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1 www.jse.co.za Copyright© JSE Limited 2009 www.jse.co.za JSE Equities - Moving to T+3 21 October 2010 London.

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Presentation on theme: "1 www.jse.co.za Copyright© JSE Limited 2009 www.jse.co.za JSE Equities - Moving to T+3 21 October 2010 London."— Presentation transcript:

1 1 Copyright© JSE Limited JSE Equities - Moving to T+3 21 October 2010 London

2 2 Moving to T+3 – Agenda  Phases so far  Outputs per Phase  T+3 Settlement Cycle  Timelines  Phase 4

3 3 Moving to T+3 – Phases so far Phase 1 Producing a document detailing the potential barriers and the high-level activities to overcome such barriers (to accompany the JSE’s 2008 licence renewal application) Phase 2 Nomination of responsible parties to further the investigations within their working groups, coordinated by the JSE, with their combined outputs being the creation of a “Blueprint for T+3” document Phase 3 Impact analysis and agreeing an implementation plan for T+3 with all market participants

4 4 Phase 1 – Outputs  The JSE submitted the document detailing the barriers and the high-level activities to overcome such barriers to the FSB with the JSE’s 2008 licence renewal  10 Barriers were raised with 58 action areas  The FSB accepted the document and requested a quarterly update on the status of the action items  The JSE initiated Phase 2 with the parties that would address the 58 action items

5 5 Phase 1 – Barriers and Action Areas

6 6 Phase 1 – Key focus areas 6 key focus areas were identified -  High level of automation  Standardisation Pre-trade and Post-trade  Harmonisation  Corporate Actions  Securities Lending & Borrowing  Settlement Assurance – JSE guaranteeing of settlement These cover all the barriers and action items

7 7 Phase 2 – Outputs Phase 2 was about –  Getting the nominated parties to further investigate the action items and identified issues and define solutions (the “blueprints”)  Creating Business Requirement Specifications that are signed off by the market  Completing a Blueprint (by the JSE in May 2009)

8 8 Phase 3 – Outputs Phase 3 was about –  The Impact Analysis and Implementation Plan for moving to T+3  Detailing how the transition from T+5 to T+3 is going to be managed  Making changes immediately, where possible, as opposed to waiting for implementation (this has already started)  Development of systems changes for T+3 for implementation after the JSE’s System Replacement Programme goes live The Impact Analysis and Implementation Plan were completed in April 2010

9 9 Phase 4 Phase 4 is about -  Focus on automation  Project Management  Systems Development  Management of Timelines  Changes to Listing Requirements  Changes to JSE, NSX and Strate Rules and Directives  Marketing and Education  Making sure everyone is ready to go-live  Go-live

10 10 New Settlement Cycles TypeSettlement Cycle Reporting Time Commit/BTB Time BTB RM Removal Reverse Subs SAT/SLB BP Reporting Commit for SA/SLB BP JSE On- market T+315h00 (S-1)15h15 (S-1)16h00 (S-1)17h00 (S-1)18h00 (S-1) JSE Same Day (SLB) T+010h00 (S)11h00 (S) JSE Same Day (MLB) T+010h00 (S)11h00 (S) JSE Rolling of Settle T+011h00 (S)12h00 (S) JSE Roll of Settle new legs Min T+211h00 (S- 2) 15h00 (S-1)15h15 (S-1)16h00 (S-1)17h00 (S-1)18h00 (S-1) JSE Give- Up T+011h00 (S)12h00 (S)

11 11 New Settlement Cycles cont. TypeSettlement Cycle Reporting Time Commit/BTB Time BTB RM Removal Reverse Subs SAT/SLB BP Reporting Commit for SA/SLB BP Depository Receipts Min T+111h00 (S- 1) 15h00 (S-1) Off-marketsT+311h00 (S- 1) 15h00 (S-1) Acct Transfers Min T+018h00 (S) Portfolio Moves Min T+018h00 (S) SLBMin T+113h00 (S- 1) 14h00 (S-1) SLB Returns Min T+117h00 (S- 1) 18h00 (S-1) Acct Trfrs/ Portfolio Moves RD Min T+009h00 (S)10h00 (S)

