Client Complaints and Resolutions in Trading

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Questions and Answers

What is the maximum time frame for a trading member to respond to a client complaint?

6 weeks

4 weeks (correct)

2 weeks

8 weeks

What must a trading member include in the record of each complaint?

The substance of the complaint (correct)

All previous complaints by the same complainant

A summary of market trends at the time of the complaint

The identity of the employees handling the case

What qualifies a complaint as unresolved?

When the complainant is not satisfied with the resolution proposed (correct)

When the complainant is satisfied with the response

When the trading member fails to provide compensation

When the complaint is not documented properly

If a trading member determines compensation is appropriate, what must they do?

Provide fair compensation and comply with any accepted offer Signup and view all the answers

What is the retention period for records of client complaints by a trading member?

5 years Signup and view all the answers

Within what timeframe must a complainant lodge an unresolved complaint with the Director: Market Regulation?

4 weeks of trading member's response Signup and view all the answers

Under what condition can an unresolved complaint be considered after the specified period?

If the complainant has valid reasons for the delay Signup and view all the answers

What may the JSE Market Regulation Division request in reviewing a complaint?

Copies of all relevant correspondence and documentation Signup and view all the answers

What is the maximum time allowed for the JSE Market Regulation Division to resolve a complaint before it is referred to the Company Secretary?

4 weeks Signup and view all the answers

Which of the following scenarios does NOT fall under the applicability of the dispute resolution rules?

A client disputes a charge of R1,500 with a trading member. Signup and view all the answers

Under what condition can a dispute with a trading member exceed R500,000 and still proceed through the dispute resolution rules?

Both parties give their consent to proceed. Signup and view all the answers

What must a trading member prove to the Director: Market Regulation in order to initiate dispute resolution with another trading member?

Evidence of reasonable efforts to resolve the dispute. Signup and view all the answers

What action must the Director: Market Regulation take if a client chooses to pursue an unresolved complaint after 4 weeks?

Report it as a formal dispute to the Company Secretary. Signup and view all the answers

In what case can a dispute between trading members concerning IRC securities be reported without delay?

When it is reported within 1 week of the dispute arising. Signup and view all the answers

Which of the following is required for the dispute resolution rules to apply if a client has a complaint against a trading member?

The amount must exceed R2,000. Signup and view all the answers

Which factor allows the disputing process between a trading member and a client to move forward?

Express consent from the client to proceed. Signup and view all the answers

What is the maximum time frame for a trading member to report a dispute in writing to the Company Secretary of the JSE?

6 months Signup and view all the answers

Who can the ombud appointed to consider a dispute be?

A retired judge of the High Court of South Africa Signup and view all the answers

What must the claimant provide within 3 weeks after the dispute has been referred to the ombud?

A written statement of the claim with all relevant documentation Signup and view all the answers

How must the defendant respond to the written statement of claim provided by the ombud?

In a written response, within 3 weeks Signup and view all the answers

What may the ombud require from the claimant after reviewing the statement of claim?

An expansion of the statement or further evidence Signup and view all the answers

Under what condition may the ombud decide to consolidate disputes?

If they are based on similar occurrences or facts Signup and view all the answers

What role does the Company Secretary of the JSE play in the dispute process?

Requests further information from parties involved Signup and view all the answers

What is the purpose of providing evidence with the written response from the defendant?

To substantiate their position in the dispute Signup and view all the answers

What is the definition of a client complaint according to the rules?

Any complaint in relation to the provision of regulated services alleging potential financial prejudice. Signup and view all the answers

Which of the following is NOT listed as a reason that may lead to a client complaint?

Providing services at a higher than standard fee. Signup and view all the answers

What must a trading member’s internal complaint handling procedures provide for?

The provision of JSE Ombud Scheme information upon notifying a decision. Signup and view all the answers

Which statement reflects the ultimate goal of a trading member’s internal complaint handling procedures?

To handle complaints fairly, effectively, and promptly. Signup and view all the answers

What is a required feature of the complaint investigation process?

A sufficiently competent employee without direct involvement in the matter investigates. Signup and view all the answers

Who needs to be aware of the internal complaint handling procedures?

