jse equities - moving to t+3

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www.jse.co.za

Copyright© JSE Limited 2009

www.jse.co.za

JSE Equities - Moving to T+321 October 2010London

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www.jse.co.zawww.jse.co.za

Moving to T+3 – Agenda

Phases so far Outputs per Phase T+3 Settlement Cycle Timelines Phase 4

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Moving to T+3 – Phases so far

Phase 1 Producing a document detailing the potential barriers and the high-level activities to overcome such barriers (to accompany the JSE’s 2008 licence renewal application)

Phase 2Nomination of responsible parties to further the investigations within their working groups, coordinated by the JSE, with their combined outputs being the creation of a “Blueprint for T+3” document

Phase 3Impact analysis and agreeing an implementation plan for T+3 with all market participants

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Phase 1 – Outputs

The JSE submitted the document detailing the barriers and the high-level activities to overcome such barriers to the FSB with the JSE’s 2008 licence renewal

10 Barriers were raised with 58 action areas The FSB accepted the document and

requested a quarterly update on the status of the action items

The JSE initiated Phase 2 with the parties that would address the 58 action items

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Phase 1 – Barriers and Action Areas

Straight-through processing

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Securities lending & borrowing

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Moving shares between registers

4 Corporate actions

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Systems availability

1

Providing settlement assurance

5

Central securities register

0

Off-market transactions

9Dematerial-

ization4

Real-time trade processing

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Phase 1 – Key focus areas

6 key focus areas were identified -

High level of automation Standardisation Pre-trade and Post-trade Harmonisation Corporate Actions Securities Lending & Borrowing Settlement Assurance – JSE guaranteeing of

settlement

These cover all the barriers and action items

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Phase 2 – Outputs

Phase 2 was about –

Getting the nominated parties to further investigate the action items and identified issues and define solutions (the “blueprints”)

Creating Business Requirement Specifications that are signed off by the market

Completing a Blueprint (by the JSE in May 2009)

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Phase 3 – Outputs

Phase 3 was about –

The Impact Analysis and Implementation Plan for moving to T+3

Detailing how the transition from T+5 to T+3 is going to be managed

Making changes immediately, where possible, as opposed to waiting for implementation (this has already started)

Development of systems changes for T+3 for implementation after the JSE’s System Replacement Programme goes live

The Impact Analysis and Implementation Plan were completed in April 2010

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Phase 4

Phase 4 is about -

Focus on automation Project Management Systems Development Management of Timelines Changes to Listing Requirements Changes to JSE, NSX and Strate Rules and

Directives Marketing and Education Making sure everyone is ready to go-live Go-live

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New Settlement Cycles

Type Settlement Cycle

Reporting Time

Commit/BTB Time

BTB RM Removal

Reverse Subs

SAT/SLB BP Reporting

Commit for SA/SLB BP

JSE On-market

T+3 15h00 (S-1) 15h15 (S-1) 16h00 (S-1) 17h00 (S-1) 18h00 (S-1)

JSE Same Day (SLB)

T+0 10h00 (S) 11h00 (S)

JSE Same Day (MLB)

T+0 10h00 (S) 11h00 (S)

JSE Rolling of Settle

T+0 11h00 (S) 12h00 (S)

JSE Roll of Settle new legs

Min T+2 11h00 (S-2)

15h00 (S-1) 15h15 (S-1) 16h00 (S-1) 17h00 (S-1) 18h00 (S-1)

JSE Give-Up

T+0 11h00 (S) 12h00 (S)

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New Settlement Cycles cont.

Type Settlement Cycle

Reporting Time

Commit/BTB Time

BTB RM Removal

Reverse Subs

SAT/SLB BP Reporting

Commit for SA/SLB BP

Depository Receipts

Min T+1 11h00 (S-1)

15h00 (S-1)

Off-markets T+3 11h00 (S-1)

15h00 (S-1)

Acct Transfers

Min T+0 18h00 (S) 18h00 (S)

Portfolio Moves

Min T+0 18h00 (S) 18h00 (S)

SLB Min T+1 13h00 (S-1)

14h00 (S-1)

SLB Returns

Min T+1 17h00 (S-1)

18h00 (S-1)

Acct Trfrs/ Portfolio Moves RD

Min T+0 09h00 (S) 10h00 (S)

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T+3 On-Market Settlement Cycle

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On-market Activities (current vs future)

Action Current Timings – T+5 Future Timings – T+3

Settlement Orders (non-controlled clients)

T - Batch T – Real-time (after allocations)

Client Affirmation to CSDP/Rejection to Broker

T+2 (12h00) T+1 (18h00)

Deemed Affirmation Client T+2 (12h00) T+1 (18h00)

Broker re-allocation T+2 (16h00) T+1 (18h00)

Client affirmation of re-allocation T+2 (16h00) T+1 (18h00)

Brokers nets T+2 (EOD) T+1 (EOD)

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On-market Activities (current vs future)

Action Current Timings – T+5 Future Timings – T+3

Non-controlled client breach T+3 (12h00) T+2 (12h00)

Principal Assumption T+4 (10h00) T+2 (16h00)

Margining T+3 (EOD) T+1 (EOD)

Broker borrowing on Principal Assumption

T+4 (10h00 to 12h00) T+2 (16h00 to 18h00)

Settlement Authority SLB T+4 (12h00 to 16h00) T+3 (08h00 to 10h00)

