Client Assets (Part I)

Question 1

Define “client assets”

Answer 1

JSE authorised investments safeguarded by a member on behalf of clients.

Question 2

Define “controlled client account”

Answer 2

An account reflecting the equity securities and funds of a controlled client.

Question 3

Define “controlled client”

Answer 3

A client or an account holder on whose behalf a client is acting, whose funds and uncertificated equity securities are under the control of a CSP or whose settlements take place via the CSDP of a member.

Question 4

Define “controlled client custody account”

Answer 4

An equity securities account with a CSDP in the name of the member’s nominee company which reflects the uncertificated equity securities balances of the member’s controlled clients and through which settlement of transactions in equity securities for such controlled clients is effected.

Question 5

Define “custody services”

Answer 5

The services provided by a custody services provider on behalf of its clients or another member and that member’s clients, in relation to the exercising of control over uncertificated equity securities and funds intended for the purchase of equity securities, held by a member on behalf of controlled clients.

Question 6

Define “custody services provider”

Answer 6

A member which has been authorised by the JSE to perform custody services in terms of the rules.

Question 7

Define “JSE authorised investments”

Answer 7

1. equity securities;
2. JSE listed securities traded on the JSE derivatives trading system or the Yield-X trading system;
3. securities listed on an exchange in the republic other than the JSE;
4. securities listed on an external exchange;
5. participatory interests in a collective investment scheme as defined in the Collective Investment Schemes Control Act, 2002 (Act No.45 of 2002), and units or any other form of participation in a foreign collective investment scheme approved by the Registrar of Collective Investment Schemes in terms of section 65 of that Act;
6. units or any other form of participation in a collective investment scheme licensed or registered in a foreign country; and
7. funds intended for the purchase of such securities, units or participation.

Question 8

Define “safeguarding”

Answer 8

Safeguarding means the activities performed by an authorised user –
(a) for the purposes of holding securities or funds in custody on behalf of another person; or
(b) where the authorised user is accountable to another person for a third party’s holding of securities or funds in custody on behalf of that other person, and includes the administration of matter incidental to those securities or funds