Relevant employees must be aware and comply. Signup and view all the answers

Which aspect is essential for minimizing unresolved complaints referred to the JSE?

Implementing robust tracking and recording of all complaints. Signup and view all the answers

What authority must the employee responsible for resolving complaints have?

The employee must have the necessary authority or access to someone who does. Signup and view all the answers

What is the time frame within which the ombud must make a decision after considering the dispute?

3 weeks Signup and view all the answers

Under what circumstances may the ombud decide to allow legal representation for the parties?

At the ombud's sole discretion Signup and view all the answers

What must parties do in response to a decision made by the ombud?

Comply with the decision within 7 days Signup and view all the answers

What discretion does the ombud have concerning third parties during dispute resolution?

He may consult and call upon third parties to participate Signup and view all the answers

When can the ombud choose not to provide a ruling on a dispute?

If the dispute is too complex for the process Signup and view all the answers

What principle must the ombud apply when dealing with disputes?

Principles of equity where appropriate Signup and view all the answers

What is required from the parties before the proceedings commence?

A deposit to cover a portion of the costs Signup and view all the answers

How is the confidentiality of the dispute resolution proceedings maintained?

By a mutual agreement among the parties and the ombud Signup and view all the answers

Which of the following constitutes a basis for a client complaint?

Failure to comply with a client's instruction Signup and view all the answers

What key feature is crucial for a trading member's internal complaint handling procedures?

Providing information about the JSE Ombud Scheme upon decision notification Signup and view all the answers

To effectively minimize unresolved complaints referred to the JSE, a trading member should ensure which of the following?

Recurring problems are identified and resolved promptly Signup and view all the answers

What is a necessary characteristic of the employee responsible for resolving client complaints?

The employee must possess sufficient authority to resolve complaints Signup and view all the answers

Which process should be included in a trading member's internal complaint handling procedures?

Regular updates to clients about ongoing complaints Signup and view all the answers

Which aspect is crucial for ensuring fair and effective handling of client complaints?

Adhering to standardized procedures that are known to all staff Signup and view all the answers

Which of the following statements is true regarding the JSE Ombud Scheme?

It is designed to handle unresolved complaints following member notification Signup and view all the answers

What is a key requirement for the investigation of complaints within trading members?

Any related party should not engage in the investigation Signup and view all the answers

What action must a trading member take within 6 months of a dispute arising regarding IRC securities?

Report the dispute in writing to the Company Secretary of the JSE Signup and view all the answers

What must a claimant include in the written statement submitted to the ombud?

All relevant documentation supporting the claim Signup and view all the answers

Who is eligible to be appointed as an ombud for considering disputes?

A retired judge of the High Court of South Africa or a Senior Counsel Signup and view all the answers

What is one of the actions the ombud may take after reviewing the claimant's statement?

Request the claimant to provide additional evidence or particulars Signup and view all the answers

What is the timeframe for the defendant to respond to the written statement of claim?

Within 3 weeks Signup and view all the answers

Under what circumstance may the ombud consolidate several disputes into a single case?

When the disputes are based on similar occurrences or facts Signup and view all the answers

What document must the defendant attach to their written response to the ombud?

All other evidence relating to the dispute Signup and view all the answers

What must happen if the ombud requires the claimant to reply to the defendant's response?

The claimant must reply within a reasonable time as specified by the ombud Signup and view all the answers

What is the ombud required to do after considering the dispute?

Provide written reasons for the decision if requested Signup and view all the answers

What is the primary obligation of a trading member upon receiving a client complaint?

To acknowledge receipt and explain the delay if unable to respond. Signup and view all the answers

Under what condition can the ombud decide not to provide a ruling on a dispute?

If the dispute requires complex legal interpretation beyond the ombud's scope Signup and view all the answers

What principle does the ombud apply when resolving disputes, if applicable?

Principles of equity Signup and view all the answers

What information must be included in the record of a client complaint?

All correspondence related to the complaint. Signup and view all the answers

What financial obligation might parties face before dispute resolution proceedings commence?

Paying a deposit determined by the JSE to cover part of the costs Signup and view all the answers

What happens if a client is not satisfied with the proposed resolution of their complaint?

