At the heart of what Strate does, is the safeguarding of ownership rights for public and private market securities in South Africa. These records, held digitally, represent the legal record of ownership for all equities, bonds, money markets and participatory notes in collective investment schemes (ETFs) entrusted to Strate for safekeeping.

The Settlement Services team plays a vital role in ensuring the essential legal record of ownership is maintained through ongoing facilitation of the process leading up to settlement.

Settlement Services work closely with Central Securities Depository Participants, business partners, clients and exchanges to resolve settlement issues.

With their extensive knowledge of the securities industry and having completed the Strate Compliance exams, this highly-skilled team has the expertise to find the best solutions to ensure settlement happens.

Meet the Settlement Services team:

As a key financial market infrastructure, Strate has to be resilient, adapt to changes and manage risks to ensure financial market stability. Strate’s Chairman Nigel Payne has an in-depth understanding of resilience after having completed the Freedom Challenge, a gruelling South African mountain bike race, no less than five times. We asked him why and how he does it, and how he builds the resilience that helps him navigate the tough times.

What is the Freedom Challenge?

The Freedom Challenge is a 2 150km mountain bike race across South Africa, starting in Pietermaritzburg, in the east of the country, and ending in Paarl, in the south-west. Taking place in the middle of the South African winter, the race is unsupported and riders have to use paper maps and compasses to navigate their way to across the country. The race supports education by giving scholarships to children to attend private school. The race started 18 years ago, and at the end of July 2021, 298 people had completed the Freedom Challenge in the allowed 26 days.

Why do you do the Freedom Challenge?

It is fun, most of the time, and I am a mountain biker who loves the hard races. I race with my brother, who has been through some tough times. He made it through and together we have made it through the Freedom Challenge. I also love meeting the people of South Africa, who are warm, welcoming, unbelievably generous and very resilient! The Freedom Challenge is unique. You have to rely on yourself and your equipment. You have to prepare, learn from others and past races and mistakes, and you have to get up and do it, every day. No one else is there to complete the challenge for you.

How many Freedom Challenges have you completed?

Five. Four of those have been with my brother. I am up for number six, having entered the 2022 race.

What makes the Freedom Challenge such a tough race?

We have to find our own way around. This is tough because we are used to GPS and talking directions. On the race we have paper maps, a compass and descriptions that tell you to look for the spiky mountain and go around it anti clockwise! That’s a challenge. And, the race is unsupported. So we have our bikes, a backpack with a few supplies, and that’s it! We can send a few items forward to designated spots, but they have to fit into a two-litre ice cream tub.

How do you get through the difficult times?

You become resilient. Resilience comes from being prepared and managing the risks. Preparation is key. Without the right gear and the right bike and anticipating tough times and what we need to do to get through them, we wouldn’t be able to complete the race. Teamwork also matters. Even though we are on our own riding across South Africa, we have teams back home supporting us who have helped us prepare for the race, from sharing route ideas and information to showing us how to repair damaged bicycles.

Tell us more about the route you take?

We go over the Drakensberg and then across the Karoo. It’s all off road and very isolated. We climb a lot of mountains, some on foot with our bikes on our back. We spend about three hours a day walking – you just can’t ride through the more rugged terrain. We bypass the Addo Elephant Park, which is in the middle of the route. It’s too dangerous to bike there. Over the years we have learned to follow animal tracks, Eland in particular, who have been travelling the country for years. Their tracks are some of the best routes to take.

How do you deal with racing in winter?

You wear a lot of clothes, and make sure you have some waterproof gear to protect you in the rain. It does rain, it snows, and this year we experienced hail, which was really challenging. I wear six layers of kit, including snow suits and a balaclava. The temperature can drop to minus 14 degrees Celsius.

Do you carry on riding through bad weather?

Sometimes. A big part of the race is managing the risks. Humans can survive being cold or wet, not both. You have to know when to stop and take shelter if conditions are just too dangerous or your kit doesn’t offer enough protection. That’s a big part of the race, and similar to what we do at Strate. We have to identify the risks and assess them, and find ways to manage them.

Do you ride at night or sleep?

Both! Sometimes we ride through, although on our first race we didn’t because we were scared of riding in the dark. Sometimes we sleep – either by the side of the road, in a tent we carry in our

backpacks, or a bed kindly given to us by the people we meet on the route. At designated points there is a bed waiting for you – if you make it to the right place in time.

What happens if your bicycle is damaged?

