Conduct of Business (Part V) Flashcards
Is a member permitted to open a client account with a name other than that of a person with legal status?
No. Accounts may not be opened with fictitious names or names that do not represent a person with legal status, commonly referred to as trading account names.
Unless the client is a bank or a financial services provider or the foreign regulated equivalent of such entities, what information must be obtained in respect of the persons responsible for placing instruction on a client account if the person placing the instructions is not the individual in whose name the account is held or the account is not in the name of an individual?
- Full name.
- Identity number.
- Physical and postal addresses.
- Telephone number.
Other than obtaining the information referred to in rules 8.60.2 to 8.60.4, what are the other requirements regarding the prescribed information to be obtained from clients?
- All of the information must be confirmed by the client in writing and the member must maintain a record of such confirmation. Any changes to the said information shall be advised by the client in writing as soon as practicable.
- As a minimum, the identity of the client must be authenticated by the member and the member must maintain a record of the means of such authentication.
What must a member do before effecting a transaction with a person whom the member reasonably believes requires authorisation as a discretionary service provider?
Take reasonable steps to ascertain that such person has the required authorisation.
A member is required, at all times, to adhere to the best execution principle when acting for a client in the purchase or sale of equity securities. What is a member required to do to adhere to this principle?
- Take reasonable care to obtain the result which is the best available for the client, subject to the terms and conditions of the agreed mandate with the client.
- All transactions must be conducted through the central order book of the JSE equities trading system unless the execution of an off-book trade is in the best interests of the client.
What is a member required to do before acting as a principal with a client?
Obtain the client’s prior consent.
What are the requirements as to how a member determines the value or rate of commission to be charged to a client on an agency transaction?
The commission must be mutually agreed with the client in advance of the transaction.
Is a member permitted to charge a fee in respect of a transaction executed as principal with a client?
Yes, provided it has been mutually agreed with the client in advance of the transaction.
