Recommendation 1 Recommendation 2 Recommendation 3 Recommendation 4

Recommendation 5 Recommendation 6 Recommendation 7 Recommendation 8

Market selection

Recommendation 7

Investor compliance with the laws and regulations in the home countries of their investments should be part of their regulators' due diligence process. They, in turn, should be treated equitably in the home country of their investments especially in respect to their rights to shareholder benefits and concessionary arrangements under double tax agreements.

1.	Do domestic regulators monitor the procedures in place at their locally based cross-border custodians to assure compliance with the laws and regulations of the home countries of their investments?	STRATE is a Self-Regulating Organisation (SRO) with the FSB (Financial Services Board) acting as its lead regulator. The FSB was established by Statute and acts as regulator for all non-banking financial services activities. Any institution is entitled to become a CSDP at STRATE, provided it: complies with the entry criteria as set out in the rules of STRATE is approved by the FSB as a depository institution in terms of the legislation is regulated by either the FSB or the Register of Banks There are currently no cross-border custodians operating in South Africa. STRATE is subject to periodic examination by the regulatory authorities and independent accountants. STRATE and the regulatory authorities hold regular meetings together. The regulatory authority has various remedies available for breach of applicable statute or other requirements, namely fines, suspension of depository activities, and termination of depository activities. In terms of the Custody and Administration of Securities Act, 1992, certain powers have been delegated to the Controlling Body of STRATE which regulates the activities of STRATE as a self-regulatory organisation. The Controlling Body of STRATE enforces compliance with the conditions of participation in terms of the CSD Rules.
2.	What are the areas (e.g. benefits, investor compensation) where foreign investors are not treated in the same way as local investors?	None. Securities of foreign investors held by the CSDPs in STRATE are held under the same conditions as those that apply to local investors.
3.	Can sales proceeds and income be repatriated without any restrictions?	Yes. South African Exchange Control Regulations apply only to local South African residents. There are no restrictions on the transferability of capital or income flows belonging to non-residents. In addition, there are no withholding taxes on interest or dividends and Capital Gains Tax (CGT) does not apply to equity, bond or Warrant investments of foreign investors.
4.	Are double tax agreements simple to apply, and do foreign investors receive promptly their full entitlement to dividends and interest payments?	Banks appointed by STRATE accept cash deposits and South Africa's Central Bank processes the cash clearing. Corporate action entitlements are credited to the securities account upon actual receipt. The process for income and dividend collection is credited to the cash account upon actual receipt. Dividend and interest payments are processed electronically on "pay date". As stated above, there are presently no withholding taxes which negates the need for double tax agreements relating to these accruals. Also, as claims have been removed from the process, there is no doubt that the investor will receive full value on due date enabling prompt remittance abroad.