You repair it yourself or ask another rider for assistance. We have no mechanics and cannot ask for outside assistance. The choice of bicycle is really important, it’s our infrastructure and system. Before we start we have to make sure it is in the best condition possible, and that we know how to fix the problems that might arise when they do. Just like Strate, we have to have the right infrastructure and systems – and keep them up and running all the time.

How tough is the race emotionally?

Very. We are out of contact with our families and work, unless there is an emergency. The race does track us via satellite, so the race organisers know if we are too far off course. But we are out in the country, on our own with our backpacks, and in my case, my brother.

When you’ve had a really hard day, been through hail and ridden through the night, you are exhausted. Your emotions can swing from high to low. The lows, though, are followed by highs. It helps to know that once we’ve climbed one mountain we will go downhill, which I love. We also know our families are supporting us, even if we are not in contact. I also follow the advice my daughter tattooed on her arm: “One day at a time”. Sometimes that is all you can do. When you do enough of those days, you become resilient and know you can make it through the tough times.

What are your favourite race memories?

There are so many, but two stand out.

The first – the people of South Africa. They are so generous and welcoming. Strangers will come out to greet us and offer us food and shelter, which we pay for. Vuvu, in the Eastern Cape, is one community that stands out. They have water rations of 20 litres a day, and yet when we arrive in Vuvu there is water for us, to wash and drink. It is humbling and inspiring.

The second standout is the beauty of our country. Our route takes us to some of the most remote places in South Africa, so we get to see some amazing scenery and wildlife, that is also amazing.

As South Africa’s trusted and principal central securities depository and central collateral platform, we are pleased to announce that we have enabled 4 Africa Exchange (4AX) to extend its services to the open market.

4AX has been one of Strate’s equity exchange clients since 2018. To date, we have offered registry, settlement and corporate action services to 4AX within a closed market structure. After successful market testing and implementation, we have enabled 4AX to extend these services to all investors across bonds and equities security types in both the public and private markets. In addition, 4AX has employed our Integration Services to enable their open market model.

The services went live on 23 August 2021.

We would like to thank 4AX for their confidence in our services and the supportive working relationship we have established while implementing the new offerings.

Strate looks forward to continuing to build our relationship and support 4AX in the future as we continue to serve the financial markets.

Please do not hesitate to contact Strate to discuss how we can partner with you to support your business.

We were delighted to welcome our clients and other stakeholders to our market advisory virtual event, Strate Nexus, on Tuesday. 

Our guest speaker Dominic Hobson, co-founder of the Future of Finance and frequent contributor to the Financial Times, BBC and Financial News, gave deep insights into tokenised assets, why they matter and how they may impact South Africa. He left us with a range of questions to think about from the point of view of stock exchanges, asset or wealth managers, custodian banks, central securities depositories, central counterparty clearing houses and payments bank or payments service providers.

Hobson warned against complacency when it comes to initial coin offerings (ICOs), blockchain and decentralised finance (DeFi ) as the underlying social forces and technology which drives them are “remorseless”.

Hobson ran a poll of today’s audience and found that one in five attendees worked for a company that is brokering or investing in crypto-currency. While small, this is a growing area.

Hobson also considered the future of tokenised assets –digital assets created on a distributed ledger or blockchain, which represent either digital or physical assets. He believes tokenised assets will create whole new asset classes and have “immediate and profound consequences” for the securities industry everywhere.

Andre Nortje, Strate CEO, said Strate is looking in-depth at the future of tokenised assets in relation to a CSD in South Africa. We will share our insights on this topic in more detail in future.

Gregory Naicker, Head of CSD Services, gave an update on our e-Voting service, explaining Strate has seen an increase in market interest from clients who want to overhaul their paper-based voting systems to a seamless, digital experience.

As one client put it: “Strate’s e-Voting solution provides ease in managing what traditionally was a complex, extremely manual and error prone process.”

Thank you to all participants who joined us today.

How did you find yourself on this career path?

I initially studied at RAU and obtained both a BCom Law and BProc degree. After varsity, I started out working at two Strate Participants, FNB and then Standard Bank, before joining Strate in 2003. I was part of the Strate project team that implemented electronic settlement at FNB and then moved to Standard Bank as training manager.

When I joined Strate, the Supervision division had just been established and I was responsible for running the Strate examination programme, as well as setting up and developing some of the supervisory tools used to monitor the various Participant-related activities. Eventually I moved into a manager position, and now head up the division I started in.

What and who inspires you?

I learnt a great deal from my previous manager and mentor and will be forever grateful to her for the lessons I have learnt in both my professional, as well as personal life.

