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Consolidation of Participatory Interests in the Stanlib Top 40 fund and the Stanlib Swix 40 fund - STAN40/STANSX
STANLIB ETF Collective Investment Scheme registered in the Republic of South Africa in terms of
Collective Investment Schemes Control Act, 45 of 2002
STANLIB TOP 40 FUND
Share Code: STAN40
Abbreviated Name: STANLIB40
ISIN: ZAE000148425
("STANLIB40"”)
STANLIB SWIX 40 FUND
Share Code: STANSX
Abbreviated Name: STANLIBSX
ISIN: ZAE000148607
("STANLIBSX")
CONSOLIDATION OF PARTICIPATORY INTERESTS IN THE STANLIB TOP 40 FUND AND THE
STANLIB SWIX 40 FUND
1. Introduction
Holders of STANLIB40 and STANLIBSX participatory interests (“Securities”) are advised that the JSE
Limited (“JSE”) has approved an application by the manager of the STANLIB ETF Collective
Investment Scheme (“the Manager” or “STANLIB”) to proceed with a consolidation of Securities in
STANLIB40 and STANLIBSX (“the Consolidations”).
In terms of the Consolidations, the Manager will reduce the number of Securities that an investor
holds and accordingly increase the value of each Security. The portfolio value of each investor will
therefore remain unchanged.
2. Effective date
The effective date of the Consolidations is 9 September 2013.
3. Rationale for the Consolidations
The introduction of Dividend Withholding Tax (“DWT”) on investors has introduced a complication in
the management of STANLIB’S index tracking portfolios. Simply put, the Index Ground Rules oblige
the Manager to re-invest special dividends, gross of any taxes that may be applicable, in order to
track the index. While this was practically possible prior to the introduction of the DWT, the fund must
now distribute special dividends to investors to allow for the payment of DWT to the South African
Revenue Service (“SARS”).
For this reason the Manager deems it prudent that the Fund distribute the special dividends to
investors so that the relevant Central Securities Depository Participant can extract the DWT from the
distribution and pay it to SARS on the investor’s behalf. The balance is then distributed to investors in
cash.
4. Implication of distributing special dividends
The re-investment of special dividends to purchase securities effectively ‘capitalises’ them and
ensures that they form a part of the securities’ net asset value (“NAV”) permanently. However, if the
special dividends are considered to be income in the fund and not reinvested, these amounts form a
part of the NAV only until the end of the quarter when they are distributed with all other income in the
fund.
Most Exchange Traded Funds are structured so that their price reflects the value of the underlying
index i.e. if the Top 40 index is trading at 35 000 points, the STANLIB40 Securities will trade at
approximately R35.00. However, should the special dividends be distributed, the value of the
Securities will drop by the equivalent amount and the NAV of the participatory interest will therefore
‘under-represent’ the index i.e. if the special dividend is R0.10, the value of the Security will drop to
R34.90 when it is distributed and the investor will receive R0.10 less DWT in cash. The Security’s
value will therefore be at a discount to the index it represents as the Fund is no longer able to hold
baskets that accurately represent the index basket constituents. This means that the value of the
Fund will no longer represent the Top 40 futures that trade of SAFEX, which makes market making
more difficult to perform and is confusing to the market.
The Consolidations will therefore bring the NAV of each unit in line with the underlying index that it
represents.
5. Details of the Consolidations
STANLIB40 and STANLIBSX currently have 12,372,208 and 297,875,790 Securities in issue,
respectively. It is anticipated that the Consolidations will be performed on a 0.99591:1 basis for
STANLIB40 and 0.99694:1 basis for STANLIBSX and as such, the number of Securities issued
pursuant to the Consolidations will be reduced to 12,321,606 and 296,964,290 respectively.
6. Salient dates pertaining to the Consolidations
2013
Last date to trade in respect of the Consolidations Friday, 6 September
Consolidated Securities begin trading under the new ISINs
ZAE000182432 for STANLIB40 and ZAE000182424 for STANLIBSX with
effect from commencement of business Monday, 9 September
Record date in respect of the Consolidations Friday, 13 September
Accounts of dematerialised holders will have their Consolidated Securities Monday, 16 September
updated
In addition to JSE’s approval, the Manager has also received approval from the Financial Services Board
for the Consolidations.
Johannesburg
23 August 2013
Sponsor
The Standard Bank of South Africa Limited
Date: 23/08/2013 11:56:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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