The first warrant to hit the market for electronic settlement makes its debut today.
Central securities depository and electronic settlement company Strate announced last month that trades in all new warrant issues would be settled electronically.
Trades in the Anglo American warrant, issued by SCMB, will be settled electronically from today until the warrant matures, in the same way that trades in JSE-listed counters in the Strate environment are being settled.
Brett Duncan, head of sales and marketing of warrants at SCMB, says SCMB has achieved another first for warrants. "SCMB was, after all, the first South African bank to issue warrants, the first with an index warrant and the first with a put warrant."
The new Anglo warrant will replace the popular existing SCMB Anglo put warrant that expires in December.
On Monday Soci'et'e G'en'erale will issue another 10 warrants in various shares, including Billiton and Harmony. These will all be settled electronically.
According to Strate, existing warrants will continue to be settled manually.
No certificates will be issued for Strate-eligible warrants, as they will be purely electronic instruments.
Strate CEO Monica Singer says the move is a milestone for her company, since it marks its first venture into the settlement of a security other than a JSE-listed equity.
"Our ultimate aim is to settle all financial instruments," she adds.
According to Strate's dematerialisation schedule, every JSE-listed equity will have entered the electronic settlement environment by the start of next year.
At that stage no counter will be able to be traded without having been dematerialised.
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