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Questions and Answers
What must a trading member ensure regarding the orders placed by clients before entering them into the JSE trading system?
What type of training should employees involved in order receipt and transaction execution receive?
What is the primary objective of the compliance monitoring procedures that a trading member must establish?
What is NOT expected from a trading member when monitoring transactions on the JSE trading system?
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Which provision outlines the prohibited trading practices that trading members must avoid?
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What is an essential requirement for trading members regarding employee training related to market abuse?
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Regarding compliance monitoring procedures, what is specifically required from a trading member?
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What action must a trading member take before entering client orders into the JSE trading system?
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What is emphasized in the compliance monitoring procedures implemented by a trading member?
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What is NOT a responsibility of trading members regarding order entry and execution?
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A trading member is required to monitor every order and trade executed on the JSE trading system to identify potential market abuse.
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Employees involved in receiving orders and executing transactions do not need to be familiar with the market abuse provisions.
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The compliance monitoring procedures must have the objective of identifying and taking action on orders that may breach sections 78 and 80 of the Act.
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A trading member must ensure that there is no need for training related to market abuse for its employees.
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A trading member must take reasonable steps to ensure that client orders do not result in a breach of section 80 of the Act.
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Study Notes
Prevention and Detection of Market Abuse
- Trading members must thoroughly assess client orders before entering them into the JSE trading system. They must ensure these orders, and any resulting trades, won't violate Section 80 of the Act, which prohibits specific trading practices.
- Trading members are responsible for equipping all employees involved in client order receipt and transaction execution with a comprehensive understanding of market abuse provisions outlined in Sections 77 to 80 of the Act. This includes providing adequate training and guidance to enable employees to recognize and prevent transactions that could violate these provisions.
- Trading members must incorporate specific monitoring procedures to scrutinize orders entered and trades executed on the JSE trading system, both by themselves and their employees. The goal is to identify and take appropriate action against suspected market abuse, specifically focusing on potential breaches of Sections 78 and 80 of the Act.
- While comprehensive monitoring is essential, trading members are not obligated to meticulously review every single order and trade undertaken by them or their employees for potential market abuse. They must focus their efforts effectively on identifying potential issues through tailored monitoring procedures.
Prevention and Detection of Market Abuse
- A trading member is obligated to consider the circumstances of client orders before entering them into the JSE trading system.
- They must also ensure that these orders and any resulting trades do not violate the prohibited trading practices outlined in section 80 of the Act.
- Trading members must ensure their employees involved in client order reception and execution are familiar with market abuse provisions in sections 77 to 80 of the Act.
- These employees should receive adequate training and guidance to help them identify and avoid transactions that might lead to breaches of these provisions.
- Trading members must employ compliance monitoring procedures that specifically target orders entered and transactions executed on the JSE trading system.
- These procedures are meant to identify orders or trades that could potentially constitute a violation of sections 78 and 80 of the Act and to take appropriate action.
- While comprehensive monitoring of all orders and trades is not required, trading members are tasked with developing and implementing procedures to identify potential market abuse.
Market Conduct Rules: Prevention and Detection of Market Abuse
- Trading members' due diligence: Before entering client orders, trading members must assess if the order could lead to a breach of the Act's prohibited trading practices.
- Employee training: Trading members must ensure employees involved in client order receipt and execution understand market abuse regulations, receive adequate training, and can recognize and avoid transactions that violate the Act.
- Compliance monitoring procedures: These procedures must monitor orders and trades executed on the JSE trading system to identify potential market abuse, and take appropriate action.
- Focus on potential abuse: Trading members are not required to monitor every single order and trade, but should focus on identifying potential market abuse.
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Description
This quiz focuses on the critical practices trading members must adopt to prevent and detect market abuse within the JSE trading system. It highlights the responsibilities of trading members regarding client orders, employee training, and monitoring procedures to ensure compliance with the relevant sections of the Act.
