milestone for the South African market and we couldn’t have achieved this without our service providers.
Strate’s born on the premise that it aims to deliver solutions that mitigate risk in the financial markets. A real-time settlement cycle achieves just that, as it ensures there’s no settlement risk to the investor, a win-win for both ZAR X and Strate.”
Furman concludes that Strate is open for business. “Strate has continued to be a trusted and independent party in the market, which is evident by us offering CSD services to new stock exchanges. Our equities settlement technology is robust and flexible and can cater for a number of evolving client needs and we can only look forward to working with our current and new clients in the years ahead.”
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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
All too often, good infrastructure goes unnoticed. This is probably one of the reasons why few South Africans know and understand the country’s Central Securities Depository, Strate, however, without it, investors would shy away from South Africa.
Prior to the implementation of Strate in 1999, SA was categorised as one of the worst emerging markets in terms of operational and settlement risk. Trading volumes on the stock exchange were averaging 4,000 trades daily, very thin when this is compared to the 350 000 on average during a month today.
Strate Charity Shares (SCS) is registered as a non-profit organisation and charity donation programme that was created almost 15 years ago to address the long-standing problem of investors holding small amounts of unwanted shares. Since 2002, SCS has paid more than R6 million to charities dedicated to helping children. It hands donations to charities across South Africa that are dedicated to feeding, raising and educating children.
Investors who want to dispose of these unwanted shares to neaten up their portfolios have previously been deterred by the cost of selling them. As a result, thousands of rands are tied up in assets that cost more to sell than they are worth, and portfolios are left in an untidy state.
A solution is for clients to donate their shares to charity by contacting SCS, either directly, or through their broker. Given the success of share donations, SCS will be enabling investors to include bond donations as well. Investors will be able to dispose of bonds as securities to neaten up their portfolios, as well as receive a tax benefit for doing so. In terms of Section 18(A) of the Income Tax Act, when investors donate their shares to SCS, they are issued a receipt that can be claimed against their taxation liability.
The people and companies involved in SCS all give their time and labour free of charge. Charities that have historically been the recipients of these donations are the African Children Feeding Scheme; Bethany House Trust; Child Welfare Tshwane; Cotlands; Guild Cottage; Nazareth House; Salesian Life Choices; Topsy Foundation and Zisize Educational Trust.
For more information regarding SCS, visit https://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 charityshares@computershare.co.za.
From a Thomas Murray AA- rating, to Strate being ranked among the top Central Securities Depositories globally, click here to view an infographic that tells you all the fast facts that you need to know about Strate.
| 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
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:
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Mr Robert Barrow (Chairman) Ms Monica Singer (CEO, Executive Director) Ms Ashnee Maharaj (CFO, Executive Director) Ms Alicia Greenwood Mr Chris Edwards Ms Daisy Naidoo Mr Keith Getz Mr Leon Campher
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Ms Marilyn Ramplin
Mr Murray Stocks Ms Nicky Newton-King Mr Nigel Payne Mr Raymond Ndlovu Mr Russell Loubser
Alternate Directors Mr Charl Bruyns Mr Ryan Proudfoot
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For the past 18 years Strate, South Africa’s Central Securities Depository, has focused on settling securities transactions across South Africa’s financial markets. Today, the organisation is 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.
Some pictures of the produce following the December Harvest:
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:
“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.”
Here are some pictures of the FIMO Awards ceremony:
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