IMPACT OF FAILURE OF A CENTRAL SECURITIES DEPOSITORY PARTICIPANT ON FINALITY AND IRREVOCABILITY OF SETTLEMENT OF SECURITIES

Abstract

In view of the current global meltdown and the recession in South Africa, the question arises whether the legal framework pertaining to finality of settlement of securities is sufficiently robust to cope with failure of a central securities participant. This article examines this question and highlights some of the problems that exist with regard to uncompleted contracts in the Strate (Share Transactions Totally Electronic) environment. The authors conclude with certain recommendations to overcome the identified problems.