Conduct of Business (Part II)

Question 1

Define “money broking transactions”

Answer 1

Funds accepted by a member from a client and invested by the member in the money market with one or more banks, in terms of the rules, and subject to any conditions published by the Registrar of Banks.

Question 2

Define “unsolicited call”

Answer 2

Any first communication made to a person by a member or an employee of a member, without an express or tacit invitation from such person.

Question 3

What are the general standards of integrity which members are required to observe in their dealings with clients and the JSE?

Answer 3

A member must :
1. not knowingly circulate information which is false or misleading;
2. not knowingly countenance any attempt to manipulate the market, nor to influence persons for such apurpose;
3. conduct its activities in a manner that is compatible with the objects of the Act and with full respect for the reputation of the JSE; and
4. not participate in any dealings with other members, clients, the media or other persons which may be of such a nature as to defame the JSE or any of its officers or employees

Question 4

What are the general standards of conduct which a member is required to observe in its dealings with a client?

Answer 4

1. Act honestly and fairly.
2. Act with due skill, care and diligence, and in the interests of clients.
3. Exercise independent professional judgement.
4. Act promptly on and in accordance with the instructions of a client, and exercise any discretion in a responsible manner. AND
5. Avoid conflicts of interest and when they cannot be avoided, ensure fair treatment to clients by disclosure, confidentiality or declining to act. A member must not unfairly place its interests above those of its clients.

Question 5

What are the general standards regarding disclosure of information to clients?

Answer 5

1. The information must be :
   a. factually correct;
   b. provided in plain language, avoid uncertainty or confusion and not be misleading;
   c. adequate and appropriate, in the circumstances.
2. Amounts, sums, values, fees must be stated in specific monetary terms or if not pre-determinable, the basis of calculation must be adequately described.
3. The information need not be repeated to the same client unless any material or significant changes occur.
4. Full and accurate information about fees and charges must be disclosed.
5. Confidential information must not be disclosed.
6. Restrictions or limitations that may affect access to their assets must be disclosed.

Question 6

What client records must be retained by a member?

Answer 6

1. All communications relating to a service rendered to a client, including instructions given by the client to the member.
2. All transaction documentation relating to clients.
3. All contractual arrangements between the member and its clients, including mandates prescribed by the rules.
4. All client particulars required to be provided in terms of the rules or which are necessary for the effective operation of client accounts.

Question 7

For what period must the client records prescribed by the rules be retained?

Answer 7

1. All instructions given by clients to execute transactions must be kept for at least six months after the date of the transaction.
2. All other client records prescribed by the rules must be kept for at least five years after the rendering of the services.

Question 8

Can a member request or induce a client to waive any right or benefit conferred on a client in terms of the rules or accept any such waiver from a client?

Answer 8

No, and any such waiver is void.