Bobby Johnston, a former chairman of the JSE, has been appointed chairman of Strate, according to a release from the South African CSD.
He takes over for Mervyn King, who served as Strate’s chairman for the past 11 years.
Johnston was closely involved in Strate while it was a project at the JSE and became a non-executive director of Strate when the company was formed in 1998. He has been involved in the country’s financial markets since 1969, most of which time he worked as managing director of stock broking firm Lurie, Johnston & Co Inc.
Johnston is accredited with devising the horseshoe mechanism in 1999 when Strate first went live. This enabled securities and cash to settle on a gross, trade-by-trade basis, a systems requirement, where the business really required netting. To solve this cumbersome methodology, he recommended a system of netting trades at the end of each trading day, thereby eliminating the need to process each trade individually. The netting process occurred in three areas and eliminated the horseshoe problem.
At the end of 1996, I was Strate’s project manager; 2 years later I became CEO, says Strate CEO Monica Singer. In 1999, harmony opened the door to full dematerialization of the JSE. We faced some strong opposition from stakeholders and the market. Old habits die hard; investors clung to their paper share certificates. I bugged Bobby daily with endless questions, which he answered with painstaking patience. He was the brain; I was just doing the work.
In addition to his securities-related involvement through his full-time consultancy occupation and his non-executive directorships of Strate and the JSE, Johnston is the lead independent non-executive director and member of the audit committee of JSE-listed Mr Price Group. He is also a member of the FSB Enforcement Committee as well as its Licensing Committee and is an honorary life member of the SA Institute of Stockbrokers, where he still lectures to aspiring stockbrokers.
We at Strate create best practice – we don’t just mimic others, Johnston says.