How to become a South African Reserve Bank shareholder

The South African Reserve Bank (SARB) has over 800 shareholders. While there are no requirements to become a shareholder, it is not as simple as buying shares on the JSE.

The SARB is one of only nine central banks worldwide with private shareholders. It is the oldest central bank in Africa and the fourth-oldest central bank outside Europe. 

Since its establishment, the SARB has had private shareholders. It was delisted from the JSE on 2 May 2002, and a live trading facility for its shares was introduced on 1 October 2005.

This trading facility operates through an over-the-counter share transfer facility (OTCSTF) market coordinated within the Reserve Bank. As such, it is not an online facility but operates through postal, facsimile, hand-delivered or email communication only.

Only the shareholders who reside in South Africa are entitled to vote at the AGM, and they are allowed one vote for every 200 shares held. 

The SARB Act stipulates that no shareholder shall hold, or hold in aggregate with their associates, more than 10,000 of the 2,000,000 issued shares.

However, two shareholders own more than the 10,000 maximum – the SA Mutual Life Assurance Society with 20,000 shares and the SA Police Widows’ and Orphans’ Fund with 10,520 shares. 

After allowing for specific provisions, payment of company tax on profits transfers to reserves and dividend payments to shareholders, the Reserve Bank’s surplus earnings are paid to the South African government. 

The SARB Act stipulates that shareholders are entitled to a 10 cents per share dividend annually paid from the accumulated reserves. In the 2023 financial year, this amounted to a total payout of R200,000.

Efficient Group chief economist Dawie Roodt recently said he owns shares in the SARB. Daily Investor reached out to Roodt to find out how he became a shareholder and how others may buy shares. 

Roodt said he bought his 200 shares when the SARB was still listed on the JSE and that buying the shares was the same as buying shares in a public company. 

However, after the SARB’s delisting in 2002, you must go through the OTCSTF process to buy shares.

Roodt explained that as part of this process, you must ask the SARB secretary if any shares are available or if any shareholders are prepared to sell them. 

While there are no shareholder requirements, Roodt said finding somebody willing to sell their shares is difficult. 

Over the last six months, only 14,223 shares in the SARB have been traded, according to the bank’s share price and availability report. 

“It is not a good investment to be a shareholder in the Reserve Bank,” Roodt said. For his 200 shares, he received only R8 in total dividends in the last financial year. 

The benefit of being a shareholder is access to financial data and information gathered by the SARB, which is released at its Annual General Meeting, most of which becomes publicly available. 

Private shareholders do not influence the SARB’s monetary policy. “There is nothing special about it,” said Roodt. 

Shareholders’ rights are limited to considering the SARB’s annual financial statements, electing seven of the non-executive directors of the Board of Directors, appointing external auditors and approving their remuneration.

The President selects the SARB’s governor, deputy governors, and its other seven directors.