People and Risk Management.docx

People and Risk Management -------------------------- ### General requirements of Officers A trading member must, in the opinion of the JSE and at all times, be managed and controlled by persons with a good reputation and high business standing. Officers of trading members shall, subject to any wa...

People and Risk Management -------------------------- ### General requirements of Officers A trading member must, in the opinion of the JSE and at all times, be managed and controlled by persons with a good reputation and high business standing. Officers of trading members shall, subject to any waiver by the JSE -- - be of full legal capacity; - comply with such criteria of good character and high business integrity as the JSE deems fit; - not be an unrehabilitated insolvent; and - not in the period preceding the application as the JSE in its discretion deems fit, have been -- - convicted of an activity constituting a criminal offence involving fraud, theft, dishonesty, or market abuse, whether in the Republic or elsewhere - held civilly or administratively liable for, inter alia, fraud, theft, dishonesty, or market abuse, whether in the Republic or elsewhere; - declared to have contravened legislation in respect of market abuse, money laundering or terrorist or related activity, with or without the imposition of an administrative penalty, whether in the Republic or elsewhere; - disqualified by a court from acting as a director of a company; - the subject of a formal investigation by any regulatory or government agency; - expelled, whether as a trading member or otherwise, from any exchange or external exchange; - employed by or associated with a trading member of any exchange or external exchange, which trading member was expelled from that exchange and where the person or officer has, in the opinion of the JSE, contributed to the circumstances leading to the expulsion; - declared a defaulting trading member of the JSE or any other exchange or external exchange; - refused entry to or expelled from any profession or vocation or been dismissed or requested to resign from any office or employment, or from any fiduciary office or position of trust; or - refused approval to operate as a financial services provider in terms of the FAIS Act or any other act. - Any waiver by the JSE may be for a limited period and may be withdrawn at any time provided that the JSE gives the trading member one calendar months' notice of its intention to withdraw such waiver. - All trading members shall at all times have and maintain the necessary procedures, administrative and other systems, facilities, resources, and expertise to ensure -- - the effective performance of the regulated services that they provide; - compliance with the Act and the rules and directives that are relevant to the performance of such regulated services; - compliance with the Financial Intelligence Centre Act; - that the management of their own and/or clients' funds is adequate and in accordance - with the rules relating to the management or separation of funds; - that an accurate record of their own and/or clients' positions is kept at all times; - that where a trading member transacts for or on behalf of clients, their clients' transactions, cash balances and any other information relating to their positions are timeously reported to the clients; and - that they comply with all the financial resources requirements pertaining to the relevant category of authorised user as prescribed in these rules. - A trading member that intends to enter into transactions which will be cleared by JSE Clear in terms of section 8 of the IRC Rules must have appointed a clearing member or have been authorised as a clearing member. - A trading member that intends to enter into transactions in bonds on the JSE trading system must have appointed a CSDP. ### Trading member's obligation to ensure registration of officers Each trading member must ensure the registration by the JSE of a compliance officer, a settlement officer, and an alternate settlement officer. Compliance Officer shall -- - without relieving the trading member from its responsibility to comply with the provisions of the Act and these rules, be responsible for ensuring compliance by that trading member with the provisions of the Act and these rules; - have obtained such qualification as may be required by the JSE; - in the event of any breach of these rules or problem or query arising in respect of any transaction or alleged transaction or position of the trading member or any of its clients immediately on the request of the JSE or JSE Clear or its clearing member, take such steps as may be necessary to rectify the breach or to eliminate the problem or to satisfy the query; - receive all notices to the trading member from the JSE or JSE Clear or the clearing member and be responsible to ensure that all such notices are complied with; and - ensure compliance with all prescribed agreements set out in the directives to these rules. Settlement Officer must -- - have obtained such qualification as may be required by the JSE; - deal with all queries by the JSE in relation to settlement; - ensure that all transactions are settled in terms of these rules and directives; - advise the JSE of any issue that may potentially impact on the settlement of a transaction; and - cooperate with the Settlement Authority to ensure the efficient and timeous settlement of all transactions. Alternate Settlement Officer must -- - have obtained such qualification as may be required by the JSE; - in the absence of the settlement officer deal with all queries by the JSE in relation to settlement; - in the absence of the settlement officer ensure that all transactions are settled in terms of these rules and directives; - in the absence of the settlement officer advise the JSE of any issue that may potentially impact on the settlement of a transaction; and - in the absence of the settlement officer cooperate with the Settlement Authority to ensure the efficient and timeous settlement of all transactions. A trading member shall **not carry on business** for more than two months in any continuous period of twelve months unless such trading member **has registered a compliance officer, a settlement officer, and an alternate settlement** officer. Provided that in the absence of a duly appointed compliance or settlement officer or alternate settlement officer, or where the post has become vacant, a **senior director shall temporarily assume the responsibility** of the compliance or settlement or alternate settlement officer, for no longer than **2 months.