Strate’s SAFE and MMFE applications to be Replaced by a New Centralised Messaging Front End

Strate has embarked on a project to replace its Southern African Financial Instruments Real Time Electronic Settlement System (SAFIRES) Front End, or SAFE, and Money Markets Front End (MMFE) applications with a Centralised Messaging Front End (CMFE). The application, which will be accessible via Strate’s Web Portal, will have an exciting look and feel that is easy to navigate and includes all the current SAFE and MMFE functionality, yet provides new enhanced message management and reduces SWIFT and Gateway message traffic.

 

Currently, SAFE or MMFE is hosted by clients and maintenance and upgrades take place at the clients’ premises. Given that CMFE is a web-based solution that requires a URL to access by approved users, clients will no longer have to run expensive maintenance and updates themselves, as this will only be done on Strate’s end. Clients may only be requested to test the service from time-to-time.

 

Strate considers client security to be of utmost importance, which is why it has incorporated technology into CMFE that only allows approved users to access the system as well as the content that they are authorised to view. Users need to be approved and need to have valid log-in credentials in order to proceed.

 

SAFE and MMFE are expected to be decommissioned by the second quarter of 2016 and it will be replaced by CMFE.

First Bonds Donated to Strate Charity Shares

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 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.

 

 

The Benefits of Strate for Listed Companies, Chartered Secretaries and the Financial Markets

Governance. Compliance. Risk. Three words that are well known to any chartered secretary. So when it comes to the post-trade environment and the processing of corporate actions, why should someone in the profession settle for anything less?

 

For close to two decades, Strate has provided the local market with the highest governance standards, compliance and effective management of risk. With transactions in excess of R130 billion daily, Strate is responsible for the settlement of money market securities, as well as equities and bonds for the Johannesburg Stock Exchange. It also provides settlement for a range of derivative products, such as warrants, exchange-traded funds, retail notes and tracker funds and it has recently added collateral management services to its portfolio.

 

The importance of a country’s clearing and settlement infrastructure cannot be undermined, as it supports the overall stability of the financial system as well as the implementation of monetary policy and efficient processing of transactions.

 

For CSD Participants, Strate offers Simultaneous Final Irrevocable Delivery versus Payment (SFIDvP) in central bank funds via the South African Reserve Bank (SARB), an accolade that eludes many CSDs – even in developed markets around the world.  It also maintains the official legal register of securities ownership in South Africa.

 

Today, in excess of 98% of the issued shares of all JSE-listed companies are in dematerialised form in Strate. It is this portion of the share register where Strate plays an integral role in the processing of corporate actions. These are executed electronically via straight through processing protocols that have dramatically increased the level of efficiency and mitigated risks in this space. From an equities perspective, this equates to some 160 events a month with an average cumulative value of more than R20 billion.

 

Corporate actions announcements represent a high-risk part of the securities processing business and the intricacies associated with such events continues to make the corporate actions arena one of the most complex post-trade activities to manage.

 

Strate attends to all the activities throughout the life cycle of the event, from the time the event is announced until payment is processed. Strate ensures that funds and shares are distributed to the CSD Participants, who in turn ensure that their clients receive their entitlements. From an issuer perspective this process is seamless and gives issuers the comfort of knowing that corporate actions are processed timeously and accurately to their shareholders thereby eliminating risk from the market. Since the inception of Strate, dividend claims have practically been eliminated.

 

Strate has also embarked on a new solution that is looking to enhance the current model even further so that corporate action payments are processed via central bank funds, i.e. via the SARB. The process, which went live during early October 2015, required very little change by the issuers who opted to use this solution. The new solution improves liquidity management and mitigates certain identified risks in the market.

 

Technology is evolving at a rapid pace and Strate wants the best-of-the-best technology for the market so that it can enhance the profile of South Africa’s financial markets, boost liquidity and align with global best practice. Strate is investing in the TCS BaNCS Market Infrastructure (MI) solution to replace its current settlement technology, consolidating three settlement systems into one. In line with global trends, the solution will also provide comprehensive support for both nominee and beneficial ownership account structures.

 

Strate has already begun the migration of money market securities into the new technology. This will be followed by a bonds and equities infrastructure replacement respectively. With regard to the new TCS BaNCS MI platform for bonds, it will bring a number of exciting benefits to the market other than those of the current UNEXCor system inherited by Strate. One such benefit is the provision of a securities ownership register (SOR) model, which will provide issuers real time access to information in the Beneficial Ownership Download, or shareholder register. (This is also something that is being explored for the BaNCS MI for equities).

 

The new bonds settlement infrastructure will also offer numerous settlement runs and no settlement exclusions, high-level straight-through-processing across all aspects of the bond market and additional functionality to accommodate complex structured products.

 

While the introduction of Strate over 17 years ago led to an adoption of a modern electronic-based settlement and clearing model, which has eliminated a number of associated risks, the use of Strate’s value-added services cannot be overlooked. When investing in South Africa, there is no doubt that one should never settle for anything less than Strate in the post-trade environment.

 

 

India’s National Securities Depository Ltd signs MoU with Strate

India’s CSD, National Securities Depository Limited (NSDL), has signed a Memorandum of Understanding (MoU) with Strate to build a close cooperative relationship between the central securities depositories.

The MoU aims at co-operation in securities depository and settlement related matters to help foster the prosperity of their financial markets, promote cross border investment, and explore opportunities for cooperation in both, depository and settlement. Both CSDs anticipate…

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The Express Line

The JSE’s move to a T+3 settlement cycle for the equity market is moving swiftly ahead this year, with the aim of aligning with global best practice, boosting efficiency and reducing risk. Change is inevitable. This has been a long time coming,” says the JSE’s Leila Fourie, Director of Post-Trade and Information Services. “The JSE is adamant that it would like to move and align with the rest of the world…and it’s coming together well.”

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The Roles of a CSD: Player and Referee

Strate’s business is to provide post-trade securities services to clients in its financial markets (referred to as the CSD function). Strate’s clients are CSD Participants, who in some cases, are also its shareholders. Strate also operates as a regulatory authority. How does it reconcile these roles as both player and referee?

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