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Questions and Answers
What is the primary function of the Compensation Funds established by the JSE?
What is the primary function of the Compensation Funds established by the JSE?
- To pay claims arising from all trading activities of a member.
- To compensate for liabilities originating from defaulting trading members only. (correct)
- To provide interest earnings for the JSE from trading transactions.
- To ensure profits for trading members in IRC securities.
What determines the amount that can be claimed from the Compensation Funds?
What determines the amount that can be claimed from the Compensation Funds?
- The specified amount in the rules of the respective funds. (correct)
- The total value of transactions conducted by the trading member.
- The discretion of the trustees managing the Compensation Funds.
- The profitability of the trading member's operations.
How may the JSE manage the assets and liabilities of the Compensation Funds?
How may the JSE manage the assets and liabilities of the Compensation Funds?
- Via automatic allocation by government regulations.
- Through trustees appointed to oversee the funds. (correct)
- Direct management by the JSE's board of directors.
- By outsourcing to external financial consultants.
In relation to transactions involving IRC securities, what is the role of a trading member regarding the levy for the Compensation Funds?
In relation to transactions involving IRC securities, what is the role of a trading member regarding the levy for the Compensation Funds?
What authority does the JSE have regarding settlement systems?
What authority does the JSE have regarding settlement systems?
What is the primary purpose of the Johannesburg Stock Exchange (JSE) IRC Rules and Directives?
What is the primary purpose of the Johannesburg Stock Exchange (JSE) IRC Rules and Directives?
Which entities are bound by the JSE IRC Rules and Directives?
Which entities are bound by the JSE IRC Rules and Directives?
What condition must be met for every transaction in IRC securities to be valid?
What condition must be met for every transaction in IRC securities to be valid?
What is the role of a clearing house as described in the JSE IRC Rules and Directives?
What is the role of a clearing house as described in the JSE IRC Rules and Directives?
What has been the effect of the integration of Yield-X and BESA in the JSE?
What has been the effect of the integration of Yield-X and BESA in the JSE?
How did the Yield-X rules influence the newly integrated markets under the JSE?
How did the Yield-X rules influence the newly integrated markets under the JSE?
What is the primary function of the objects of the JSE as outlined in its Memorandum and Articles of Association?
What is the primary function of the objects of the JSE as outlined in its Memorandum and Articles of Association?
Which of the following best describes the concepts of fairness and efficiency in market transactions according to the JSE IRC Rules?
Which of the following best describes the concepts of fairness and efficiency in market transactions according to the JSE IRC Rules?
The Compensation Funds established by the JSE are intended to cover losses related to transactions involving ABC securities.
The Compensation Funds established by the JSE are intended to cover losses related to transactions involving ABC securities.
Trading members must comply with specific procedures when using the JSE's settlement systems.
Trading members must comply with specific procedures when using the JSE's settlement systems.
The trustees of the Compensation Funds are responsible for determining the levy imposed on trading members.
The trustees of the Compensation Funds are responsible for determining the levy imposed on trading members.
The income derived from trading members' levy contributions is owned by the trading members themselves.
The income derived from trading members' levy contributions is owned by the trading members themselves.
A defaulting trading member is allowed to deny responsibility for claims made against them at any time.
A defaulting trading member is allowed to deny responsibility for claims made against them at any time.
The JSE can appoint a clearing house for the purpose of clearing and/or settling trades in IRC securities.
The JSE can appoint a clearing house for the purpose of clearing and/or settling trades in IRC securities.
The rules and directives of the JSE are only binding on trading members and their officers.
The rules and directives of the JSE are only binding on trading members and their officers.
Every transaction in IRC securities must comply with provisions of the Act, the Rules, and Directives.
Every transaction in IRC securities must comply with provisions of the Act, the Rules, and Directives.
The Yield-X and BESA rules and directives were integrated, resulting in the creation of a new set of rules named Yield-BESA.
The Yield-X and BESA rules and directives were integrated, resulting in the creation of a new set of rules named Yield-BESA.
Clearing members of the JSE are exempt from the requirements set by the IRC Rules and Directives.
Clearing members of the JSE are exempt from the requirements set by the IRC Rules and Directives.
The primary objective of the JSE IRC Rules and Directives is to ensure that trade is carried out in an orderly manner.
The primary objective of the JSE IRC Rules and Directives is to ensure that trade is carried out in an orderly manner.
The JSE operates interest rate securities and currency derivatives through independent markets without integration.
The JSE operates interest rate securities and currency derivatives through independent markets without integration.
Only the Johannesburg Stock Exchange can determine the procedures necessary for regulating markets.
Only the Johannesburg Stock Exchange can determine the procedures necessary for regulating markets.
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Study Notes
Purpose and Enforcement of Rules
- The JSE IRC Rules aim to regulate fair and efficient markets while ensuring orderly business operations aligned with the Act's objectives.
- These rules are binding on trading members, their officers, employees, clients, and any entity conducting transactions with trading members.
Transaction Conditions
- All IRC securities transactions by trading members are subject to the Act's provisions, as well as the JSE's Rules and Directives.
Clearing House Appointment
- The JSE can appoint a clearing house or central counterparty (CCP) for clearing and settling trades in IRC securities according to established rules.
Integration of Markets
- Yield-X and BESA markets were integrated, combining their rules and directives.
- The integrated framework is known as the JSE IRC Rules and Directives, building on the Yield-X rules with necessary amendments.
Compensation Funds
- The JSE can establish Compensation Funds to settle claims against defaulting trading members, limited to IRC securities transactions.
- The funds are financed by levies on trading members, which can be passed on to clients involved in transactions.
- Trustees manage the Compensation Funds' assets, liabilities, and income, including member levies.
Settlement System Operations
- The JSE may operate settlement systems or partner with third-party providers, enforcing compliance with procedures and fees for trading members.
Purpose and Enforcement of Rules
- The JSE IRC Rules aim to regulate fair and efficient markets while ensuring orderly business operations aligned with the Act's objectives.
- These rules are binding on trading members, their officers, employees, clients, and any entity conducting transactions with trading members.
Transaction Conditions
- All IRC securities transactions by trading members are subject to the Act's provisions, as well as the JSE's Rules and Directives.
Clearing House Appointment
- The JSE can appoint a clearing house or central counterparty (CCP) for clearing and settling trades in IRC securities according to established rules.
Integration of Markets
- Yield-X and BESA markets were integrated, combining their rules and directives.
- The integrated framework is known as the JSE IRC Rules and Directives, building on the Yield-X rules with necessary amendments.
Compensation Funds
- The JSE can establish Compensation Funds to settle claims against defaulting trading members, limited to IRC securities transactions.
- The funds are financed by levies on trading members, which can be passed on to clients involved in transactions.
- Trustees manage the Compensation Funds' assets, liabilities, and income, including member levies.
Settlement System Operations
- The JSE may operate settlement systems or partner with third-party providers, enforcing compliance with procedures and fees for trading members.
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