Failed Trade/Rolling Of Settlement T+4 (16h00 to 18h00) T+3 (10h00 to 12h00)

Settlement T+5 T+3

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Corporate Actions Mandatory Events

Declaration Date

RD – 13or earlier

Finalisation Date

RD - 8

Last Day to Trade

LDT

RD - 3

First Day to Trade with New

Entitlement

LDT + 1

RD - 2

Record Date

LDT + 3

RD

Payment Date

RD +1

1 Day 1 Day

LDT + 2

Matched ready for Settlement for same dayreturns

10h00

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Mandatory Event Information

The minimum required information on Declaration Date forMandatory Events must be: Last Day to Trade (Cum), Ex Date, Record Date and Expected

Pay Date Cash Rates and Share Ratios can be announced no later than

Finalisation Date by 12h00 Exceptions to this will be dealt with on a case by case basis If applicable (Mandatory Security or Mandatory Cash and

Security): Delisting Date/Termination Date, Suspension Date,

Effective Date New ISIN

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Mandatory Event Information cont.

The Market has agreed on the following: Should not all information have been made available on

Declaration Date then the cut off date for the Event Finalisation should be no later than 12h00 on Finalisation Date

Exceptions to this will be dealt with on a case by case basis Record Date will always be a Friday. In the event of a Public

Holiday, Record Date will be the previous business day.

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Elective Events – Excluding DRIPs

Declaration Date

RD – 13or earlier

Finalisation Date

RD - 8

Last Day to Trade

LDT

RD - 3

First Day to Trade with New

Entitlement

LDT + 1

RD - 2

Record Date&

Election Deadline Date

LDT + 3

Payment Date

Withdrawal Date (if applicable)

RD + 1

1 Day

LDT + 2

14h00

1 Day

Strate to send Pre-Advice

Security Entitlements Posted B.O.D

Cash Entitlements paid on receipt of Cash

10h00 Broker submits elections to CSD Participants

13h00 Elections submitted to Strate (Projected Holdings if settlement has not taken place)

10h00 Matched ready for Settlement for same dayreturns

12h00 Event Eligibility Calculated (where settlement has taken place)

Amended elections may be submitted

15h00 Strate to send elections to TS

[

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Elective Event Information

The minimum required information on Declaration Date forElective Events must be: Last Day to Trade (Cum), Ex Date, Record Date, Expected

Election Deadline Date and Expected Pay Date Cash Rates and Share Ratios can be announced no later than

Finalisation Date by 12h00 Exceptions to this will be dealt with on a case by case basis Default Option and whether Part Elections and/or Restrictions

are applicable Elections will be sent to Strate at 13h00 with amendments until

14h00

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Elective Events - DRIPs

Declaration Date

RD – 13or earlier

Finalisation Date

RD – 8

Announcement of SA Dividend

Rate

Last Day to Trade

LDT

RD - 3

LDT + 1

RD - 2

Record Date + 10

Election Deadline Date

Cash Payment Date

RD + 20

LDT + 2

13h00Security Entitlements processed by Transfer Secretary B.O.D

Cash Entitlements paid on receipt of Cash

10h00 Broker submits elections to CSD Participant

Elections submitted to Strate

Record Date

LDT +3

Send Record DatePositions

E.O.D

Securities and Fractions

Payment Date

RD + 40

RD + 39

Share Ratio advised by Transfer Secretary

10h00 Matched ready for Settlement for same dayreturns

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Elective Event – DRIPs Information

The minimum required information on Declaration Date forDRIPs must be: Last Day to Trade (Cum), Ex Date, Record Date, Expected

Election Deadline Date and Expected Pay Date SA Rate Conversion Rate

SA Rate Conversion Rate announced no later than 12h00 Finalisation date

Dividend Rate in foreign currency and whether Part Elections are applicable

Restrictions All announcements on Finalisation Date will be made by 12h00

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Fractions

It has been agreed by the market that for all companies listed locally, the rounding convention utilised will be to round down all entitlements. Fractional payments will be paid in cash, with a tolerance level to be decided on at a later stage

Spreadsheets will still be required for IPO’s and surplus rights

For Foreign and Dual Listed Companies – their rounding conventions will apply

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High-level Timelines

Communication 3rd Quarter 2010 to 4th Quarter 2012

Internal Development 3rd Quarter 2010 to 2nd Quarter 2011

Internal System Testing 2nd Quarter 2011 to 3rd Quarter 2011

External System Testing 3rd Quarter 2011 to 2nd Quarter 2012

User Acceptance Testing 2nd Quarter 2012 to 4th Quarter 2012

Go-live 4th Quarter 2012

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Dependencies

JSE’s System Replacement Programme (SRP) – if pushed out will push out T+3

Regulatory or legislative changes

Market changes – SRG, etc

SRG 2012 – decision has to be made in April/May 2012 go or no-go for T+3

Corporate Actions – decision has to be made in April/May 2012 go or no-go for T+3

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Contact Details

Brett KotzeGeneral Manager: Clearing & Settlement JSE Limited One Exchange Square, 2 Gwen Lane Sandown, South Africa Tel: +27 11 520 7587Fax: +27 11 520 8580Email: [email protected]: www.jse.co.za

mailto:[email protected]

http://www.jse.co.za/

jse equities - moving to t+3

Documents

action itemsthe jse

londoncopyright jse

implementation plan

potential barriers

licence renewal10 barriers

action areasthe fsb

settlement cycletimelinesphase

livethe impact analysis