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Ballot Voting Procedure In Respect Of Proposed Amendments To Investment Policy And Name Of STXQUA Portfolio
Satrix Managers (RF) Pty Ltd
Satrix Quality South Africa Portfolio
Share code: STXQUA
ISIN: ZAE000247987
BALLOT VOTING PROCEDURE IN RESPECT OF PROPOSED AMENDMENTS TO
INVESTMENT POLICY AND NAME OF SATRIX QUALITY SOUTH AFRICA PORTFOLIO
A portfolio in the Satrix Collective Investment Scheme, registered as such
in terms of the Collective Investment Schemes Control Act, 45 of 2002
This letter is important and requires your immediate attention.
The purpose of this letter is to inform you of the proposed changes to the
Index of the Satrix Quality South Africa Portfolio, and to provide you with
sufficient information in order to vote on this proposal.
This ballot amending the definition of the Index is conducted at the request
of Satrix Managers RF (Pty) Ltd (Satrix) (FSP no 15658).
Reason for ballot
The reason for the ballot is that Satrix wants to change the Index of the
above-mentioned portfolio by replacing the S&P Quality South Africa Index,
with the Satrix Quality Index.
After much consideration, we have concluded that it would be beneficial to
investors to change the index from the S&P Quality South Africa Index to the
Satrix Quality Index.
The reasons for the change are as follows:
1. The proprietary Satrix Quality Index follows a similar approach to the
Satrix Momentum and Satrix Value indices and is consistent with how
Satrix captures Quality. It is constructed using an optimiser to take
account of stock, sector, liquidity and tracking error risks, and
places a limit on turnover/churn at each rebalance.
2. The proprietary Satrix Quality Index does not make use of low leverage
characteristics as a measure of quality, for capturing excess returns
in the South African market.
3. The proprietary Satrix Quality Index controls for turnover in its semi-
annual rebalances, which contributes to lower transaction costs (around
20% p.a.) and total investment charges.
4. The proprietary Satrix Quality Index treats corporate events as per
the FTSE/JSE index treatment, which reduces the risk of tracking errors
relative to the price of the index it is tracking.
The name of the portfolio will also change from:
Satrix Quality South Africa Portfolio
to
Satrix Quality South Africa ETF
The name change announcement will be released after the ballot process has
been passed.
Note, the JSE code and ISIN will remain unchanged and STXQUA will retain
it’s trading and financial history.
The table below lists the current investment policy, as well as the proposed
changes to the new investment policy which have been underlined for easy
reference.
Current investment policy New investment policy Impact on Investor
3.1 The investment policy 3.1 The investment policy There is no negative
of the Portfolio shall be to of the Portfolio shall be to impact on the investors
track the S&P Quality South track the Satrix Quality within the Satrix
Africa Index (hereinafter Index (hereinafter referred Quality Index as a result
referred to as “the Index”) to as “the Index”) as of the implementation of
as closely as possible, by: closely as possible, by: the proposed change in
investment policy.
Buying only constituent Buying only constituent
securities in the same securities in the same
weightings in which they are weightings in which they are
included in the Index and included in the Index and
selling only securities selling only securities
which are excluded from the which are excluded from the
Index from time to time as a Index from time to time as a
result of periodic Index result of periodic Index
reviews or corporate actions reviews or corporate actions
or which are required to be or which are required to be
sold to ensure that the sold to ensure that the
Portfolio holds securities Portfolio holds securities
in the same weighting as in the same weighting as
they are included in the they are included in the
Index. Index.
3.2 The Portfolio shall 3.2 The Portfolio shall
not buy or sell securities not buy or sell securities
for the purpose of making a for the purpose of making a
profit nor for any purpose profit nor for any purpose
other than tracking the other than tracking the
Index. Index.
3.3 It is anticipated that 3.3 It is anticipated that
assets in liquid form will assets in liquid form will
not form a substantial part not form a substantial part
of the Portfolio’s assets. of the Portfolio’s assets.
However, any liquid assets However, any liquid assets
that the Portfolio holds may that the Portfolio holds may
be invested in short term be invested in short term
investments such as banker’s investments such as banker’s
acceptances and certificates acceptances and certificates
of deposit. of deposit.
3.4 As a further 3.4 As a further
objective, the securities objective, the securities
held by the portfolio shall held by the portfolio shall
be managed to generate be managed to generate
income for the benefit of income for the benefit of
investors. investors.
