Authorisations and Approvals_C

Question 1

What are the requirements to perform investment services?

Answer 1

1. An applicant for membership or a member must be authorised to perform trading services in respect of JSE
   authorised investments.
2. An applicant for membership or a member must provide evidence to the satisfaction of the JSE that it has
   employed or will employ adequate resources, procedures and systems necessary for the effective performance
   of investment services and for ensuring compliance with the Act, rules and directives.
3. An authorised ISP must continue to meet these requirements on an on-going basis.

Question 2

Can an authorised ISP conduct transactions on behalf of clients or provide investment advice to clients in JSE
authorised investments, other than equity securities?

Answer 2

1. Yes, only after prior notification, in writing, to the Director: Market Regulation of its intention to conduct
   transactions or provide advice in JSE authorised investments.
2. Notification is not required if the member will be conducting transactions in listed securities on another JSE
   market or another exchange as an authorised user of such market or exchange.

Question 3

What must an ISP do if it ceases to conduct activities in any JSE authorised investment, other than equity securities
with no intention to resume such activities?

Answer 3

Notify the Director: Market Regulation forthwith, in writing, of such cessation of activity.

Question 4

What are the requirements to be authorised to perform custody services?

Answer 4

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 criteria to operate as a CSP, as set out in the directives.
2. An authorised CSP must continue to comply with the criteria on an ongoing basis.
3. If an authorised CSP provides custody services to controlled clients it must establish and maintain a nominee
   company approved by the JSE.

Question 5

What are the requirements to conduct money broking activities?

Answer 5

1. An applicant for membership or a member must provide evidence to the satisfaction of the JSE that it has
   employed or will employ adequate resources, procedures and systems necessary for the effective conduct of
   money broking transactions and for ensuring compliance with the rules relevant to the performance of such
   transactions.
2. A member authorised to conduct money broking transactions must continue to meet these requirements on an
   ongoing basis.

Question 6

A member who operates controlled client accounts is required to establish and maintain a nominee company. What
requirements must be met?

Answer 6

1. The sole objective of the nominee company must be to act as the registered holder of securities exclusively on
   behalf of such member and its controlled clients.
2. The shares in the nominee company must be beneficially owned by and be registered in the name of the
   member.
3. The member must ensure that the nominee company incurs no liabilities other than those normally incurred as a
   result of acting as a nominee in respect of securities.
4. The powers of the nominee company must be limited to the sole objective of the nominee company and any
   other acts necessary to achieve the sole objective.
5. Use of the nominee company must be approved by the JSE on the basis that the member:
   a. is an authorised CSP; or
   b. has appointed a CSP to perform custody services on behalf of the member and has granted authority to that
   CSP to exercise control over the controlled clients’ equity securities held in the name of the nominee
   company.

Question 7

What must a member wishing to effect a change in control of the member do?

Answer 7

Notify the JSE in writing of the change in control and the member may be required to re-apply for membership.

Question 8

How many days written notice must be given by a member to the JSE to voluntarily terminate its membership?

Answer 8

At least 30 days.