It has been eight years in the coming but at last – on 11
July 2016 – South Africa moved to a shorter settlement cycle
for equities, from five to three days.
This brings South Africa on a par with most international stock
exchanges, providing increased liquidity and making the JSE more
attractive generally. The main benefit for local fund managers is
that they will instantly become more internationally
From an administrator's perspective, the shorter T+3 trade
lifecycle has meant more time pressures and the need for even
greater precision to support clients in the transition. The project
has also led to proactive engagement on Maitland's part with
all our stakeholders in order to get an optimal result in terms of
straight-through-processing (STP) and this has been beneficial for
From an administrator's perspective, we have created the
environment for fund managers to abide by the rules so that
settlement can be guaranteed. We have:
Created more transparency throughout
the trade lifecycle
Ensured more real time trade matching
and automation to ensure we can meet the shorter lifecylce
Achieved overall general improvement
of STP – from initiation to completion.
In fact, Maitland has been T+3 ready since 2007 already, on
account of the high international trade activity that we
administrate. What is more, looking ahead and in order to mitigate
the risk of failed trades, our STP platform has been built for
Cooperation with the JSE
As the largest fund administrator in the South African market,
Maitland has worked closely with the JSE over the past few years on
many of the T+3 processes.
To minimise the risk of failed trades, the JSE has constructed a
groundbreaking automated trade fail process. Instead of requiring
participants to operate on margin, the JSE will create a secondary
market in scrip lending so that the trade can be rolled over to T+6
and not fail. Therefore the risk will be managed by the JSE
The JSE has been on a strong education drive ahead of T+3
implementation as behavioural change and efficient operations by
all parties are vital to the process. We encourage ongoing
behavioural change, so that the mindset fits the new system.
Go South Africa, go!
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