Entitlement Compensation Rules - South Africa

16.06.2011

Bonds

Market compensation basis:Settlement Date
Automatic Compensation Managed by Local CSD:No
Restriction on custody events/transaction types:No restriction
Service offered by CBL:Adjustment is performed based on information received from the depository.

Equities

Market compensation basis:Settlement Date
Automatic Compensation Managed by Local CSD:Yes
Restriction on custody events/transaction types:Compensation applicable to off-market trades only
Additional information:
1.Entitlement compensation rules will only be applicable on off-market trades as the on-market trades have contractual settlement. If off-market trades are rolled, then the below procedure will be applicable (see 2.).
2.Any trades identified as having possible claims are validated by CBL’s depository. Trades passing this validation are automatically put onto a claims database and claimed from the counterparty. The claiming process should not take longer than five business days.

Note: The depository can only identify those trades that are booked after the Record Date and have a Trade Date before Last Day to Trade. These compensation requests will be facilitated by the depository only upon request from the customer.
3.For trades that are rolling over a corporate event Record Date, CBL’s depository will:
a.Roll the trade for commit on T+4 17:00 (unless CBL’s customer and his counterparty agree otherwise) and;
b.Input a new trade to STRATE for the entitlement to be transferred free of payment from the seller to the buyer. (This because the entitlement will be paid to the seller according to settled position on the Record Date, which in this case is T+5, or the original intended Settlement Date).
4.In the case of a cash entitlement, cash will be transferred to the buyer’s account simultaneously with the actual, final settlement of the trade.

It is expected that STRATE will be issuing a document that will confirm the UST implication of compensation.
Service offered by CBL:Adjustment is performed based on information received from the depository.