Conduct of Business (Part XI)

Question 1

Under what circumstances is a CSP permitted to transfer uncertificated securities within a nominee register from a resident controlled client account to a non-resident controlled client account?

Answer 1

Under no circumstances.

Question 2

What procedures are required to be followed by a CSP when submitting certificates for dematerialisation to ensure that certificates submitted on behalf of a non-resident client reflect a non-resident endorsement?

Answer 2

1. The certificates held on behalf of non-resident clients reflecting non-resident endorsement must be submitted in separate batches from certificates held on behalf of residents which are not endorsed.
2. The covering document submitted with those batches must clearly indicate that the certificates are held on behalf of non-resident clients to enable the CSD participant to confirm by their signature on the covering document that all of the certificates in those batches are endorsed non-resident.

Question 3

If a CSP wishes to dematerialise a certificate held on behalf of a non-resident and the certificate is not endorsed non-resident, what is the CSP required to do prior to submitting the certificate for dematerialisation?

Answer 3

Either:
1. Obtain an endorsement; or
2. Where the client is identified as not in fact being a non-resident and the Exchange Control Indicator on the CLMNT screen on BDA is incorrect, transfer the shares to a resident account in the name of the client.

Question 4

What are “inward listed securities”?

Answer 4

Means shares issued by foreign companies which have been listed on the JSE in terms of the South African Reserve Bank’s exchange control regulations

Question 5

Can companies, trusts, partnerships and banks trade and hold inward listed securities?

Answer 5

Yes

Question 6

Do institutional clients have to obtain Exchange approval prior to trading in inward listed securities?

Answer 6

No

Question 7

Can a member trade in inward listed securities for emigrant clients?

Answer 7

No.

Question 8

If the Settlement Authority picks up a trade in inward listed securities on an emigrant client’s account what will the member be instructed to do?

Answer 8

Move the deal to a misdeals account and assume responsibility for the settlement on settlement day.