SATRIX COLLECTIVE INVESTMENT SCHEME - Satrix SA Bond Portfolio To Change From A Reinvesting Portfolio To A Distributing Portfolio - STXGOV

Satrix SA Bond Portfolio To Change From A Reinvesting Portfolio To A Distributing Portfolio - STXGOV

SATRIX COLLECTIVE INVESTMENT SCHEME
SATRIX SA BOND PORTFOLIO
JSE Code: STXGOV
ISIN: ZAE0000285862
("Satrix Bond")

A portfolio in the Satrix Collective Investment Scheme, registered as
such in terms of the Collective Investment Schemes Control Act, 45 of
2002

SATRIX SA BOND PORTFOLIO TO CHANGE FROM A REINVESTING PORTFOLIO TO A
DISTRIBUTING PORTFOLIO

  1. Introduction

     Satrix SA Bond Portfolio unitholders (“Unitholders”) are referred to
     the FSCA Conduct Standard 1 of 2020 (CIS) (“Conduct Standard”) issued
     by the Financial Sector Conduct Authority (“FSCA”) on 19 May 2020.

     The Conduct Standard is applicable to portfolios comprising collective
     investment schemes registered in terms of the Collective Investment
     Schemes Control Act, 2002 (Act No. 45 of 2002) (“CISCA”).

     The Conduct Standard is intended to set minimum requirements for net
     asset valuation calculation and pricing for collective investment
     scheme portfolios registered in terms of CISCA and are therefore
     applicable to the STXGOV Portfolio.

     In terms of the Conduct Standard, and as further set out below, the
     STXGOV Portfolio distribution method which currently allows for the
     re-investing of all coupons received, will now be adjusted to one in
     which all coupons received are paid out in cash to Unitholders.


  2. Background on the STXGOV

     The STXGOV Portfolio tracks the S&P South Africa Sovereign Bond 1+
     year Index (the “Index”), an index designed to track the performance
     of South African Rand-denominated securities publicly issued by the
     South African government for the domestic market.

     Coupons and interest from the underlying bonds are reinvested monthly.
     The STXGOV Portfolio declares a notional (deemed) distribution to
     unitholders bi-annually. The value of this bi-annual deemed
     distribution equates to the cumulative value of coupons earned and
     reinvested in the preceding six month period by the STXGOV portfolio,
     into constituents securities of the Index. Such coupons and interest
     in respect of the distribution does not incur dividends tax as it is
     not considered a dividend however unitholders will be liable for income
     tax at their marginal rate of tax on the coupons and interest declared
     and deemed to have been received.

     The STXGOV Portfolio is considered to be a reinvesting portfolio as
     all income, which as stated above primarily consists of coupons and
     interest, is declared to Unitholders on declaration date and then is
     reinvested by Satrix on behalf of Unitholders into constituent
     securities of the Index in the exact proportions as per the Index.
3. Rationale for the change in distribution methodology


     The Thirteenth Supplement to the Offering Circular and Pre-listing
     Statement Methodology issued in terms of the STXGOV Portfolio on 2
     April 2020 stipulates the re-investment of distributions declared in
     terms of the STXGOV Portfolio.

     As such, the Thirteenth Supplement Methodology is therefore not in
     compliance with paragraph 10.1 (“Conduct Standard Distribution
     Methodology”) which reads as follows:

     “All income received and accrued by a portfolio or class after
     deducting permissible costs must be distributed to investors so that
     it is taxed in the hands of the investor and that the nature of the
     income is preserved in the process.”

     The Conduct Standard Distribution Methodology therefore gives rise to
     distributions, which must be distributed to investors and not re-
     invested.

     Hence, as a result of the Conduct Standard Distribution Methodology,
     distributions declared by the STXGOV Portfolio shall be distributed in
     cash to Unitholders on a quarterly basis and not reinvested in the
     Portfolio.


4. Effective date of the Conduct Standard

     The Conduct Standard took effect from 19 November 2020, meaning all
     distributions declared on or after this effective date, shall be
     governed in terms of the Conduct Standard.

     The first such distribution to be declared by the STXGOV Portfolio to
     be governed by the Conduct Standard shall be the distribution for the
     quarter ending 30 June 2022. The salient dates of which are as follows:

     Declaration date Tuesday, 26 July 2022
     Last day to trade Tuesday,2 August 2022
     Ex date Wednesday,3 August 2022
     Record date Friday,5 August 2022
     Payment date Monday,8 August 2022


5. Financial effect on Unitholders

     The change from the Thirteenth Supplement Distribution Methodology to
     the Conduct Standard Distribution Methodology will have no financial
     effect on Unitholders. Unitholders will realise the same economic
     outcome and subject to the same tax principles.


6.   Application of JSE Listings Requirement and amendment of the
     Thirteenth Supplement

     Paragraph 19.20(a) of the Listings Requirements of JSE Limited reads
     as follows:

     “An issuer is required to comply with the following         continuing
     obligations once its securities have been listed:
      (a) in the event that the issuer makes any changes to the placing
      document or pricing supplement that affect the terms and conditions of
      the securities or the guarantee, other than changes which are of a
      formal, minor or technical nature or are made to correct a manifest
      error or to comply with mandatory provisions of the law, the applicant
      issuer must obtain approval from holders of securities, holding not
      less than 66.67% of the value of a specific class of securities;”

      Hence as the change in distribution methodology is necessitated by the
      Conduct Standard which is considered to be a change to comply with
      mandatory provisions of the law, no approval from Unitholders is
      required to implement the STXGOV Portfolio distribution method.

      The Thirteenth Supplement will be amended in due course to reflect the
      change in distribution methodology as set out in the Conduct Standard.



25 July 2022

JSE Sponsor
Vunani 

Date: 25-07-2022 05:15:00
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