** A trading member shall ensure the registration by the JSE of traders who shall be the only persons entitled to trade for a trading member's own account and for and on behalf of clients and who shall have obtained such qualification that may be required by the JSE. A trading member may not trade without having at least one trader present at the trading member\'s place of business unless the JSE has in writing granted temporary registration to a person nominated in writing by the trading member to trade for a period not exceeding 15 business days in the absence of such trader. The JSE shall publish the name of such nominee in a notice to trading members. Registration of Officers by the JSE An application for registration as a registered officer shall be made to the JSE in the manner prescribed by the JSE. - A person who seeks to be registered with the JSE as a registered officer must satisfy the general requirements and must have obtained a pass in the relevant qualifications, as prescribed in the interest rate and currency derivatives directives. - A trading member shall notify the JSE in writing of its decision to terminate the registration of a registered officer in its name, in which event the JSE may request full details of the circumstances of the termination. - The registration or termination of the registration of a registered officer in the name of a trading member in an office shall become effective on the date stipulated in the written notification to the trading member by the JSE, confirming the registration or termination of registration of the registered officer. ### Duty to Furnish Information A trading member shall forthwith advise the JSE in writing of -- - the granting of an application for, or the revocation of, or the recognition under any statutory enactment of any registration, authorisation or licence which may bear upon or be associated with its business as a trading member of the JSE; - any of the circumstances referred to above arising; - conviction of the trading member or any of its officers of any offence under legislation relating to banking, or other financial services, companies, insolvency, insurance and pension and provident societies or of any offence involving fraud or dishonesty; - any person becoming or ceasing to be a director of the trading member; any change in the name or address of any office of the trading member, and of any change in the trading member's telephone or facsimile numbers or electronic mailing addresses; - any change in the particulars relating to an officer, and of the event that any officer is found guilty of any improper conduct by any licensed exchange, a previous or current employer, a professional association, or a court of law; or - the dismissal of an employee for committing or attempting to commit an act which is dishonest, fraudulent, dishonorable, or disgraceful. - A trading member shall in addition inform the JSE in writing -- - of any person holding, or having a beneficial interest in, 20% or more of any class of the share capital of a trading member and of any change in such holding; - if it or any employee thereof holds, or has a beneficial interest in, any class of the share capital of a client that is a company or in the membership interest of a client that is a close corporation. - A trading member shall submit to the Director: Market Regulation within three months after the end of its financial year, a copy of its audited annual financial statements, and the audit report prescribed by the Act, in respect of such period. - A trading member shall submit the prescribed monthly capital adequacy return monthly to the Director: Market Regulation within ten business days of the end of the month or within such other period that the JSE may require provided that the trading member shall at all times comply with the capital adequacy requirements referred to in these rules, and provided further that the JSE may suspend a trading member from trading, if the return is not submitted timeously. - A trading member that-- - is a bank; - is a branch of a foreign bank; - does not trade in bonds and that trades in derivative instruments listed on the JSE solely for its own account; or - is a state-owned entity, - shall be exempt from the requirement to submit the monthly capital adequacy return, provided that the trading member has advised the JSE, in writing, that it meets the requirements as prescribed by IRC Rules. - A trading member that is an authorised user of another exchange may apply in writing to the Director: Market Regulation for exemption from the requirement to submit the monthly capital adequacy return provided the capital requirements of the other exchange are, in the opinion of the Director: Market Regulation, similar to those imposed by the JSE and the trading member is required to submit a return to the other exchange. - In considering an application for an exemption, the Director: Market Regulation will consider the relative activity undertaken by the trading member on the JSE and the other exchange in order to determine whether it is preferable for the other exchange to act as the lead regulator in relation to the supervision of compliance with capital adequacy requirements by the trading member. - If a trading member is granted an exemption, the trading member may be required at any time to submit to the Director: Market Regulation, a copy of any capital adequacy return submitted to the other exchange. Despite the fact that a trading member may be exempt from submitting monthly capital adequacy returns to the Director: Market Regulation, the trading member is required to advise the Director: Market Regulation, in writing as soon as it becomes aware that it has failed to meet the relevant capital adequacy requirements set out in the IRC Rules.