No. To receive voting rights related to JSE-listed securities you must actually own the securities in your own name, which is not the case for a CFD.

The notional value of a CFD is calculated by multiplying the price of the underlying security or reference instrument determined by Nedbank Capital by the number of securities specified in the contract. One CFD is the economic equivalent of one share.

Unlike many other derivative products, CFD's have no fixed expiry date and can remain open for as long or as short a period as required, or until the position is reversed by the investor or Nedbank Capital under the CFD Terms and Conditions.

When opening a CFD position a deposit of cash margin is required rather than payment for the full value of the underlying position. The amount of margin required is based on the position and the individual reference instrument volatility. The amount of margin will vary considerably on a day-to-day basis and the individual reference instrument margin requirement may be altered at Nedbank Capital’s discretion.

In addition to holding sufficient funds in your account to meet any premium payments and recovery of costs, you are required to make margin available in respect of each order to open a new CFD position, as well as your existing CFD positions. Such margin represents security held by Nedbank Capital for your orders and CFD positions.

You will be notified of the required collateral amount for each order and you should ensure that you have sufficient funds in your margin account to cover that amount.

A list of available reference instruments and current collateral rates is set out in the CFD trading platform, NedTrade.

Mark-to-market payments are payments to be made by you to Nedbank Capital or to you by Nedbank Capital, in accordance with any movements in the reference instrument. Mark-to-market payments reflect the profit or loss with respect to the CFD, which would be realised if the CFD were closed out immediately.

If the reference instrument increases in value while the CFD is open, the short party must pay the amount of the corresponding increase in the CFD value to the long party. Conversely, if the reference instrument decreases in value while the CFD is open, the long party must pay the amount of the corresponding decrease in the CFD value to the short party.

While mark-to-market payments are made only at the end of each business day, CFD values are in fact recalculated continuously. Accordingly, you should ensure that sufficient funds are available to cover such payments at all times.

You will be notified of any margin breaches using your contact details; however, it is the responsibility of the investor to ensure his or her margin account has sufficient cleared funds at all times to meet margin requirements and mark-to-market payments and Nedbank Capital may act prior to your receipt of any notice. Margin requirements and mark-to-market payments are calculated continuously. If there are insufficient funds in your margin account to meet your margin requirements or mark-to-market payments, your CFD positions may be closed out; your CFD orders may be cancelled; you may be required to pay default interest on the cash shortfall; and your margin account may be closed.

In general, if you transfer funds using internet banking where your account is not a Nedbank account prior to 15:00 on a business day, the transferred funds should clear on the same day. Any other settlement mechanisms into your margin account are likely to result in a delay in the clearing of those funds for approximately 1 to 2 business days.

Margin rates applicable to CFD's and orders in respect of each underlying security are set by Nedbank in its sole discretion and published on the NedTrade Trading Platform. The margin rate assigned to a CFD depends largely on the volatility and liquidity of the underlying reference instrument. The current margin rates applicable to standard long and short CFD positions range between 8% and 100%.

CFD's are a leveraged product requiring a deposit of cash margin rather than the full value of the underlying position. Effectively, cash is being borrowed by the long counterparty and lent by the short counterparty. As a result, if an investor holds a long CFD position overnight, the investor will be charged, as part of the overall CFD premium, an amount based on the mark-to-market value of the reference instrument of that open position. Conversely, if an investor holds a short CFD position overnight, that investor will be credited with an amount based on the mark-to-market value of the reference instrument. This charge/credit is calculated and paid each business day.

All dividend payments in relation to CFD's occur on the date the reference instrument goes ex dividend, ie the ex dividend date.

If you hold a long position in a CFD at the close of business on the day prior to the ex dividend date of the underlying reference instrument, you will receive an amount equal to the cash dividend on that security. This is not a dividend in tax law, but compensation for a dividend. Thus, the receipt is taxable and no STC benefit is attached to this payment.

If you hold a short position in a CFD at the close of business on the day prior to the ex dividend date, you must pay an amount equal to the cash dividend to Nedbank.
Nedbank Capital can adjust the amount of the manufactured dividend paid to take account of any significant time value-of-money adjustments.