They can escalate the matter to the JSE Market Regulation Division. Signup and view all the answers

What is the time frame in which the ombud must make a decision after considering the information presented?

Three weeks Signup and view all the answers

What is the maximum period within which a complainant must lodge an unresolved complaint after receiving a response from the trading member?

4 weeks. Signup and view all the answers

Which situation permits the dispute resolution rules to apply between a client and a trading member?

The client consents to proceed with the dispute. Signup and view all the answers

Under what condition can an unresolved complaint be considered by the JSE Market Regulation Division if it is submitted late?

If the delay was through no fault of the client. Signup and view all the answers

How are the proceedings and deliberations of the ombud treated in terms of confidentiality?

Kept confidential unless disclosure is required by law Signup and view all the answers

What is the required action for trading members when a dispute arises concerning IRC securities?

Submit a written report to the Company Secretary within 1 week. Signup and view all the answers

What authority does the ombud have regarding consulting with third parties?

Has the discretion to involve third parties if deemed necessary Signup and view all the answers

How long must trading members retain records of client complaints?

5 years. Signup and view all the answers

Under which condition can a dispute resolution continue if the amount in dispute exceeds R500,000?

If both parties agree to the proceedings. Signup and view all the answers

If a trading member opts for redress in a form other than compensation, what is required of them?

They must provide redress immediately upon deciding. Signup and view all the answers

Within what timeframe must a party comply with the ombud's decision?

Within seven days of the decision being made Signup and view all the answers

What must occur if the JSE Market Regulation Division cannot resolve a client complaint within 4 weeks?

The complaint must be referred to the Company Secretary for formal dispute resolution. Signup and view all the answers

What constitutes a valid reason for applying the dispute resolution rules between trading members?

Both trading members have attempted to resolve the issue amicably. Signup and view all the answers

What is the first step a client should take if they wish to escalate an unresolved complaint?

Lodge the complaint with the Director: Market Regulation in writing. Signup and view all the answers

What is the minimum amount required for a dispute to be eligible for resolution according to the dispute resolution rules?

R2,000 Signup and view all the answers

What must the Director: Market Regulation report if an unresolved client complaint is pursued?

The dispute is to be reported to the Company Secretary of the JSE. Signup and view all the answers

In which scenario can the dispute resolution rules NOT be applied?

When there is existing litigation regarding the dispute. Signup and view all the answers

Study Notes

Client Complaints

A client can complain to a trading member if they have suffered or are likely to suffer financial prejudice.
- Reasons include the trading member contravening instructions, failing to comply with rules, acting dishonestly, negligently, or recklessly, or treating the client unfairly.
Trading members must have procedures for handling client complaints.
- These must provide information on the JSE Ombud Scheme, receive oral or written complaints, investigate complaints, decide on a response to a complaint, notify the client of the decision, and record the complaints.
Trading members must respond to complaints within four weeks, providing an explanation if they cannot respond within that timeframe.
Redress for a complaint can be in the form of compensation or some other form.
Trading members must maintain a record of all client complaints for five years.

Unresolved Client Complaints

A complaint is deemed unresolved if the client is not satisfied with the resolution proposed by the trading member.
The client can lodge an unresolved complaint in writing with the Director: Market Regulation.
The complaint must be lodged within four weeks of receiving the trading member's response and within six months of the conduct giving rise to the complaint.
The complaint will be referred to the Company Secretary of the JSE if the JSE Market Regulation Division cannot facilitate a resolution within four weeks.

Disputes

The JSE has dispute resolution rules to facilitate equitable and expeditious settlement of disputes between clients and trading members.
These rules apply to unresolved client complaints and disputes between trading members regarding transactions in IRC securities.
The amount in dispute must be in excess of R2,000 and not the subject of existing litigation.
If a dispute is related to a client and trading member, the amount in dispute must either be less than R500,000, or greater than R500,000 with the consent of both parties.
If the dispute is between two trading members, they must provide evidence to the Director: Market Regulation that they have made reasonable efforts to resolve the dispute and both parties must consent to proceed.
A client dispute with a trading member requires client consent to proceed.

