The merger of Strate, the Universal Exchange Corporation (Unexcor) and the Central Depository has been signed, creating a single electronic settlement house for the country.
The Financial Services Board has also approved the merger, following the Competition Commission's nod earlier this month.
The merged entity, which will retain the name of Strate and be responsible for electronic settlement of equities, bonds and money market instruments, will come into existence on Friday.
Monica Singer, who has been appointed CEO of the merged company, says the deal makes Strate by far the biggest central securities depository in Africa and one of the largest in the southern hemisphere.
It will, in terms of current trading volumes, facilitate the settlement of about R38 billion worth of securities for bonds and equities alone. Coupled with money market instruments, this figure will increase substantially further, she says.
Unexcor and Central Depository's shareholders - Absa, FirstRand Nedbank and Standard Bank, which are also shareholders in Strate - will be compensated by receiving additional Strate shares.
This will increase their stakes in Strate and see the JSE, which has until now been a 50% shareholder, dilute its holding to 41%.
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