The main shareholders in South African CSD STRATE ( Share TRAnsactions Totally Electronic Ltd) are discussing with the Universal Exchange Corporation Ltd (“UNEXcor”) and The Central Depository Limited (“CD”) how best to cut costs and increase efficiency in clearing and settlement in South Africa.
They have agreed that a key element of this would be a standardized settlement environment and, accordingly, they have agreed that it would be in the best interests of South Africa’s financial markets for STRATE and UNEXcor and CD to integrate and bring our local settlement environment inline with international best practice and the recently updated G30 recommendations.
It is intended that the integration, which is conditional on the conclusion of the relevant agreements and obtaining the necessary Board and regulatory approvals, will be implemented using STRATE as the vehicle for the integration and through the issue of STRATE shares to UNEXcor and CD in exchange for the acquisition by STRATE of UNEXcor’s and CD’s businesses. The JSE’s shareholding in STRATE will, as a consequence of thistransaction, be diluted.
Monica Singer the CEO of STRATE has been appointed the CEO designate of the> integrated entity and Ray Ayres, the CEO of UNEXcor and CD, has been appointed the Executive Director Operations designate of the integrated entity. They will assume their positions in the integrated entity once the transaction becomes unconditional.
The first task of the management team of the integrated entity will be to plan how to utilise all the resources at their disposal to tackle all the new business developments required by the financial markets in this area. In this regard, the shareholders note that the three companies have committed staff who have contributed significantly to the development of the businesses and who should benefit from the new opportunities which will arise through the integration.
The JSE Securities Exchange, the Bond Exchange of South Africa and the Central Securities Depository Participants in the STRATE process welcome these developments.