About Us | Search | FAQ | Contact Us
South Africa has caught up
The South African Securities market
The South African Markets are embodied in the Johannesburg Stock Exchange (JSE), the Bond Exchange of South Africa (BESA) and the South African Futures Exchange (SAFEX). Evolution in the south African Securities markets is continuing at a rapid pace towards internationally recognised criteria and particularly the Group of 30 Recommendations
JOHANNESBURG STOCK EXCHANGE (JSE)
and Settlement Procedures
Currently settlement for the equity market involves the manual exchange of funds and scrip.
The net settlemewnt of equity trading positiions (broker to broker) takes place within the Equities Clearing House operated by the JSE.
It is envisaged that STRATE will be gradually phased in over a period of 18 months starting approximaztely in mid 1999 with a limited number of counters.
Some major features of STRATE include the following:
Initial settlement will take place ona contractual and rolling (t+5) basis (ultimately t+3).
Settlement of transactions will takeplace on a trade by trade basis, i.e., gross settlement.
Simultaneous, final and irrevocabledelivery verus payment (SFIDvP) entails the secure transfer of ownership with secure transfer of value.
The settlement process will interface with the National Payment System (NPS)
THE BOND EXCHANGE OF SOUTH AFRICA (BESA)
The process to immobilise bonds was initiated in October 1995 by BESAs predecessor, The Bond Market Association of South Africa
BESA was licensed in May 1996 and since then more than 95% of all listed bonds have been immobilised in the Central Depostory, although immobilisation of financial securities is still not required by stature.Settlement takes place in an electronic and netted fashion on a rolling (t+3) basis.Secure delivery versus paymet has been achieved for all bond market transactions via electronic settlement with scrip and funds transfers being handled by the major clearing banks, the CD and the SARB.
Settlement agents have direct access to the Central Depository (CD) and have clearing accounts with the South African Reserve Bank (SARB).
CENTRAL DEPOSITORY (CD)
The SARB is also represented on the Board of Directors of the CD and has the right to appiont the chairman.The CD is currently operating effectively in the bond market.
The National Payment System encompasses not only the clearing of payments between banks, for which an efficient infrastructure is already in place, but the total payment process - from payment-instruction issue through to final settlement between banks at the South African Reserve Bank.
The National Payment System is concerned with ensuring that non-cash payments are irrevocable and that risks, in particular systematic risk, are adequately contained.
SOUTH AFRICAN FUTURES EXCHANGE (SAFEX)
SAFEX took its place among the more advanced futures markets when it introduced an electronic trading systems (ATS) to complement its clearing and settlement system, both now operated by the Exchange and Clearing house.
Functions of the Clearing member
The main object of the Clearing member is to guarantee Settlements of all its members and member clients to and from SAFEX.
The clearing member also limits the sum of the risk of loss of the proprietary position of a non-clearing member and the clients of such member.
To set dealing limits to non-clearing members of SAFEX.
Accept trades on behalf of its non-clearing members.
Enforce all rules laid down by SAFEX.
Maintain all margins.
Accounting of all members and member clients.
Provide daily settlement statement.
Membership is made up of banks, JSE brokers, independant brokers, institutions, corporates and co-operatives.
Foreign participants require exchange control approval.
Several South African financial institutions offer custody and settlement services.
These services generally include:
specialised local and global (through strategic alliances) safe-keeping services;
clearing and settlement;
the handling of corporate actions;
income collection and distribution;
tax relief and reclamation;
banking facilities such as cash management;
|Home | About Us | Search | FAQ | Contact Us|