General Membership Requirements PDF

**General Membership Requirements** In order to qualify to be a trading member, an applicant must comply with the requirements set out in this rule and such other requirements as the JSE may determine. The JSE keeps a register of all trading members indicating in which category or sub-category of a...

**General Membership Requirements** In order to qualify to be a trading member, an applicant must comply with the requirements set out in this rule and such other requirements as the JSE may determine. The JSE keeps a register of all trading members indicating in which category or sub-category of authorised user the trading member has been authorised to operate. ### Categories of membership A trading member may only enter into a clearing agreement with one clearing member to perform the clearing and settlement of the transactions of that trading member. A trading member -- - may be a clearing member; and - may trade for and on behalf of clients. An "inter-dealer broker" (IDB) - - is a sub-category of trading member that is subject to the rules pertaining to IDBs; and - may not be a clearing member. In authorising an IRC trading member to provide securities services, the JSE may impose restrictions or conditions on the IRC trading member in relation to the particular securities services that the IRC trading member is authorised to provide or the particular IRC securities for which the IRC trading member is authorised to provide securities services, or both. ### Specific Requirements Applicable to Inter-Dealer Brokers (IDB) A trading member authorised to operate as an IDB must meet the following requirements in order to maintain its status as an IDB- - Its business activities in the JSE listed bonds must be limited to arranging transactions between two counterparties on a name give-up basis or trading with or on behalf of two other parties on a matched principal basis; - When transacting in bonds with or on behalf of other trading members or clients on a matched principal basis, it may not take a proprietary position against the other trading member or the client; and - It must, on request from any trading member with or on whose behalf it is going to trade in bonds as a matched principal, provide the list of clients who may be the opposite counterparties to such transactions. ### Capital Adequacy Requirements Trading member shall at all times have own funds equal to the greater of -- - the initial capital referred to in rule 3.40.6 or 3.40.7 as the case may be; or - thirteen weeks fixed operating costs; plus - the position risk requirement; and - the counterparty risk requirement; and - the large exposure risk requirement; and - the foreign exchange risk requirement; such that the following formula is satisfied -- and The following provisions shall apply to a trading member that is an external company, other than a branch of a foreign bank -- - they own funds of the local branch of the external company shall at all times be equal to or greater than the amount provided for; - the foreign parent of the local branch of the external company shall in writing confirm to the JSE that it is required to comply with capital adequacy requirements similar to those in the Republic, and that they are reporting such as required to an appropriate foreign regulator; and - the thirteen weeks fixed operating costs requirement shall relate to the operating costs of the local branch of the external company in the Republic. A trading member that is a branch of a foreign bank and is exempt from the requirement to submit monthly capital adequacy returns to the Director: Market Regulation, is not required to comply with the requirements of IRC Rules but is instead required to comply with the capital adequacy requirements as prescribed by the Banks Act, 1990 (Act No. 94 of 1990) and the regulations made under that Act. A trading member that does not trade in bonds and that trades in derivative instruments listed on the JSE solely for its own account, and is exempt from the requirement to submit monthly capital adequacy returns to the Director: Market Regulation, is not required to comply with the requirements of the IRC Rules but shall ensure that its assets (excluding goodwill and other intangible assets) exceed its liabilities (excluding loans validly subordinated in favour of all other creditors). A trading member that is an authorised user of another exchange and is exempt from the requirement to submit monthly capital adequacy returns to the Director: Market Regulation is not required to comply with the requirements of IRC Rules but shall comply with the capital adequacy requirements as prescribed by such other exchange. A trading member who trades on behalf of clients but does not receive a client\'s margins or hold the client\'s margins or who does not receive any other assets of a client with respect to the client\'s buying and selling of JSE authorised investments, shall have an initial capital of at least R200 000 or such other minimum amount that the JSE may decide. A trading member who receives a client\'s margins or holds the clients\' margins, or that receives any other assets of a client with respect to the client\'s buying and selling of JSE authorised investments, shall have an initial capital of at least R400 000, or such other minimum amount that the JSE may decide. The JSE may *suspend a trading member if there is a deficiency in the capital adequacy* of the trading member. ### Voluntary Changes to, or Termination of, Membership +-----------------------------------+-----------------------------------+ | Changes to membership | Termination of membership | +===================================+===================================+ | If a trading member wishes to | A trading member may apply to | | change its authorised user status | terminate its membership by | | or wishes to obtain authorisation | giving 30 days written notice to | | to operate in another | the JSE. | | sub-category of authorised user, | | | shall apply mutatis mutandis. | | +-----------------------------------+-----------------------------------+ | A trading member undergoing any | The Membership Committee may | | of the changes in name or | accept the termination | | corporate structure as set out | unconditionally or subject to | | below shall forthwith inform the | such conditions as it may deem | | JSE in writing of the change -- | fit or may refuse to accept the | | | termination until it is satisfied | | - in the case of a company | that all outstanding contractual | | changing its name, the | or other obligations of the | | notification shall be | trading member have been met. | | accompanied by the relevant | | | certificate of name change; | | | | | | - in the event that a trading | | | member\'s business or | | | infrastructure relating to | | | trading in IRC securities, is | | | transferred to another legal | | | entity in any manner, | | | including but not limited to | | | a merger, take-over, transfer | | | of business or corporate | | | restructuring, the trading | | | member shall inform the JSE | | | of the change at least one | | | month before it takes effect, | | | and the notification shall be | | | accompanied by such | | | information as would be | | | required in the case of a new | | | application for membership | | | provided that the JSE may, at | | | its discretion, request full | | | particulars regarding the | | | change and the reasons | | | therefore, and provided | | | further that the JSE may | | | determine that a new | | | application for membership | | | must be made. | | +-----------------------------------+-----------------------------------+ The **JSE shall notify trading members** of the **termination** of or **change in membership**, and the termination shall become effective on the date and time of the notice, unless stated otherwise in the notice. Fees, levies, and charges - A trading member which uses the services of the JSE shall pay to the JSE such subscription fees and charges as may be prescribed by the JSE. - The JSE may, in addition to the subscriptions, fees and charges prescribed by these rules, impose upon every trading member a levy which shall be paid to the JSE or any of its Compensation Funds on such conditions as the JSE may decide. Such levy may be recovered from the clients of the trading member. - Any subscription, fee, charge, contribution, or levy to be paid or which may be imposed in terms of these rules, shall be paid as determined by the JSE and any trading member failing to make such payment when due shall, unless the same be paid within one month after written demand has been made by the JSE, cease to be a trading member. ### Notice to the JSE by trading members Every trading member shall notify the JSE of a business and postal address, and a secured electronic delivery mechanism address at which that trading member shall accept the delivery of all notices issued by the JSE in terms of these rules.