For years, the South African securities lending industry has
been lobbying for an exemption from securities transfer tax
("STT") for the outright transfer of
listed equity securities as collateral. On 8 January 2016, the
Taxation Laws Amendment Act 25 of 2015 was promulgated, which
includes the long-awaited introduction to the Securities Transfer
Tax Act 25 of 2007 (the "STT Act") of
such an exemption. This is very good news for the South African
securities lending market and others, but parties will need to
clear a few hurdles before availing themselves of the
exemption.
Market participants will likely be familiar with the existing
STT exemption for securities lending arrangements. The definition
of a "lending arrangement" in the STT Act has always
required, amongst other things, that lent securities be returned to
the lender within 12 months of transfer; that lent securities be
on-delivered by the borrower within 10 business days; and that the
lender be
