Management and Control (Part III) Flashcards
Can a member conduct its business in the absence of a duly appointed settlement officer or alternate settlement officer?
No, except where the Settlement Authority may otherwise direct.
Which employees of a member may exercise discretion in the management of equity securities and those JSE authorised investments not traded on a JSE market, or provide investment advice to clients on any transaction in such securities, on behalf of a member?
- A stockbroker.
- A person who has been exempted from or passed the following registered persons examination of the South African Institute of Financial Markets:
a. an introduction to the financial markets;
b. regulation and ethics of the South African financial markets; and
c. the equity market. - A person who has qualified as a Regular Member of the Chartered Financial Analyst Institute.
- A person who has obtained a pass in the Investment Advice and Portfolio Management module of the South African Institute of Stockbrokers examinations and has been exempted from or obtained a pass in the Regulation and Ethics of the South African Financial Markets module of SAIFM
- A person who has been accustomed to giving investment advice on transactions since prior to 1 December 2000 and has continued to give investment advice since such date.
What is a person, other than a stockbroker, who ceases to manage investments or ceases to provide investment advice for more than 3 years required to do if he wishes to recommence doing so?
Pass one of the examinations which qualify a person to manage investments or advise on transactions.
Which persons, who are resident in the area where the place of business is located, must be in control of the following offices?
1. Primary place of business.
2. Branch office.
3. Agency office
- Stockbroker who must be an executive director of the member.
- Stockbroker in the full-time employ of the member.
- A stockbroker or an employee of a member who has obtained a pass in the compliance officer examination.
Which persons must be in control of the primary place of business and branch offices of a CSP which is not authorised to provide trading services?
A stockbroker or a person who has obtained a pass in the compliance officer examination.
What must the system of internal control employed by a member ensure?
That :
1. The relevant business can be carried on in an orderly and efficient manner.
2. Financial and other information used or provided by the member is reliable.
3. All transactions and financial commitments entered into by the member are recorded and are within the scope of authority of the member or the employee acting on behalf of the member.
4. There are procedures to safeguard the assets of the member and assets belonging to any other person for which the member is accountable, and to control liabilities.
5. There are measures, so far as is reasonably practicable, to minimize the risk of loss to the member or the clients of the member which results from any irregularity, fraud or error and to detect any irregularity, fraud or error should they occur so that prompt remedial action may be taken by the member or the management of the member.
What are the regulatory objectives in the establishment of risk management principles and procedures?
To ensure that the records of a member are maintained in such a manner as to promptly disclose financial and business information that will enable the member or management of the member to:
1. Identify, quantify, control and manage the risk exposures of the member.
2. Make timely and informed business decisions.
3. Monitor the performance and all aspects of the business of the member.
4. Monitor the capital of the member to ensure compliance with the capital adequacy requirements imposed in terms of the rules.
5. Monitor the quality of the member’s assets.
To whom must a member be able to describe and demonstrate the objectives and operation of its internal control and risk management systems?
To the member’s auditor and to the JSE.
