Complaints and Disputes

Client Complaints

• Definition: A client complaint involves a client alleging financial prejudice due to a member's actions in regulated services.
• Examples of member actions that may cause complaints:
  • Failing to comply with client instructions or agreements.
  • Non-compliance with rules or directives.
  • Actions involving dishonesty, negligence, or recklessness
  • Treating clients unfairly or unreasonably
• Entities must have appropriate procedures for handling.

Internal Complaint Handling Procedures

• Complaints must be handled fairly, effectively, and promptly.
• Recurring or systemic issues should be identified, investigated, and resolved.
• Efforts should be made to minimize unresolved complaints that are referred to the JSE.
• Investigations are to be conducted by a competent employee not directly involved in the matter.
• The responsible employee needs necessary authority or access.
• Relevant employees need to know and comply with internal procedures.

Redress

• Compensation must be fair if a member decides to redress in the form of compensation.
• Alternative compensation should be provided as soon as practical.

Recording of Complaints

• A record of all client complaints must be kept for 5 years.
• Records must contain the complainant's identity.
• Records must contain the substance of the complaint.
• Records must contain all correspondence related to the complaint.

Timeous Response to Complaints

• Members must respond within 4 weeks.
• If not, they should provide an explanation of why they can't respond and the expected response time

Unresolved Client Complaints

• Complaints are deemed unresolved if the complainant is not satisfied.
• Complainants can lodge unresolved complaints in writing to the Director: MRD.
• Must occur within 4 weeks of the member's response.
• Must occur within 6 months of the member's conduct.
• Late lodgement can be considered if delay isn't the complainant's fault.
• The JSE MRD can request relevant documents.
• Otherwise, the matter is referred to the JSE Company Secretary.

Member Complaints Against the JSE

• Members can complain against the JSE (exchange control functions) following Act guidelines.
• Complaints are submitted to the JSE Company Secretary.
• For conflicts between regulatory and commercial functions they are lodged with the JSE Company Secretary to the SRO Oversight Committee Chairman.
• JSE / Chairman of SRO has 4 weeks to respond.

Applicability of Dispute Resolution Rules

• Designed to facilitate equitable and fast settlements for disputes involving:
  • A client with a member regarding an unresolved complaint.
  • Disputes between members in derivative security transactions.
  • Disputes between a member and a client in derivative security transactions.
• Only applies when:
  • The dispute exceeds R2 000.
  • The matter isn't already in litigation.
  • The client has a dispute with a member where the amount is over R500 000 and consent is obtained.
  • In disputes between members, they need to show they tried to resolve it.
  • For disputes between a member and a client, consent needs to be obtained.

Reporting of a Dispute

• Any unresolved client complaint is reported as a dispute by the Director: MR to the Company Secretary of the JSE if the client wants dispute resolution
• Disputes between two members about equity securities must be reported in writing by either member to the Company Secretary within 1 week of its discovery.
• Reports must be submitted in writing by the member to the Company Secretary of the JSE within 6 months of the event if a member has a dispute with a client.
• The Company Secretary can request more details about the dispute from any party involved.

Declaration of a Dispute

• A dispute reported under rule 11.80 will be declared a dispute by the Company Secretary and sent to a duly appointed Ombud for consideration, if the criteria in rule 11.70.2 is met.

Consideration by an Ombud

• The JSE appoints an ombud to consider disputes, typically a retired judge or Senior Counsel.
• Within 3 weeks of dispute referral, the claimant must submit a written statement with claim details and relevant documentation to the ombud.
• The ombud may ask the claimant for further details or evidence as necessary.
• The other party, known as the defendant, will get claim information from the ombud.
• The defendant must give ombud a written response in 3 weeks with evidence.
• The ombud may need defendant to provide further evidence.
• Similar disputes can be consolidated into one by the ombud.
• After confirming availability, the ombud gives written notice of the hearing date.
• The ombud makes decisions on dispute issues based on submitted documents without a hearing's necessity.
• Proceedings are conducted without legal representation unless decided otherwise by the ombud.
• Ombud can consult with third parties.
• They have the discretion to call upon any third party to participate in the dispute resolution proceedings.
• After considering the information, the ombud makes a decision within 3 weeks and can provide written reasons if requested.
• The ombud's decision will be provided in writing.
• The ombud may not give a ruling if the dispute is highly complex and better suited for a court of law.
• Decisions made under rule 11.100.12 must be followed within one week.
• If obligations can't be met, due to an adverse finding the member may be labelled a defaulter, after the JSE considers the reason for the inability.
• The claimant can then claim from the JSE Guarantee Fund.

Unless Agreed Otherwise

• Unless agreed otherwise by the JSE, ombud, and parties, the details of the parties, evidence, deliberations, and findings are kept confidential, unless disclosure is required. Costs of the Proceedings
• Parties in a dispute may have to pay the JSE a deposit to cover the proceedings' costs.
• The Ombud can include costs in the award, possibly ordering the losing party to pay all costs.

Limitation of Liability

• No JSE officer, employee, representative or any member of the controlling body, or the ombud is liable for loss or damage from actions done or omitted in good faith or negligence under rule 11.

Member Complaints Against the JSE

• Members can submit complaints against the JSE (exchange control functions) under s10 of Act to the Company Secretary.
• If the JSE doesn't avoid conflicts between regulatory and commercial functions then the member can launch a written to the SRO Oversight Committee Chairman via the Company Secretary.
• JSE / Chairman of SRO must respond within 4 weeks.