Conduct of Business (Part VIII)

Question 1

If a member conducts money broking transactions via a pooled account in the name of the member, which regulation, other than the JSE rules, is the member required to comply with in conducting such transactions?

Answer 1

The conditions published by the Registrar of Banks under paragraph (gg) of the definition of “the business of a bank” in the Banks Act.

Question 2

If a member accepts funds from a client pursuant to a money broking transaction and the funds have not been deposited with a bank on the day of receipt, what is a member required to do?

Answer 2

Deposit the funds with JSET for same day value pending the deposit of the funds with the relevant bank.

Question 3

What is the maximum amount of cash (coin and paper money) a member may receive or accept from any person in a single deposit?

Answer 3

R5 000.

Question 4

At what intervals must a member provide statements to its clients?

Answer 4

1. At regular intervals which may not exceed 3 months unless the clients agree in writing not to receive statements because they are able to access the information made available by the member through electronic means, such as the internet on a continuous basis.
2. Monthly if the client’s portfolio managed by a member includes any transactions or positions in derivative instruments.
3. At such intervals of less than 3 months as the client requests, although the member is not obliged to provide statements more frequently than monthly or;
4. At such intervals as may be agreed between the member and a professional client.

Question 5

List 5 items of information which a client’s statement must contain.

Answer 5

1. JSE authorised investments purchased or sold during the reporting period.
2. Receipts and payments of funds during the reporting period.
3. Details of income earned and expenditure incurred during the reporting period.
4. Non-cash transactions during the reporting period, including non-cash components of corporate actions and option expiries.
5. JSE authorised investments transferred into and out of the portfolio during the reporting period.

Question 6

What are the only circumstances in which a member is permitted, with the prior written concurrence of the Director: Market Regulation, to instruct their bank to amend any transfer of funds by the JSE through the facility of the BDA system between the member’s business account and trust account or JSE trustees?

Answer 6

1. Where the member is aware that the transfer will result in insufficient funds being held in the member’s trust account or JSET.
2. Where the member is of the opinion that the transfer will result in the amount to be held in the member’s trust account or JSET being materially in excess of what it should be.

Question 7

What is the consequence of a member not having sufficient funds or facilities available to effect transfers from its current account to a trust bank account in accordance with the requirement to segregate client’s funds?

Answer 7

The JSE may declare the member to be in default.

Question 8

Under what circumstances are sundry client accounts permitted to be used?

Answer 8

By prior arrangement with the Director: Market Regulation in respect of new issues or similar instances or to maintain the balance in securities held on behalf of clients where securities have been delisted or suspended.