Beneficial Disclosure (BND) Reporting
Strate produces the BND by collating shareholder positions from information which is supplied by CSD Participants, Brokers and Approved Nominees. The attached slide illustrates how the data is disclosed by the various parties and explains the reason that Strate is unable to identify any incorrect balances between registered owners. The sub-register of ownership is recorded and maintained by the CSD Participants in the current model employed for equities and bonds.
A CSD Participant may hold one or many safe custody accounts in the books of Strate and must disclose the total number of shares which is held in each account. The disclosure by the participant is made up of the following:
- The total number of shares held by their Nominee Company
- The underlying shareholders holding shares in the Nominee Company.
- The total number of shares held by their Approved Nominees, where applicable
- The total number of shares held by the Broker Nominees
The Approved Nominees and the Broker Nominees disclose details of the underlying shareholders which must balance with the total amount disclosed by the CSD Participant for that particular Nominee.
Upon receipt of the files our application validates that the mandatory fields are populated by the disclosing party. The onus is therefore on the market participants to provide data in accordance with the agreed file layout and naming standards.
Once validation is complete, a pre-reconciliation process is undertaken to ensure that the gross positions agree between the CSD Participants and Strate. Where the reported quantity is at variance, Strate do not proceed with the BND disclosure unless the CSD Participant is able to identify the problem and have advised Strate that they are not in a position to provide a replacement file. In these instances, we will, on notifying our Supervision Department, continue with the run.
The final phase of the BND run will be the reconciliation between the positions which have been disclosed by the CSD Participants and the positions which have been disclosed by the Brokers and the Approved Nominees. Although we ensure that the positions agree, we have no mechanism to ensure that the amounts as disclosed for the beneficial owners are correct.
As the market participants’ records are the official records of ownership for dematerialised shares, Strate are unable to identify which shareholders’ positions may be compromised when an out of balance file is submitted and processed.
Strate currently provides the following reports, all of which can be customised in accordance with your requirements:-
- Beneficial download – weekly or monthly
- Comparison of Holdings (between either the weekly or monthly disclosure)
- Top Beneficial Owners and top Registered Holders (i.e. Bank, Broker and Approved Nominees), including the percentage of the issued shares (certificated and dematerialised) which is held by each dematerialised shareholder
- Breakdown between Resident and Non-Resident dematerialised shareholders
- Summary of Shareholders by Country
- Dematerialised Shareholders by Band
- Trade Settlement Report
Sample value added reports
- Monthly Comparison
- Res Non-Res Breakdown
- Shareholders by Band
- Shareholders by Country
- Top 20
- Trade Details
click here to view a sample of the BND Reconciliation
Please feel free to contact Carol Otto on 011 759 5325 or carolostrate.co.za