Reporting a Dispute

The Director: Market Regulation will report unresolved client complaints as a dispute to the Company Secretary of the JSE if the client chooses to pursue the dispute resolution process.
Trading members must report disputes with other trading members in writing to the Company Secretary of the JSE within one week of the dispute arising.
Trading members must report disputes with clients in writing to the Company Secretary of the JSE within six months of the dispute arising.
The Company Secretary of the JSE may request additional information from any party involved in the dispute.

Declaration and Consideration of a Dispute

Once the Company Secretary has received a dispute report, it will be declared a dispute and referred to a duly appointed ombud.
The Ombud Committee will appoint an ombud to consider the dispute, which can be a retired judge of the High Court or a Senior Counsel.
The claimant must provide a written statement outlining the subject matter of the claim and all relevant documentation within three weeks of the dispute being referred to the ombud.
The defendant must provide a written response to the statement of claim within three weeks of receiving it.
The ombud may require further information from either party.
The ombud may consolidate disputes based on similar incidents.
The ombud will notify both parties of the hearing date.
The ombud may make a decision based on the submitted documents without a hearing.
Legal representation is not permitted unless the ombud grants permission.
The ombud may consult third parties for advice.
The ombud must apply principles of equity when dealing with a dispute.
The ombud will make a decision within three weeks of considering the dispute.
The ombud's decision must be complied with by the relevant party within seven days of being made.
The identity of the parties and other information related to the dispute will be kept confidential unless disclosure is required by law.

Costs of Proceedings

The parties in a dispute resolution proceeding may be required to pay a deposit to the JSE to cover costs.

Complaints

Client complaints are defined as any complaint in relation to the provision of regulated services, in which the client alleges that he has suffered, or is likely to suffer, financial prejudice due to the trading member's actions or inactions.
Internal complaint handling procedures must be established and maintained by trading members to ensure fair, effective, and prompt handling of client complaints, minimizing unresolved complaints.
Timeous response to complaints is mandatory, requiring trading members to respond to a complaint within 4 weeks of receiving it or provide an explanation for the delay and a timeframe for response.
Redress involves providing fair compensation or other forms of redress when appropriate to resolve a complaint.
Recording of complaints is crucial, requiring trading members to maintain records of all client complaints, including the identity of the complainant, the substance of the complaint, and all correspondence related to the complaint. Records must be kept for 5 years.
Unresolved client complaints can be lodged with the JSE Market Regulation Division if the complainant is unsatisfied with the resolution proposed by the trading member. The complaint must be lodged within 4 weeks of receiving the trading member's response and within 6 months of the conduct giving rise to the complaint. The JSE Market Regulation Division may request relevant documentation and will endeavor to facilitate a resolution before referring the complaint to the JSE Company Secretary for dispute resolution.

Disputes

Applicability of dispute resolution rules applies to unresolved client complaints, disputes between trading members regarding transactions in IRC securities, and disputes between a trading member and a client regarding transactions in IRC securities. These rules are only applicable when the amount in dispute exceeds R2 000, the dispute is not subject to existing litigation, and other specific conditions are met regarding the amount in dispute and consent requirements.
Reporting of a dispute requires reporting to the JSE Company Secretary within a specified timeframe, depending on the nature of the dispute.
Declaration of a dispute occurs when a dispute is reported and the JSE Company Secretary declares it a dispute and refers it to a duly appointed ombud.
Consideration by an ombud involves the appointment of a retired High Court judge or Senior Counsel to consider the dispute. The claimant must provide a written statement within 3 weeks of the referral, and the defendant must provide a written response within 3 weeks of receiving the statement of claim. The ombud decides on the course of action, including potential hearings, and attempts to reach a decision within 3 weeks of considering the dispute. The ombud will provide written reasons for their decision and the decision must be complied with within 7 days.
Costs of the proceedings may include a deposit payment by the parties to cover a portion of the costs of the dispute resolution proceedings.

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Description

This quiz examines the key procedures and regulations related to client complaints in trading. Topics include the definition of complaints, the responsibilities of trading members, and the mechanisms for resolving disputes. Test your understanding of how the JSE Ombud Scheme and complaint handling processes work.