Indemnity to company on issue of new share certificate and Endorsement of share transfer declaration from a nominee
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Indemnity to company on issue of new share certificate and Endorsement of share transfer declaration from a nominee
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Document indemnifying the company from any loss or damage as a result of loss of certificate and a certification of transfer of shares from one nominee to another.
A nominee company refers to any entity that holds assets in its own name on behalf of the beneficial owner (the nominee company is not the beneficial owner of these assets). To be approved as a Nominee company, an application has to be submitted to the registrar which provides comprehensive information about the company and only on approval can the company act as a nominee.
Compliance Required
• Nominee companies, who want to register or hold any assets of long-term insurers, short-term insurers or pension funds, need prior written approval of the Registrar of Long-term Insurance, the Registrar of Short-term Insurance or the Registrar of Pension Funds, as the case may be.
• Nominee companies, who want to hold clients’ securities in the Share Transactions Totally Electronic (STRATE) environment, by appearing in a sub-register maintained by a Central Securities Depository Participant (CSDP), must comply with the criteria determined by the registrar.
• These requirements are not applicable to foreign nominee companies.
• The registrar concerned shall for the purpose of this Notice, be in the case of long- term insurers, the Registrar of Long-term Insurance; in the case of short-term insurers, the Registrar of Short-term Insurance; in the case of pension funds, the Registrar of Pension Funds and in the case of STRATE, the Registrar referred to in the Custody and Administration of Securities Act, 85 of 1992.
Authority
The authority of the registrar concerned to approve nominee companies, is derived from the following legislation:
• in the case of long-term insurers, section 34(1)(b) of the Long-term Insurance Act, 1998;
• in the case of short-term insurers, section 33(1)(b) of the Short- term Insurance Act, 1998; and
• in the case of pension funds, section 5(3) of the Pension Funds Act, 1956.
Principles Which Underlie The Maintenance Of Registers Of Ownership
• In terms of section 91A of the Companies Act, 1973 only a central securities depository, such as STRATE Ltd, may maintain a register of ownership of uncertificated listed securities and only CSDPs may maintain a sub-register of such ownership.
• In terms of the rules of STRATE a nominee company may not appear in a sub-register maintained by a CSDP unless the nominee company complies with the criteria determined by the registrar.
• The nominee register (sub-sub register) is the sole record of beneficial ownership by persons reflected in the nominee register as a share certificate is no longer prima facia evidence of ownership in a STRATE approved listed security in terms of section 91A of the Companies Act, 1973.
• The responsibilities of, and risks associated with operating a nominee register in this new electronic environment are therefore greater than before. Its accuracy, timeous updating, security from error or manipulation and the necessity to have real time disaster discovery are essential for anyone operating a nominee register.
• All the necessary controls and procedures therefore need to be in place before anyone could apply in terms of these requirements and applicants would need to comply with the capital adequacy requirements as laid down by the registrar from time to time.
Application Procedure
An application for approval of a nominee company shall be lodged with the Financial Services Board (“FSB”), PO Box 35655, Menlo Park, Pretoria, 0102. The nominee company must clearly indicate whether it will participate in the STRATE environment. If the nominee company will hold assets on behalf of more than one of the afore- mentioned institutions, only one application needs to be lodged, although separate approvals in terms of the applicable legislation will be granted by the registrar(s) concerned should the application be successful.
No application for approval of a nominee company need be lodged with the FSB, if the nominee company participates in the STRATE environment but will not hold assets on behalf of a pension fund, a long- term insurer or a short-term insurer and is a subsidiary of a member of the JSE Securities Exchange South Africa (JSE) or a CSDP of STRATE, as they will be approved by the JSE and STRATE, respectively.
Before an application is lodged, an audit certificate should be obtained.
Requirements for Nominee Companies
For the purposes of this document, a nominee company refers to any entity that holds assets in its own name on behalf of the beneficial owner (i.e. the nominee company is not the beneficial owner of these assets).
A nominee company must -
• be a registered company under the Companies Act, 1973: and
• be wholly owned by a holding company; and
• have adequate insurance against loss through fire, theft and the like in place for trust assets held by the nominee company as well as fidelity guarantee cover; and
• conclude a written agreement with each pension fund, short-term insurer and long-term insurer whose assets it will hold and the agreement should comply with the minimum requirements as required by the registrar concerned.
Continuing Obligations of Nominee Companies
The approved nominee company shall submit annually: (a) its audited financial statements; and
(b) an audit report setting forth whether any assets held on behalf of any other person in safe custody, are in possession of the nominee and properly accounted for, within six months of the financial year-end of the company to the FSB. Should the nominee company fail to submit the above and also not apply before the expiry of that period in writing for an extension of time within which to submit the statements, the FSB may withdraw its approval with immediate effect on the conditions as prescribed by the registrar concerned.
A declaration by the holding company of the nominee company must accompany the annual financial statements of the nominee company. The FSB will retain the right to withdraw an approval at any time should the nominee company, its holding company or the company to which the control over the nominee register has been outsourced fail to comply with the FSB’s requirements.
