Presentation on theme: "STRATE THE CLEARING & SETTLEMENT & DEPOSITORY FOR ALL FINANCIAL INSTRUMENTS IN SOUTH AFRICA Punte del Este, Uruguay 27 October 2005 Monica Singer CEO-"— Presentation transcript:
STRATE THE CLEARING & SETTLEMENT & DEPOSITORY FOR ALL FINANCIAL INSTRUMENTS IN SOUTH AFRICA Punte del Este, Uruguay 27 October 2005 Monica Singer CEO- STRATE Ltd (S.A.)
2 STRATE Overview Electronic clearing, settlement & depository services for equities listed on the JSE and some unlisted companies, bonds & money market instruments (Mid 2006) The Licensed Central Securities Depository for all financial instruments (excluding derivatives and unit trusts) in South Africa Electronic transfer of ownership using STRATE technology Transfer of value via the Central Bank (SARB) Beneficial Ownership download and other services to listed companies
3 Vision We are committed to be the trusted and preferred centralised provider of products and services which are accessible to, and create value for, our current and future stakeholders.
4 Volumes of transactions in Bonds as at end September 2005 Redemptions for year ending 30 September 2005 = USD 16 billion Interest payments for year ending 30 September 2005 = USD 8.2 billion Exchange rate USD 1 =R months 2005 Annual VolumesUSD 1.8 trillionUSD 1.64 trillionUSD 1.29 trillionUSD 0.95 trillion Number of daily trades Market CapitalisationUSD 72.8 billionUSD 86.8 billionUSD billionUSD billion Liquidity24.6X18.9X12.5X11.5X No of Instruments
5 Volumes of transactions on Stock Exchange Listed Securities as at August months 2005 Annual VolumesUSD134 billionUSD 125 billionUSD 172 billionUSD 129 billion Number of daily trades3.7 million3.25 million3.91 million3.07 million Market CapitalisationUSD 264 billionUSD 297 billionUSD 428 billionUSD 429 billion Number of Listed Companies USD 1 = R6.00
6 Success in STRATE in chronological order October 1996-project begins November 1999 to 2001 pilot project with 14 listed companies into STRATE, 617companies to go March to December 2001 all listed companies move into STRATE August 2003 –merger with company that settles bond Currently there are 389 listed companies listed on the Johannesburg Stock Exchange
7 Shareholders of STRATE Ltd Johannesburg Stock Exchange 41%59% ABSA Bank Nedcor Bank Standard Bank First Rand Bank Citibank 41%59% STRATE Ltd
8 Board Members Chairman: –Mervyn King Johannesburg Stock Exchange: –Russell Loubser –Bobby Johnston Banks: –Stuart Yates (FirstRand) –John Stathoulis (Standard Bank) Non Executive Independent Directors –Rick Cottrell –Sindi Zilwa –Raisibe Morathi –Heather Sonn –Annamarie van der Merwe –Leon Campher Executive Directors: –Monica Singer – CEO –Erna Solomon – COO
9 Dematerialisation Required in terms of the JSE Rules Can be rematerialised but a penalty is charged New listings do not require the issue of share certificates
10 Dematerialised in STRATE Dematerialisation of listed securities as at September 2005 Held by investors in certificated form outside of STRATE
11 Bonds dematerialised in STRATE as of March 2005 Total market capitalisation as at March 2004 R556 billion 9% 25% 66% Held outside of STRATE as block of securities Immobilised under STRATE Dematerialised under STRATE
12 Message flow in South Africa Client JSE member Delivering CSD Participant Receiving CSD Participant SETS BDA SAFIRES Transfer Secretary Registrar SAMOS
13 The electronic contractual and guaranteed settlement No transaction has ever failed to settle in STRATE All dividends for listed shares and interest for bonds have been paid to the investor on time.
14 Key lessons learnt from the implementation of STRATE in South Africa The implementation of an electronic clearing and settlement of financial instruments is of national interest, with efficiency the volumes increase The brokers and the banks have to work together with the Central Bank in order to achieve the electronic delivery vs payment in Central Bank funds The Central Bank should implement a Real Time Gross Settlement system for the cash settlements The financial instruments should be dematerialised The technology is available. Do not reinvent the wheel Allow for the borrowing and lending of securities in order to enable the settlement of trades on time Assign ISIN codes to all financial instruments.
15 Current and Future Projects Finalise implementation of settlement of Money Market Instruments Migrate the settlement of bonds to SAFIRES Implement the Alternative Settlement Model (ASM) Improved corporate action functionality Settlement for unlisted companies Settlement of trades of other African stock exchanges Expand the newly acquired Registrar business
16 Contact For more information contact STRATE: Telephone Number: / 5311 Fax Number: Website: Monica Singer
17 Thank You! The South African Central Securities Depository