Technical & Standards Department
A new level of reporting functionality is required in today’s financial services market. Spurred on by the desire for enhanced transparency, new reporting methods must deliver the correct information on time, to the right person and in the right format. In its interpretation of the Financial Markets Act (FMA) and POPI Bill, STRATE in 2013 discontinued the provision of JSE listed company shareholder information. However transparency triumphed and the disclosure of this information was brought back in line with international standards of disclosure.
Alex D’Aloisio, director at TimBukOne, an investment research software and data company says the information provided by data vendors is used by market participants to make informed investment decisions: “This is exactly why it was important to argue for the right to disclosure of share register information. It provides vital information to the financial market at large.”
He says that internationally there has always been a movement towards more transparency and access to shareholder information, for example, “you can quite easily track what shares Warren Buffett or Carl Ichan are buying or selling. But by withholding the shareholding information the South African markets were at risk of becoming less transparent and investor friendly and thus bucking an international trend.”
D’Aloisio says that if the decision were not reversed South Africa would be going back to a less investor friendly environment. “Together with other industry bodies we argued that by withholding shareholding disclosure it would be difficult, if not impossible, for current and potential investors to analyse who the shareholders of a company are. Many of our clients, and especially foreign investment companies, rely on the data to invest on the JSE and put together mergers and acquisitions deals.”
It also allows analysts to search for, amongst other aspects, significant purchases or sales of shares, to benchmark portfolios against peer groups, and to see who owns what, creating a level playing field for all market participants.
“With over 25 years of experience in investment data research, we felt duly qualified to weigh in on the industry debate.” TimBukOne provides shareholder relevant data within a few hours of STRATE releasing the data to the market. D’Aloisio says this is largely due to their industry expertise and the systems the company has developed: “We are always ahead of the curve and successfully process data into meaningful formats for our clients within a matter of hours. In the investment world timing is everything and the quicker you can access information the swifter you can analyse it and the faster you can make a decision. This timeous access to information makes all the difference to our clients.”
He says that the data helps clients perform benchmarking exercises, industry comparatives, and peer group analysis. It also enables them to search for potential trends in shareholder behaviour and analyse investor holdings such as foreign and fund ownership; private ownership; black economic empowerment, and various other research that help the industry as a whole.
According to D’Aloisio we live in an ever-changing world and he anticipates more changes within the sector: “Hopefully it will be for the better such as the continuous improvement of transparency and the timeous provision and access to information.”