Client Assets_E

Question 1

What is a TSP who appoints a CSP required to ensure regarding the processing of receipts and payments on the TSP’s:
- Current banking account.
- Settlement banking account.
- Non-resident banking account and
- Trust account?

Answer 1

That the CSP has the necessary authority to process receipts and payments.

Question 2

What is a TSP who appoints a CSP required to do regarding the TSP’s security transfer stamp?

Answer 2

Grant authority to the CSP to utilise the stamp together with an authorised signatory of the CSP for use on transfer
forms and other similar documents.

Question 3

What is a TSP who appoints a CSP required to ensure regarding custody accounts?

Answer 3

1. That an account in the name of a nominee company owned by the TSP be opened at the TSP’s CSDP.
2. That the CSDP will only accept instructions, other than settlement instructions, from the CSP.
3. The member shall not be permitted to open an account in its own name.

Question 4

In the event of either a TSP or CSP becoming aware of any irregular behaviour relating to the operation of client
accounts the TSP or its CSP should promptly advise the other party of such behaviour. Itemise 5 types of irregular
behaviour mentioned in Directive FL 7.

Answer 4

1. Issuing of fraudulent instructions.
2. Provision of false information.
3. Presentation of forged, fraudulent or stolen documents of title or instruments of payment.
4. Fraudulent electronic transfers of funds or securities to the TSP or its CSP.
5. The theft of clients’ securities or funds.

Question 5

Following the discovery of any loss or occurrence likely to give rise to a loss to the TSP and/or its clients which may be
covered in terms of the “in and out” fidelity policy and which may have occurred in the operations of the CSP, what is
the member who discovered the loss or occurrence required to do?

Answer 5

1. Promptly advise the other party (TSP or CSP).
2. Both parties to consider whether they may have suffered any actual or potential loss or incurred an actual or
   potential liability to a 3rd party and if so;
3. Promptly give notice in writing of the discovery to the insurance brokers acting for the JSE.

Question 6

Prior to terminating an arrangement with a CSP, what is a TSP required to do?

Answer 6

Obtain the consent of the JSE.