Authorisations and Approvals_B

Question 1

What are the minimum conditions relating to resources, procedures and systems which an applicant for membership
and a member are required to satisfy in order to be granted and to retain membership and to be authorised to
perform regulated services?

Answer 1

1. A member must employ adequate resources, procedures and systems necessary for the effective performance of
   the regulated service which the member provides and for ensuring compliance with the Act and the rules and
   directives that are relevant to the performance of such regulated services and ensuring compliance with the
   Financial Intelligence Centre Act.
2. A member must ensure that its employees are suitable, adequately trained and properly supervised

Question 2

What must the dominant business activity of a member be and what may be included in the scope of a member’s
business activities?

Answer 2

1. The dominant business activity of a member must be the performance of regulated services in respect of JSE
   authorised investments.
2. The scope of a member’s business activities may also include the management of investments or provision of
   advice in relation to other financial products, subject to the member having been granted the appropriate licence
   to conduct such activity in terms of the FAIS Act.

Question 3

In what circumstances will activities not related to regulated services or services provided in terms of the FAIS Act be
deemed to be part of the business activities of a member?

Answer 3

Any activities which are a regular feature of the member’s business and are held out by the member, in any
communication with any person, to be part of the business activities of that member, will be deemed to be part of the
business activities of that member.

Question 4

What are the minimum conditions relating to financial resources which an applicant for membership and a member
are required to satisfy in order to be granted and to retain membership to be authorised to perform regulated
services?

Answer 4

1. A member must on admittance and at all times ensure that it maintains adequate financial resources to meet its
   business commitments and to withstand the risks to which its business is subject.
2. A member must on admittance and at all times thereafter hold adjusted liquid capital which complies with
   minimum requirements calculated in accordance with directive DC 2, sufficient to meet its base requirement and
   its risk requirement.
3. The base requirement of a member is the higher of :
   a. an amount determined in accordance with the directives as being adequate to meet a member’s fixed
   expenditure for a period of 13 weeks; or
   b. R400 000.
4. The risk requirement of a member is the sum of its position, counterparty, foreign exchange, custody and large
   exposure requirements determined in accordance with the directives.

Question 5

Which intermediary services are members not permitted to provide?

Answer 5

1. Collecting or accounting for premiums or other monies payable by a client to a product supplier.
2. Receiving, submitting or processing the claims of a client against a product supplier in respect of :
   a. a long or short-term insurance contract or policy;
   b. a benefit provided by a pension fund organisation;
   c. a benefit provided by friendly society or
   d. a health service benefit provided by a medical scheme.

Question 6

What are the requirements to perform trading services?

Answer 6

1. An applicant for membership or a member must provide evidence to the satisfaction of the JSE that it is able to
   comply with the operational requirements set out in the directives.
2. An authorised TSP must continue to comply with the operational requirements on an on-going basis.
3. TSP with controlled clients must be authorised to perform custody services or must appoint a CSP and must
   establish and maintain a nominee company.