Although ordinarily a marketable securities tax (MST) is payable on the purchase of marketable securities executed through the agency of or from a member of the JSE, MST is not payable by a purchaser who is not ordinarily resident in South Africa, Lesotho, Namibia or Swaziland (a foreign purchaser). If, however, a foreign purchaser registers transfer of securities, stamp duty is payable unless a specific stamp duty exemption is applicable to the transaction.

Stamp duty on the registration of transfer is payable at the rate of 5c per R10,00 or part thereof, of the consideration for the purchase of the marketable securities provided that registration is completed within six months of the execution of the relevant transfer instrument. If the purchase consideration is less than the market value of such securities, the market value will apply for the purposes of determining the stamp duty payable. Delayed registration incurs three times the usual duty. The Stamp Duties Act, 1968, provides for a number of exemptions from stamp duty, including in respect of arbitrage transactions as defined in that Act.

The aim of the JSE rules is to enhance trading transparency and prices are well-publicised at all stages of a deal. Trades are reported to the Equities Clearing House (ECH) for clearing and settlement purposes.

A weekly computerised clearing system is operated for settlement between members and an entire week's trading is recorded without actual settlement taking place. At the end of each week the net balance on each security owed to or by each member is determined between the members via the ECH. The year is divided into 52 weekly settlement or account periods commencing on a Tuesday and ending on a Friday.

Trading executed in one week is normally settled in the following week. If settlement is not completed the uncompleted portion is carried forward into the new account.

Members' net outstanding balances due for settlement within each account are prepared each Friday night, and marked-to-market values are then settled with the ECH on the following Monday before deliveries.

Planning for the inclusion of non-members of the JSE as participants in ECH has commenced.

Comprehensive rules provide for the buying-in of shares in the event of failed deliveries.

The payment of stamp duty on scrip lending transactions upon registration into the name of the lender has been abolished provided the shares are returned within six months of the initial loan.

The JSE is working with the banking industry towards the implementation of a Central Depository and those G30 standards (primarily rolling settlement and scrip lending to eliminate failed deliveries) which are not currently met.


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Johannesburg Stock Exchange * Public Relations Department
17 Diagonal Street * Johannesburg 2001 * Telephone 27 11 377 2200
P O Box 1174 * Johannesburg 2000 * Telefax 27 11 834 7402