3.5 Investors can obtain 3.5 Investors can obtain
participatory interests in participatory interests in
the Portfolio on the the Portfolio on the
secondary market or by secondary market or by
Current investment policy New investment policy Impact on Investor
subscribing for new subscribing for new
participatory interest in participatory interest in
the Portfolio on the primary the Portfolio on the primary
market. In order to achieve market. In order to achieve
this objective the Manager this objective the Manager
may, subject to the Act and may, subject to the Act and
the Deed, create and issue the Deed, create and issue
an unlimited number of an unlimited number of
participatory interests in participatory interests in
the Portfolio. the Portfolio.
3.6 The Portfolio will not 3.6 The Portfolio will not
be managed according to be managed according to
traditional methods of traditional methods of
active management, which active management, which
involve the buying and involve the buying and
selling of securities based selling of securities based
on the economic, financial on the economic, financial
and market analysis and and market analysis and
investing judgement. investing judgement.
Instead, the investment Instead, the investment
objective and style will be objective and style will be
full replication of the full replication of the
Index. As a result, the Index. As a result, the
financial or other condition financial or other condition
of any company or entity of any company or entity
included from time to time included from time to time
in the Index will not result in the Index will not result
in the elimination of its in the elimination of its
securities from the securities from the
Portfolio unless the Portfolio unless the
securities of such company securities of such company
or entity are removed from or entity are removed from
the Index itself. the Index itself.
3.7 The Portfolio will 3.7 The Portfolio will
acquire and hold a portfolio acquire and hold a portfolio
of securities that of securities that
substantially represents all substantially represents all
of the component securities of the component securities
of the Index in of the Index in
substantially the same substantially the same
weighting as in the Index. weighting as in the Index.
However, the Portfolio shall However, the Portfolio shall
also be entitled, in its also be entitled, in its
discretion and only on a discretion and only on a
temporary basis, to employ temporary basis, to employ
such other investment such other investment
techniques and instruments techniques and instruments
as will most effectively as will most effectively
give effect to the object or give effect to the object or
the investment policies of the investment policies of
the Portfolio. the Portfolio.
3.8 The composition of the 3.8 The composition of the
Portfolio will be adjusted Portfolio will be adjusted
periodically to confirm to periodically to confirm to
changes in the composition changes in the composition
and weighting of the and weighting of the
securities in the Index so securities in the Index so
Current investment policy New investment policy Impact on Investor
as to ensure that the as to ensure that the
composition and weighting of composition and weighting of
the Portfolio are a the Portfolio are a
reflection of the reflection of the
composition and weighting of composition and weighting of
the securities contained in the securities contained in
the Index. the Index.
3.9 The Portfolio will 3.9 The Portfolio will
hold securities purely for hold securities purely for
the economic rights and the economic rights and
benefits attaching thereto, benefits attaching thereto,
and accordingly if a and accordingly if a
takeover bid is made for takeover bid is made for
shares of a company included shares of a company included
in the Index, the Portfolio in the Index, the Portfolio
will not tender shares in will not tender shares in
respect thereof. Securities respect thereof. Securities
held by the Portfolio which held by the Portfolio which
are subject to a takeover are subject to a takeover
bid will only be surrendered bid will only be surrendered
if such surrender is if such surrender is
mandatory (and then only to mandatory (and then only to
the extent of such mandatory the extent of such mandatory
surrender) in terms of surrender) in terms of
applicable law or under the applicable law or under the
rules of a regulatory rules of a regulatory
authority or body having authority or body having
jurisdiction. If a takeover jurisdiction. If a takeover
bid results in a company no bid results in a company no
longer qualifying for the longer qualifying for the
inclusion in the Index, any inclusion in the Index, any
shares of the company held shares of the company held
by the Portfolio after the by the Portfolio after the
takeover bid will be takeover bid will be
disposed of by the disposed of by the
Portfolio, and the proceeds Portfolio, and the proceeds
will be applied in effecting will be applied in effecting
the appropriate adjustments the appropriate adjustments
to the Portfolio. to the Portfolio.
3.10 The Portfolio’s 3.10 The Portfolio’s
ability to replicate the ability to replicate the
price and yield performance price and yield performance
of the Index will be of the Index will be
affected by the costs and affected by the costs and
expenses incurred by the expenses incurred by the
Portfolio Portfolio.
Current fund benchmark New fund benchmark Impact on Investor
S&P Quality South Africa Satrix Quality Index There is no negative
Index impact on the investors
Action required
1. Please read this announcement on the proposed change to the portfolio,
your rights as an investor and the impact this will have on your
investment.
