Complaints and Disputes Flashcards
What are the criteria for a client complaint to be handled by a member’s internal complaints procedures?
Any client complaint in relation to the provision of regulated services, in which the client alleges that he has suffered, or is likely to suffer, financial prejudice as a result of the member –
1. contravening or failing to comply with any instruction given by the client, or any agreement or mandate entered into with the client;
2. contravening or failing to comply with the rules and the directives;
3. acting dishonestly, negligently or recklessly; or
4. treating the client unfairly
What must a member’s internal complaint handling procedures provide for?
- The RECEIPT of ORAL or WRITTEN complaints.
- The APPROPRIATE INVESTIGATION of complaints.
- An APPROPRIATE DECISION-MAKING process in relation to the response to a client complaint.
- Notification of the decision to the client.
- The RECORDING of complaints.
What must a member’s internal complaint handling procedures be designed to ensure?
- All complaints are handled fairly, effectively and promptly.
- Recurring or systemic problems are identified, investigated and remedied.
- The number of unresolved complaints referred to the JSE are minimised.
- Complaints are investigated by an employee of sufficient competence who, where appropriate, was not directly involved in the matter which is the subject of a complaint.
- The employee responsible for the resolution of complaints has the necessary authority to resolve complaints or has ready access to an employee who has the necessary authority.
- Relevant employees are aware of the member’s internal complaint handling procedures and comply with them.
Within what time must a member respond to a client complaint?
- Within 4 weeks of receiving the complaint. OR
- Within such period, provide the complainant with an appropriate explanation as to why the member is not, at the time, in a position to respond. AND
- Must indicate when the member will respond.
What must a member do in the circumstances where it decides that redress in the form of compensation is appropriate in resolving a complaint?
The member must provide the complainant with fair compensation and must comply with any offer of compensation made by it which the complainant accepts.
What must a member do in the circumstances where it decides that redress in the form other than compensation is appropriate in resolving a complaint?
The member must provide the redress as soon as practicable.
A member must maintain a record of all client complaints.
- What must the record of complaints include? AND
- For how long must the records be maintained?
- The records must include:
a. The identity of the complainant;
b. the substance of the complaints;
c. all correspondence in relation to the complaint. - For a period of 5 years from date of receipt of the complaint.
To whom may a client lodge an unresolved complaint?
The Director: Market Regulation.
In what circumstances will a client complaint be deemed to be unresolved?
The complainant is not satisfied with the resolution of the complaint proposed by the member.
Within what period must a complaint be lodged with the Director: Market Regulation in order for an unresolved complaint to be considered by the JSE Market Regulation Division?
The complaint must be lodged within 4 weeks of the receipt by the complainant of the member’s response and within 6 months of the conduct by the member giving rise to the complaint.
Will an unresolved complaint that is lodged outside prescribed period be considered by the JSE Market Regulation Division?
Yes, provided that failure to lodge the complaint within the relevant period was through no fault of the client.
What action will be taken by the Director: Market Regulation if the If the JSE Market Regulation Division is unable to facilitate a resolution of the complaint within 4 weeks of lodgement of the complaint?
The Director: Market Regulation will refer the unresolved complaint to the Company Secretary of the JSE to be dealt with in terms of the dispute resolution rules.
What is the intention of the dispute resolution rules?
The dispute resolution rules are intended to facilitate the equitable and expeditious settlement of disputes that –
1. a client has with a member, in respect of an unresolved complaint;
2. a member has with another member, in respect of transactions in equity securities; or
3. a member has with a client, in respect of transactions in equity securities.
What are the only circumstances where the dispute resolution rules apply?
- Where the amount in dispute is in excess of R2 000;
- Where the dispute is not the subject of existing litigation;
- In the case of a dispute that a client has with a member, where the amount in dispute either does not exceed R500 000 or, where the amount in dispute exceeds R500 000, if the consent of both parties to proceed has been obtained;
- In the case of a dispute that a member has with another member, if the members are able to evidence to the satisfaction of the Director: Market Regulation that reasonable endeavours have been made by the said members to resolve the dispute, and the consent of both parties to proceed has been obtained;
- In the case of a dispute that a member has with a client, if the consent of the client to proceed has been obtained.
Within what period must a dispute between two members in respect of transactions in equity securities be reported in writing to the Company Secretary and by whom?
The dispute must be reported by either member within 1 week of the circumstance giving rise to the dispute having arisen.
Who will be appointed by the JSE to consider a dispute?
An ombud, who is a retired judge of the High Court of South Africa or a Senior Counsel.
Will the dispute resolution proceedings be conducted with legal representation?
No, unless the ombud in his sole discretion decides otherwise.
In reaching a decision, may an ombud consult with any third party regarding any issue relating to the dispute?
Yes.
Does an ombud have the discretion to call upon any third party to participate in the dispute resolution proceedings?
Yes.
Is an ombud’s decision regarding a dispute final and binding on the party against whom the decision is made?
Yes.
In what circumstances is an ombud not obliged to provide a ruling on a dispute?
If the ombud is of the view that the dispute is of such a complex nature that it cannot be resolved expeditiously by means of the dispute resolution process and can only be properly considered by a court of law.
Within what period must the party against whom the decision is made comply with a decision made by an ombud?
1 week.
What process will the JSE employ if a member against whom an ombud has made an adverse finding is unable to satisfy its obligations, as provided for in the ombud’s decision, within the prescribed period?
- The JSE will consider the reasons for the member’s inability to satisfy the ombud’s decision and may declare the member in default.
- The claimant will be permitted to lodge a claim against the JSE Guarantee Fund for the fulfilment of the member’s obligations in terms of the ombud’s decision.
- The JSE will have a subsequent claim against the member for the amount of the member’s obligations to the claimant, as provided for in the ombud’s decision, which the JSE Guarantee Fund has satisfied.
Who is responsible for the costs of the proceedings and when must payment be made?
The parties to any dispute resolution proceeding are responsible for the costs of the proceedings and may be required to pay to the JSE, before the proceedings commence.