Members of the JSE, CSDP’s and their nominee companies need only to comply with the requirements listed above if they hold scrip on behalf of either pension funds or long and short-term insurers.
Document indemnifying the company from any loss or damage as a result of loss of certificate and a certification of transfer of shares from one nominee to another.
A nominee company refers to any entity that holds assets in its own name on behalf of the beneficial owner (the nominee company is not the beneficial owner of these assets). To be approved as a Nominee company, an application has to be submitted to the registrar which provides comprehensive information about the company and only on approval can the company act as a nominee.
Compliance Required
• Nominee companies, who want to register or hold any assets of long-term insurers, short-term insurers or pension funds, need prior written approval of the Registrar of Long-term Insurance, the Registrar of Short-term Insurance or the Registrar of Pension Funds, as the case may be.
• Nominee companies, who want to hold clients’ securities in the Share Transactions Totally Electronic (STRATE) environment, by appearing in a sub-register maintained by a Central Securities Depository Participant (CSDP), must comply with the criteria determined by the registrar.
• These requirements are not applicable to foreign nominee companies.
• The registrar concerned shall for the purpose of this Notice, be in the case of long- term insurers, the Registrar of Long-term Insurance; in the case of short-term insurers, the Registrar of Short-term Insurance; in the case of pension funds, the Registrar of Pension Funds and in the case of STRATE, the Registrar referred to in the Custody and Administration of Securities Act, 85 of 1992.
Authority
The authority of the registrar concerned to approve nominee companies, is derived from the following legislation:
• in the case of long-term insurers, section 34(1)(b) of the Long-term Insurance Act, 1998;
• in the case of short-term insurers, section 33(1)(b) of the Short- term Insurance Act, 1998; and
• in the case of pension funds, section 5(3) of the Pension Funds Act, 1956.
Principles Which Underlie The Maintenance Of Registers Of Ownership
• In terms of section 91A of the Companies Act, 1973 only a central securities depository, such as STRATE Ltd, may maintain a register of ownership of uncertificated listed securities and only CSDPs may maintain a sub-register of such ownership.
• In terms of the rules of STRATE a nominee company may not appear in a sub-register maintained by a CSDP unless the nominee company complies with the criteria determined by the registrar.
• The nominee register (sub-sub register) is the sole record of beneficial ownership by persons reflected in the nominee register as a share certificate is no longer prima facia evidence of ownership in a STRATE approved listed security in terms of section 91A of the Companies Act, 1973.
• The responsibilities of, and risks associated with operating a nominee register in this new electronic environment are therefore greater than before. Its accuracy, timeous updating, security from error or manipulation and the necessity to have real time disaster discovery are essential for anyone operating a nominee register.
• All the necessary controls and procedures therefore need to be in place before anyone could apply in terms of these requirements and applicants would need to comply with the capital adequacy requirements as laid down by the registrar from time to time.
Application Procedure
An application for approval of a nominee company shall be lodged with the Financial Services Board (“FSB”), PO Box 35655, Menlo Park, Pretoria, 0102. The nominee company must clearly indicate whether it will participate in the STRATE environment. If the nominee company will hold assets on behalf of more than one of the afore- mentioned institutions, only one application needs to be lodged, although separate approvals in terms of the applicable legislation will be granted by the registrar(s) concerned should the application be successful.
No application for approval of a nominee company need be lodged with the FSB, if the nominee company participates in the STRATE environment but will not hold assets on behalf of a pension fund, a long- term insurer or a short-term insurer and is a subsidiary of a member of the JSE Securities Exchange South Africa (JSE) or a CSDP of STRATE, as they will be approved by the JSE and STRATE, respectively.
Before an application is lodged, an audit certificate should be obtained.
Requirements for Nominee Companies
For the purposes of this document, a nominee company refers to any entity that holds assets in its own name on behalf of the beneficial owner (i.e. the nominee company is not the beneficial owner of these assets).
A nominee company must -
• be a registered company under the Companies Act, 1973: and
• be wholly owned by a holding company; and
• have adequate insurance against loss through fire, theft and the like in place for trust assets held by the nominee company as well as fidelity guarantee cover; and
• conclude a written agreement with each pension fund, short-term insurer and long-term insurer whose assets it will hold and the agreement should comply with the minimum requirements as required by the registrar concerned.
Continuing Obligations of Nominee Companies
The approved nominee company shall submit annually: (a) its audited financial statements; and
(b) an audit report setting forth whether any assets held on behalf of any other person in safe custody, are in possession of the nominee and properly accounted for, within six months of the financial year-end of the company to the FSB. Should the nominee company fail to submit the above and also not apply before the expiry of that period in writing for an extension of time within which to submit the statements, the FSB may withdraw its approval with immediate effect on the conditions as prescribed by the registrar concerned.
A declaration by the holding company of the nominee company must accompany the annual financial statements of the nominee company. The FSB will retain the right to withdraw an approval at any time should the nominee company, its holding company or the company to which the control over the nominee register has been outsourced fail to comply with the FSB’s requirements.
Members of the JSE, CSDP’s and their nominee companies need only to comply with the requirements listed above if they hold scrip on behalf of either pension funds or long and short-term insurers.
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