Strate, ex­change con­trols and but­ton press­ing

Finweek English Edition - - Letters - MON­ICA SINGER

I RE­FER TO the in­ter­view – Dual list­ing, dou­ble safe – car­ried in your 15 Fe­bru­ary edi­tion and wish to cor­rect an in­cor­rect ex­change con­trol im­pres­sion that might have been con­veyed to your read­ers.

While ex­change con­trol in South Africa has been mean­ing­fully re­laxed in the past few years, it re­mains on the statute books with the ex­press stip­u­la­tion that no more than R2m worth of cap­i­tal may be re­moved from the coun­try by an in­di­vid­ual with­out the ex­press per­mis­sion of the SA Re­serve Bank. Your story was clear on this point.

I sus­pect, though, that your read­ers may have been mis­led by my in­di­ca­tion that Strate, as the elec­tronic cus­to­dian of all JSElisted shares, need do no more than press a but­ton in or­der to trans­fer a dual-listed share from the JSE reg­is­ter to the Lon­don reg­is­ter. The im­pli­ca­tion is that a South African in­vestor could thereby trans­fer lim­it­less sums of money abroad.

Quite clearly, this would be a gross breach of ex­change con­trol reg­u­la­tions. How­ever – and I be­lieve that I made it ob­vi­ous dur­ing the course of my in­ter­view – such an ac­tion is tech­no­log­i­cally pos­si­ble but would, of course, be to­tally in con­tra­ven­tion of the ex­change con­trol rules.

Strate, as a cus­to­dian of shares and a reg­u­la­tor of set­tle­ment in the bond and eq­uity mar­kets, is keenly aware of its re­spon­si­bil­i­ties and its du­ties to abide by all the laws of the land. We would not on any ac­count coun­te­nance any breach of any law, or reg­u­la­tion – least of all an ex­change con­trol reg­u­la­tion. The dual list­ing ex­am­ple was solely hy­po­thet­i­cal, in­tended as it was to il­lus­trate one of sev­eral ad­van­tages of elec­tronic set­tle­ment and cus­to­di­an­ship.

Mon­ica Singer

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