Trading (Part VII)

Question 1

What is a TSP seeking permission for a cancellation of an on book trade required to do?

Answer 1

Immediately upon becoming aware of the erroneous trade, request permission from the Director: Market Regulation to cancel the trade by informing him of the original trade, giving details of such trade and the circumstances or reason which resulted in the original trade

Question 2

Having been granted permission to enter into a trade cancellation, within what time must the designated TSP enter the trade into the JSE equities trading system?

Answer 2

Without delay.

Question 3

What is a TSP who is unable to submit a trade cancellation to the JSE equities trading system on the same day as the erroneous on book trade, required to do?

Answer 3

The TSP must submit the trade cancellation as a next day cancellation of an on-book trade without delay on the following business day.

Question 4

What is the administration fee payable by a TSP if it requests permission to cancel an on book trade if such request fails to meet the prescribed criteria?

Answer 4

R2000.

Question 5

How much is the administration fee for an executed trade cancellation of an on book trade and who is liable to pay it?
Who must be compensated for any damage suffered due to loss of price/time priority?

Answer 5

1. R10 000.
2. The TSP responsible for the error.
3. The opposite TSP who in turn must compensate its client.

Question 6

In managing orders received from clients and submitting client and proprietary account orders to the JSE trading system what objectives is a TSP required to meet in addition to other requirements in the rules and directives?

Answer 6

1. AVOIDANCE OF ERRONEOUS ORDERS
   The TSP must implement appropriate procedures to ensure that orders are not submitted to the JSE equities system or left open in the JSE equities trading system where such orders could result in erroneous trades.
2. SETTLEMENT ASSURANCE
   The TSP must implement appropriate procedures to ensure, prior to submitting a client or proprietary order to the JSE equities trading system, that it has the capacity to settle trades resulting from such orders on the settlement date, and that all such trades will not adversely affect the TSP’s ability to meet its financial resources requirements as set out in the rules and directives.

Question 7

What is an OEA?

Answer 7

An order entry application.

Question 8

What is DMA?

Answer 8

Direct market access.

Question 9

Whose written approval does a TSP require to operate an OEA that provides DMA?

Answer 9

The JSE.

Question 10

What are the key objectives that a member must be able to demonstrate, to the satisfaction of the JSE, when applying to operate an OEA that provides DMA?

Answer 10

1. Avoidance of erroneous orders and manipulative practices.
2. Management of order limits and order types
3. Settlement Assurance
4. Adherence to trading phases
5. Maintenance of audit trails
6. Adherence to the rules and directives
7. Adherence to security and technical requirements