2. A Ballot Form enclosed, is available to all investors, brokers and CSDPs
for completion of the ballot vote.
3. The various Brokers/CSDPs will then submit the ballot responses via email
to our external auditors, KPMG, at satrixballotSTXQUA@kpmg.co.za on or
before 26 October 2023. Alternatively, the Ballot Form may be emailed
directly to KPMG at satrixballotSTXQUA@kpmg.co.za by 26 October 2023.
4. Please do not include any other instructions regarding your holdings with
your ballot form, e.g. requests for purchases, switching instructions,
etc. Your ballot form will go directly to our auditors and, should such
instructions be sent to the auditors, we cannot guarantee that any
instruction subsequent to the commencement of the ballot process will be
effected.
5. If you are no longer invested in this portfolio, no action is required.
Approval and Commencements
In-principle approval for amendment to the index was granted by the JSE on
06 September 2023.
Subject to the ballot voting procedure being successful and approval by the
Financial Sector Conduct Authority (“the Authority”) of Collective
Investment Schemes, the investment policy amendment will be with effective
from commencement of business on 01 December 2023.
Timelines for the implementation of the amendments on Satrix Quality SA
Portfolio ballot:
Date ACTION
Friday, 11 September 2023 Record date / Investor extract date
Wednesday, 13 September
2023 Declaration SENS announcement of proposed amendments
Last day of investors/their JSE brokers/CSDPs to
respond to the Auditors indicating their election in
Thursday, 26 October 2023 respect of the proposed amendments.
Friday, 03 November 2023 Submission of auditor’s report to FSCA
Thursday, 09 November 2023 FSCA approve audit report
FSCA approve supplemental deed (10 business days
Friday, 17 November 2023 prior to implementation)
Finalisation announcement of results of the ballot
Monday, 20 November 2023 publication on SENS
Friday, 01 December 2023 Effective date of change
The impact on you as investor
The proposed change to this fund will change the investors’ exposure from
securities included in the S&P Quality South Africa Index to securities
included in the Satrix Quality Index.
Effective date of change
The effective date of the proposed changes in the investment policy of the
portfolio will be 01 December 2023, provided that the necessary consent is
obtained from investors and the Financial Sector Conduct Authority
(“FSCA”).
Charges, performance and pricing
Investors will not be liable for the payment of any additional fees,
charges, taxes or brokerage as a result of the change in investment policy.
Special distribution
No special distributions will be effected nor applicable.
Your rights as an investor
The rights of investors are firmly entrenched in the Act. In terms of
section 98 of CISCA and Clause 59 of the Deed, of the Satrix Collective
Investment Scheme in Securities, the Registrar of Collective Investment
Schemes requires that:
• All investors are notified in writing of any proposed material
changes to the collective investment schemes and portfolios in which
they hold units.
• All investors are balloted in order for them to vote on the proposed
changes.
Please note that, in terms of the Act, the Registrar will not consent to
the changes to the portfolio unless satisfied that the changes will not be
detrimental to the interests of any investor.
At least 25% in value of investors, excluding the manager must respond in
writing of which the majority must agree to the amendment.
In addition, you have the following alternatives available:
• Should you not want to remain invested in the Satrix Quality South
Africa Portfolio, you may switch to any other Satrix Portfolio. If you
opt to switch, please email your instructions to your broker or online
platform. For SatrixNOW clients you can email helpme@satrixNOW.co.za
or simply go online and process your switch. Please note that switching
may trigger a CGT event and that you may be liable for CGT at your next
income tax assessment as well as brokerage on the sell and buy leg of
the transaction.
• In the event of a successful ballot, should you not be comfortable with
the proposed change in investment policy, and do not wish to switch your
investments to any other Satrix Portfolio, you may elect to sell your
units at any time and withdraw your funds at the prevailing market price
of the ETF before 01 December 2023. Please note that this this
transaction may trigger a CGT event and that you may be liable for CGT
at your next income tax assessment as well as brokerage cost.
If you choose not to switch or sell your funds prior to the effective date
of the change of investment structure as set out in this letter (if
approved by investors), the amended investment policy will automatically
apply to your investment.
Should you require further information on the proposed change or should you
wish to exercise your right to switch or sell any of your investments,
please contact Satrix Managers on 0860 111401, or You can also send an
email to info@satrix.co.za.
13 September 2023
JSE Sponsor
Vunani Sponsors
Date: 13-09-2023 04:57:00
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