To receive dividends and STC credits you must be the beneficial holder of the securities – which is not the case with CFD's. The amount paid as a dividend in respect of a long CFD position represents a manufactured dividend equal in amount to the cash dividend paid by the issuer of the underlying reference instrument, without any STC credits and not exempt from tax.

Where the underlying security is affected by a corporate action, amendments are likely to be required to any CFD's or orders that refer to that security. Nedbank Capital will in its sole discretion determine such appropriate adjustment, if any, as Nedbank considers necessary to preserve the economic equivalence of the rights and obligations of the parties immediately prior to the event. Examples of corporate actions include capitalisation issues, rights issues, share buybacks, takeovers, and cash returns of capital.

CFD's are currently offered on all Top 40 securities quoted on the JSE. This list is subject to change. Additional reference instruments can be added subject to liquidity of the share and demand by clients. A list of underlying securities in respect of which a short CFD position can be entered into can be obtained from the CFD trading platform, NedTrade.

Not all securities are available for investors to enter into short CFD positions, although most large-capitalisation JSE-listed securities are available. This list of available securities is dependent on the ability of Nedbank Capital to borrow the security at any point in time and is thus subject to change. A list of underlying securities in respect of which a short CFD position can be entered into can be obtained from the CFD trading platform, NedTrade.

All applicants must read and sign the CFD Terms and Conditions, complete a hard-copy application form and comply with FICA requirements.

Applications to open a margin account are subject to approval by Nedbank. Once an account has been approved, Nedbank will email the client the link to enable NedTrade to be downloaded by the client.

Once you have received an email providing you with the link to NedTrade, an account number, a user ID and a password, you will be able to transfer funds into your margin account. Contact Nedbank Capital CFD Division for banking details.

The minimum initial deposit amount required to open an account is R20 000.

Funds that are in the client’s margin account (whether blocked or not) will earn interest at the rand overnight deposit rate less a maximum of 0,5% (50 basis points).

This is the weighted average of the overnight call deposit rate paid by A1-rated local and F1-rated foreign financial institutions where Safex places its daily margin deposits received by its members. Reuters code SFXROD and Bloomberg code RAONON Index.

• A charge on entry and exit of CFD's, with a maximum of 0,40% calculated on entry and exit values.
• A charge is calculated daily on the exposure the long CFD provides to the investor in relation to the underlying reference instrument. The charge will be based on the SAFEY rate plus 2%. The exposure is calculated using the closing market price of the reference instrument. SAFEY is a floating rate and its historical levels can be obtained from the CFD website.
• A credit is earned daily on the exposure the short CFD provides to the investor in relation to the underlying reference instrument. The credit will be based on the SAFEY rate minus 3%. The exposure is calculated using the closing market price of the reference instrument.
• Holders of long CFD positions receive the benefit of an amount equal to the cash dividends paid to holders of the underlying securities. Conversely, holders of short CFD positions must pay an amount equal to the value of any cash dividend paid to holders of the underlying securities.
• Penalty interest will be charged on the SAFEY rate plus 5% when premium payment commitments are not met.

CFD's are highly leveraged and carry a high level of risk. CFD's offer exposure to an underlying security with a relatively small cash outlay for the margin. This can have the effect of magnifying potential gains or losses. Investors should note that losses can exceed the amount of margin laid out. Investors may be involuntary closed out due to a variety of reasons including insufficient funds to meet a margin call or where Nedbank Capital is unable to borrow underlying securities required to hedge its exposure to an investor’s short position.

CFD's are traded online via Nedbank’s CFD platform, NedTrade that can be downloaded from the website once your margin account has been set up.

Yes. However, investors should note that CFD orders placed outside JSE market hours are unlikely to be accepted by Nedbank Capital until normal trading commences, or Nedbank Capital is otherwise able to purchase or sell the corresponding reference instrument on the JSE, and will remain queued until that time.

Standard market hours for NedTrade is 09:15 to 16:45 on business days.

All orders placed are subject to acceptance by Nedbank Capital at its sole discretion.

You can specify how long you would like your order to remain in the market, assuming the order is not already accepted by Nedbank. Orders placed on the JSE in relation to a reference instrument that will trade on an ex-dividend basis on the following business day will not be cancelled. It is the investor’s responsibility to manage his orders, which Nedbank Capital has not accepted yet. Nedbank may also cancel your order where your CFD account does not contain the collateral required for the order.