Passionate go-getters also inspire me – people that aren’t afraid to make mistakes or challenge the norm.

What advice would you give to anyone starting out their careers?

Don’t be afraid to make mistakes or change what you are doing if you are not happy! Sometimes we get so comfortable in what we are doing that often change, any change, can be intimidating and unnerving. Embrace change and don’t be scared to try new things. At the end of the day most things are about the outcome or results. Who says there is only one way to do things… If you can achieve the same outcome by following a different (maybe easier) route, why not!

What has been the most valuable skills you have ever learned? And how has this helped your career?

Attention to details is particularly important, especially in the environment that I work in. Learning to deal with people at all levels has also been invaluable. Whether it be junior staff or senior execs or directors, treating everyone with the same amount of respect is of paramount importance.

Keeping your word and delivering what you promised is also vitally important to build trust.

Strate fully supports the Protection of Personal Information Act (POPIA), which came into full operation on 1 July 2021. Due to the requirements of POPIA, we have ceased to provide beneficial holdings data services to clients from 30 June 2021. The last instance in which holdings data services were provided is in the last shareholder reports issued and dated 25 June 2021.

The data that Strate provided in respect of the beneficial holders of listed and unlisted securities falls directly within the ambit of POPIA.

We recognise that this data promotes the transparency of the South African financial markets and is essential to the services provided by some of our clients. We have had constructive engagements with the Financial Sector Conduct Authority (FSCA) to obtain guidance on the impact of POPIA on these data services and providing the holdings data to clients.

The FSCA has sought direction on this matter from the POPIA Information Regulator, which monitors and enforces compliance with the provisions of POPIA.  We await the outcome of these engagements. The regulatory requirements of POPIA are clear about the rights of data subjects and non-compliance with the Act carries substantial regulatory sanctions. In light of this, the decision was taken to uphold the right to privacy and to stop providing this data until there is clear guidance on the matter.

We will continue to engage with the regulators in the hope of achieving an exemption or other regulatory guidance to promote transparency in the South African financial markets. We will keep our clients informed of any updates.

In line with Strate’s purpose of serving the financial markets, we work closely with our stakeholders to introduce digital solutions to meet the evolving needs of the ecosystem. We have been working with Rand Merchant Bank (RMB) on their front-end marketplace called Intengo.

Intengo is the first digital platform supporting the issuance process for debt securities in private markets. Intengo, launched in June 2021 by RMB, allows debt issuers and investors to digitally transact in a seamless manner.

Fixed income issuers, through a digital access point via Strate, can create ISINs, report unlisted fixed income transactions for post-trade matching and settlement, and facilitate corporate actions and registry services for unlisted bonds and money market security types.

“The Intengo and Strate partnership is another example of how we create innovative solutions that benefit and support our clients in line with our purpose of servicing the financial markets,” says Gregory Naicker, Head of CSD Services.

“Through the strategic partnership between Intengo and Strate we endeavour to meet both our issuer and investor client needs through a differentiated digital marketplace which will pave the way to make fixed-income solutions more accessible to the broader market,” says Emrie Brown, Head of Banking Division at RMB.

The Intengo partnership went live with Strate on 28 June 2021 and will start rolling out to clients to offer unique lending and investment opportunities to the market.

For further information, please email csd-services@strate.co.za

Gregory Naicker, Head of CSD Services for Strate, was nominated and appointed as Vice Chair of SWIFT Users of South Africa (SUSA), a voluntary association of SWIFT users in South Africa, effective 01 May 2021.

SUSA is responsible for promoting the use of SWIFT and serves members by representing their interests to government, regulators and other local or international associations.

Strate’s long-standing involvement with SWIFT dates back to 1999 when it became the first financial market infrastructure globally to use ISO 15022 standards and SWIFT as the messaging layer.

South Africa was the first country in the world to use ISO 20022 standards in the local payment’s environment through the corporate connectivity project for credit transfers and direct debits that started in 2007.

Strate is proud to continue its involvement with SWIFT, and with Gregory Naicker as Vice Chair, continue serving the financial market and supporting the important role of secure financial messaging.

Read more about Strate’s SWIFT services here.

More about SWIFT can be found here.

How did you find yourself on this career path?

To be honest, I sometimes think that this career chose me. I was running away from a career in legal advice and found that regulatory risk management suited my qualifications at the time. Throw in an inspiring mentor, and a deep love for regulatory risk management was born. That was the springboard that launched me to where I am today.

What and who inspires you?

