JSE Equities - Moving to T+3

Transcription

1 JSE Equities - Moving to T+3 11 June 2012 Copyright JSE Limited

2 Moving to T+3 Agenda Phases so far Outputs per Phase T+3 Settlement Cycle Timelines Phase 4 2

3 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 2 Nomination 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 3 Impact analysis and agreeing an implementation plan for T+3 with all market participants 3

4 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 4

5 Phase 1 Barriers and Action Areas Off-market transactions 9 Central securities register Providing 0 settlement assurance 5 Real-time trade processing 2 Moving shares between registers 4 Systems availability 1 Corporate actions 18 Dematerialization 4 Straight-through processing 6 Securities lending & borrowing 11 5

6 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 6

7 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) 7

8 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

9 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 9

10 New Settlement Cycles Type JSE Onmarket JSE Same Day (SLB) JSE Same Day (MLB) JSE Rolling of Settle JSE Roll of Settle new legs JSE Give- Up Settlement Cycle Reporting Time Commit/BTB Time BTB RM Removal Reverse Subs SAT/SLB BP Reporting Commit for SA/SLB BP T+3 15h00 (S-1) 15h15 (S-1) 16h00 (S-1) 17h00 (S-1) 18h00 (S-1) T+0 10h00 (S) 11h00 (S) T+0 10h00 (S) 11h00 (S) T+0 11h00 (S) 12h00 (S) Min T+2 11h00 (S- 2) T+0 11h00 (S) 12h00 (S) 15h00 (S-1) 15h15 (S-1) 16h00 (S-1) 17h00 (S-1) 18h00 (S-1) 10

11 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 Portfolio Moves Min T+0 18h00 (S) 18h00 (S) 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) 11

12 T+3 On-Market Settlement Cycle 12

13 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) 13

14 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 14

15 Corporate Actions Mandatory Events 1 Day 1 Day Declaration Date RD 13 or earlier Finalisation Date RD - 8 Last Day to Trade LDT RD - 3 First Day to Trade with New Entitlement LDT + 1 RD - 2 LDT h00 Matched ready for Settlement for same day returns Record Date LDT + 3 RD Payment Date RD +1 15

16 Mandatory Event Information The minimum required information on Declaration Date for Mandatory 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 16

17 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. 17

18 Elective Events Excluding DRIPs 1 Day 1 Day [ 15h00 14h00 13h00 12h00 10h00 10h00 Strate to send elections to TS Strate to send Pre-Advice Amended elections may be submitted Elections submitted to Strate (Projected Holdings if settlement has not taken place) Event Eligibility Calculated (where settlement has taken place) Broker submits elections to CSD Participants Matched ready for Settlement for same day returns B.O.D Cash Entitlements paid on receipt of Cash Security Entitlements Posted Declaration Date RD 13 or earlier Finalisation Date RD - 8 Last Day to Trade LDT RD - 3 First Day to Trade with New Entitlement LDT + 1 RD - 2 LDT + 2 Record Date & Election Deadline Date LDT + 3 Payment Date Withdrawal Date (if applicable) RD

19 Elective Event Information The minimum required information on Declaration Date for Elective 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 19

20 Elective Events - DRIPs E.O.D Send Record Date Positions Declaration Date RD 13 or earlier Finalisation Date RD 8 Announcement of SA Dividend Rate Last Day to Trade LDT RD - 3 LDT + 1 RD - 2 LDT + 2 Record Date LDT +3 13h00 10h00 10h00 Record Date + 10 Election Deadline Date Elections submitted to Strate Broker submits elections to CSD Participant Matched ready for Settlement for same day returns Cash Entitlements paid on receipt of Cash Cash Payment Date RD + 20 Share Ratio advised by Transfer Secretary RD + 39 Security Entitlements processed by Transfer B.O.D Secretary Securities and Fractions Payment Date RD

21 Elective Event DRIPs Information The minimum required information on Declaration Date for DRIPs 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 21

22 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 22

23 Total ETC Total Contract Notes Percentage Linear (Percentage) Trade Confirmations ETC Comparisons 250, % 200, , % 60.00% 50.00% 40.00% 100, % 50, % 10.00% 0.00% 23

24 Commit Statistics Average Monthly Commits Non-controlled Clients % 90.00% 80.00% 70.00% Percentage 60.00% 50.00% 40.00% 30.00% 20.00% 10.00% 0.00% Jan-05 Mar-05 May-05 Jul-05 Sep-05 Nov-05 Jan-06 Mar-06 May-06 Jul-06 Sep-06 Nov-06 Jan-07 Mar-07 May-07 Jul-07 Sep-07 Nov-07 Jan-08 Mar-08 May-08 Jul-08 Sep-08 Nov-08 Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09 Jan-10 Mar-10 May-10 Jul-10 Sep-10 Nov-10 Jan-11 Mar-11 May-11 Jul-11 Sep-11 Nov-11 Jan-12 Mar-12 May-12 Date Percentage committed EOD T+1 Percentage committed EOD T+2 Percentage EOD T+3 24

25 Contact Details Brett Kotze or Chris Grove