12 12 T+3 On-Market Settlement Cycle

13 13 On-market Activities (current vs future) ActionCurrent Timings – T+5Future Timings – T+3 Settlement Orders (non-controlled clients) T - BatchT – Real-time (after allocations) Client Affirmation to CSDP/Rejection to Broker T+2 (12h00)T+1 (18h00) Deemed Affirmation ClientT+2 (12h00)T+1 (18h00) Broker re-allocationT+2 (16h00)T+1 (18h00) Client affirmation of re-allocationT+2 (16h00)T+1 (18h00) Brokers netsT+2 (EOD)T+1 (EOD)

14 14 On-market Activities (current vs future) ActionCurrent Timings – T+5Future Timings – T+3 Non-controlled client breachT+3 (12h00)T+2 (12h00) Principal AssumptionT+4 (10h00)T+2 (16h00) MarginingT+3 (EOD)T+1 (EOD) Broker borrowing on Principal Assumption T+4 (10h00 to 12h00)T+2 (16h00 to 18h00) Settlement Authority SLBT+4 (12h00 to 16h00)T+3 (08h00 to 10h00) Failed Trade/Rolling Of SettlementT+4 (16h00 to 18h00)T+3 (10h00 to 12h00) SettlementT+5T+3

15 15 Corporate Actions Mandatory Events

16 16 Mandatory Event Information The minimum required information on Declaration Date for Mandatory Events must be:  Last Day to Trade (Cum), Ex Date, Record Date and Expected Pay Date  Cash Rates and Share Ratios can be announced no later than Finalisation Date by 12h00  Exceptions to this will be dealt with on a case by case basis  If applicable (Mandatory Security or Mandatory Cash and Security):  Delisting Date/Termination Date, Suspension Date, Effective Date  New ISIN

17 17 Mandatory Event Information cont. The Market has agreed on the following:  Should not all information have been made available on Declaration Date then the cut off date for the Event Finalisation should be no later than 12h00 on Finalisation Date  Exceptions to this will be dealt with on a case by case basis  Record Date will always be a Friday. In the event of a Public Holiday, Record Date will be the previous business day.

18 18 Elective Events – Excluding DRIPs

19 19 Elective Event Information The minimum required information on Declaration Date for Elective Events must be:  Last Day to Trade (Cum), Ex Date, Record Date, Expected Election Deadline Date and Expected Pay Date  Cash Rates and Share Ratios can be announced no later than Finalisation Date by 12h00  Exceptions to this will be dealt with on a case by case basis  Default Option and whether Part Elections and/or Restrictions are applicable  Elections will be sent to Strate at 13h00 with amendments until 14h00

20 20 Elective Events - DRIPs

21 21 Elective Event – DRIPs Information The minimum required information on Declaration Date for DRIPs must be:  Last Day to Trade (Cum), Ex Date, Record Date, Expected Election Deadline Date and Expected Pay Date SA Rate Conversion Rate  SA Rate Conversion Rate announced no later than 12h00 Finalisation date  Dividend Rate in foreign currency and whether Part Elections are applicable  Restrictions  All announcements on Finalisation Date will be made by 12h00

22 22 Fractions  It has been agreed by the market that for all companies listed locally, the rounding convention utilised will be to round down all entitlements. Fractional payments will be paid in cash, with a tolerance level to be decided on at a later stage  Spreadsheets will still be required for IPO’s and surplus rights  For Foreign and Dual Listed Companies – their rounding conventions will apply

23 23 High-level Timelines Communication3 rd Quarter 2010 to 4 th Quarter 2012 Internal Development3 rd Quarter 2010 to 2 nd Quarter 2011 Internal System Testing2 nd Quarter 2011 to 3 rd Quarter 2011 External System Testing 3 rd Quarter 2011 to 2 nd Quarter 2012 User Acceptance Testing2 nd Quarter 2012 to 4 th Quarter 2012 Go-live4 th Quarter 2012

24 24 Dependencies  JSE’s System Replacement Programme (SRP) – if pushed out will push out T+3  Regulatory or legislative changes  Market changes – SRG, etc  SRG 2012 – decision has to be made in April/May 2012 go or no-go for T+3  Corporate Actions – decision has to be made in April/May 2012 go or no-go for T+3

25 25 Contact Details Brett Kotze General Manager: Clearing & Settlement JSE Limited One Exchange Square, 2 Gwen Lane Sandown, South Africa Tel: Fax: Web:www.jse.co.zawww.jse.co.za


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