So many things inspire me but I will make specific mention of two. The first is the women I am privileged to know on a personal level. Witnessing their dedication, commitment to excellence and unwillingness to accept failure as a foregone conclusion in the face of adversity, inspires me.

These testaments range from pursuing personal dreams, completing tertiary education qualifications, to managing international organisations. They have shown me that it does not matter how small or big the achievement, if it is worth having, it is worth working hard for until the point of success.

The second thing is a quote by Steve Jobs. In a nutshell, the quote challenges you to push past the barriers of societal expectations and make your own defined mark on the world. No matter how small the mark, it is worth taking that step. Nothing great has ever been achieved without pushing against the “barrier”.

What advice would you give to anyone starting out their careers?

Be open minded. We all start our journey stepping out of the proverbial front door, we know the end destination but we all take different routes getting there. Each route has its risks and rewards.

You cannot compare yourself to others as we all have different aptitudes that serve us differently. Learn from others. Invest in your relationships, they will be your biggest asset. Use your time wisely.

Know when to be still and when to take action. And if you are in doubt, there is no shame in asking for help.

What has been the most valuable skills you have ever learned? And how has this helped your career?

The irony of this skill is that it is not one that comes naturally to me. It is patience – or let me qualify by saying the right amount of patience. I have learnt that sometimes in order to move fast, you need to go slow. Taking time to understand, time to learn and time to plan usually yields a better result than rushing into things without due consideration.

In this line of work, the ability to analyse and determine the best response requires time. That analysis however needs to be completed with an appropriate level of urgency to suit the situation.

The second skill, is the importance of transparency. With me, what you see is what you get. Building credibility is founded in consistency and reliability even when the conversations are difficult. My integrity is my biggest asset in this line of work.

Strate’s e‐Voting platform has reached a significant milestone with the onboarding of Momentum Metropolitan Holdings Limited and Standard Bank.

Momentum Investments, one of the operating brands within Momentum Metropolitan Holdings, becomes the first investment management services provider to partner with Strate’s e‐Voting. Standard Bank and Momentum Investments become early adopters and pioneers in shaping and driving digitised shareholder voting, enhanced shareholder engagement and improved corporate governance.

“As an innovative brand, we are proud to be the first investment management service provider to partner with Strate’s e-Voting platform. Good governance is a cornerstone of responsible investing and having an efficient and effective mechanism to exercise proxy votes is a key mechanism to hold companies and their leadership to account,” says Theo Terblanche, Executive Head of Investment Management, Momentum Investments. 

Standard Bank’s Senior Custody Product Manager, Sheron Botha, added: “As digital adoption increases, we are exploring different solutions for our clients’ varying needs. The e-Voting project has been an example of just that for an asset manager such as Momentum. Standard Bank is keen on partnering with our clients on their respective journeys to adopt digital solutions to both increase automation and mitigate risks. We are proud to have worked closely with Strate and Momentum to enable this solution.”

Strate’s e-Voting aims to significantly improve the way shareholder voting is conducted in South Africa, ensuring that there is increased transparency across the value chain from investors to issuers.

Benefits include:

Real time voting from any location

Ability for voters to change their vote at any time before meeting close

Ability for voters to direct questions to the meeting chairperson

No manual intervention at any stage in the value chain

Improved corporate governance through interactive, audited reports

Data security using Nasdaq’s blockchain technology

A true end-to-end solution

Annual general meetings (AGMs) serve a critical role as they provide one of the few opportunities for shareholders to engage with the company’s directors, raise questions and issues that concern them and vote on matters affecting the business.

The adoption of digital solutions for shareholder meetings is long overdue. South Africa’s financial markets industry has been grappling with the problem of a fragmented, paper-based environment for shareholder meetings for more than three decades. Most shareholders in South African companies do not attend AGMs but submit a written proxy in advance authorising the chairperson, or another representative, to vote according to their specified wishes. This is done either via email, hand-delivery to the company, or even by post.

Co-developed with leading global technology provider Nasdaq, the innovative, groundbreaking e-Voting platform enables virtual shareholder meetings and allows investors to communicate directly with companies, providing a fully digitised experience that seamlessly connects issuers and investors.

Strate’s Head of CSD Services, Gregory Naicker, commented: “As Strate continues on its journey of serving the financial markets by enabling digitisation, it has been our privilege to have collaborated with Standard Bank and Momentum Investments to implement the e-Voting platform service.”

Contact e-Votingteam@strate.co.za to find out how Strate’s e-Voting platform can enhance shareholder engagement and improve corporate governance.