Big Mark Questions Flashcards
What are the requirements to be admitted as a member and to remain a member?
Must
1. Be incorporated and registered as a domestic company under the Companies Act
FIT AND PROPER REQUIREMENTS
2. Appoint only EXECUTIVE AND NON-EXECUTIVE DIRECTORS who comply with fit and proper requirements
3. ENSURE a shareholder who is a natural person and who DIRECTLY OR INDIRECTLY holds in EXCESS OF 10% of the ISSUED SHARES of the APPLICANT or MEMBER complies with the fit and proper requirements
4. Appoint a COMPLIANCE OFFICE who complies with the fit and proper requirements
5. Appoint a SETTLEMENT OFFICER and an ALTERNATE SETTLEMENT OFFICER who comply with the fit and proper requirements
6. Appoint a CSDP, unless it only performs, or intends to perform, CUSTODY SERVICES and it doesn’t require a CSDP in order to perform such services
7. Meet the SPECIFIC CONDITIONS OF MEMBERSHIP relating to:
a) resources, procedures and systems
b) business activities and;
c) financial resources
Requirements to be met by a member who’s established and maintains a nominee company?
- The SOLE OBJECTIVE for the nominee company must be to ACT AS THE REGISTERED HOLDER of SECURITIES EXCLUSIVELY on behalf of SUCH member and its controlled clients.
- the shares in the nominee company MUST BE BENEFICIALLY OWNED by and registered in the name of the member
- 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
- 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.
- Use of nominee company MUST BE APPROVED BY THE JSE on the basis that the member:
a) is an authorised CSP
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.
Information that must furnished to the JSE in writing by a member I.r.o its membership status?
- Any change of NAME, ADDRESS OF ANY OFFICE, TELEPHONE, FACSIMILE NUMBER OR EMAIL ADDRESS
- Any change in the APPOINTMENT OF A COMPLIANCE OFFICER, SETTLEMENT OFFICER or an ALTERNATE SETTLEMENT OFFICER
- Any change in the APPOINTMENT OF A PERSON IN CONTROL OF A PLACE OF BUSINESS
- Any change in THE NAME OF A NOMINEE COMPANY
- Any CIRCUMSTANCES relating to the liquidation or placement under judicial management of the member
- Any CIRCUMSTANCE OR EVENT which may affect an officer or shareholder (who directly or indirectly holds 10% of issued shares) meeting the fit and proper requirements
- Any person BECOMING OR CEASING TO BE A DIRECTOR OF A MEMBER
- any person CEASING TO BE A REGISTERED SECURITIES TRADER of a member
- GRANTING OF AN APPLICATION FOR, or revocation of, any REGISTRATION, AUTHORISATION, OR LICENCE associated with its business as a member of the JSE
- The prosecution or co NC I took of the member for any OFFENCE UNDER LEGISLATION RELATING TO BANKING, OTHER FINANCIAL SERVICES, COMPANIES, INSOLVENCY, INSURANCE and PENSION and PROVIDENT SOCIETIES or any offence involving fraud and dishonesty
- The DISMISSAL of an employee for committing or attempting to commit an act which is dshonest or fraudulent
What must the system of internal control employed by a member ensure?
THAT:
1. the relevant business can be carried on in an ORDERLY and EFFICIENT MANNER.
2. Financial and other info provided or used by the member is reliable.
3. All transactions and financial commitments entered into are recorded and ARE WITHIN THE SCOPE OF AUTHORITY of the member or the employee acting on behalf of the member
4. There are procedures to SAFEGUARD THE ASSETS of the member and assets belonging to any other person for which the member is accountable and to control liabilities.
5. There are measures to MINIMISE THE RISK OF LOSS to the member or to clients of the member which may RESULT FROM ANY IRREGULARITY, FRAUD OR ERROR and to detect any irregularities, fraud or error should they occur SO THAT PROMPT REMEDIAL ACTION may be taken by the member or the management of the member.
What are the regulatory objectives in the establishment of risk management principles and procedures?
Ensure that the records of a member are maintained in such a manner as to PROMPTLY DISCLOSE FINANCIAL AND BUSINESS INFORMATION that will enable the member or management of the member to:
1. IDENTIFY, QUANTIFY, CONTROL and MANAGE the risk exposures of the member.
2. Make TIMELY and INFORMED business decisions.
3. MONITOR THE PERFORMANCE and all aspects of the business of the member.
4. Monitor the CAPITAL of the member TO ENSURE COMPLIANCE WITH THE CAPAD requirements imposed by the rules.
5. Monitor the quality of the MEMBER’S ASSETS
