STRATE, the South African CSD, has vowed not to increase its fees in 2006. It says that, with inflation in South Africa at approximately 4%, the standstill represents a discount for investors on the cost of settlement in real terms.
“This is the second year in a row that we are not raising our prices,” says Monica Singer, CEO of STRATE. “Accordingly, for a 24-month period STRATE’s clients will have achieved considerable savings in real terms – which dovetails neatly with STRATE’s strategy of striving to achieve what best serves the South African market’s interests.”
However, the banks that make up the STRATE shareholder base have not yet received any dividends on the capital that they injected into the company to set it up. They are concerned that the CSD is starting to compete with them.
Next year STRATE plans to extend its operations to the clearing, settlement and depository services of money market instruments, having already colonised the equity and bond markets.