Management And Control Flashcards
Define “employee”
An individual engaged by a member whose function relates to the PROVISION of REGULATED SERVICES
Settlement officer
An employee of a member APPOINTED BY THAT MEMBER IN TERMS OF THE RULES to MANAGE the MEMBER’S OBLIGATIONS in relation to the settlement of transactions in equity securities effected by that member.
Alternate settlement officer
An employee of either a member or a CSP appointed by such member, fulfilling the function of the settlement officer in the settlement officer’s absence
Compliance officer?
The person appointed by a member in terms of the rules to ASSIST THE BOARD OF DIRECTORS of the member in ensuring compliance by the member with the Act, rules and directives
Define “officer” in relation to a member?
Includes any executive director, compliance officer, settlement officer or alternate settlement officer thereof
An officer of non-exec Director of a member or shareholder who is a natural person and who directly or indirectly holds in >10% of issued shares of a member must meet certain criteria. What are they?
- Be of full legal capacity
- Not be an unrehabilitated insolvent.
- Comply with such criteria of good character and high business integrity as the JSE deems fit.
What criteria will be taken into account by the JSE in determining who meets the good character and high business integrity?
whether the person has been :
1. Convicted of a criminal offence involving fraud or theft, dishonesty or market abuse.
2. Held civilly liable for fraud, theft, dishonesty or market abuse.
3. declared to have contravened legislation in respect of market abuse, money laundering or terrorist or related
activity, with or without the imposition of an administrative penalty, whether in the Republic or elsewhere.
4. Disqualified by a court from acting as a director of a company.
5. The subject of a formal investigation by any regulatory or government agency.
6. Expelled, whether as an authorised user or otherwise, from any exchange or external exchange.
7. Employed by or associated with an authorised user of any exchange or external exchange, which authorised user
was expelled from that exchange and where the person has, in the opinion of the JSE, contributed to the
circumstances leading to the expulsion.
8. Declared a defaulter on the JSE or any other exchange or external exchange.
9. Refused entry to or expelled from any profession or vocation or been dismissed or requested to resign from any
office or employment, or from any fiduciary office or similar position of trust.
10. Refused approval or had approval involuntarily withdrawn in respect of any status granted by a regulatory
authority.
Which employees need the member to get written approval from the JSE for a member to hire them?
- Any person who was an officer of a member EXPELLED by the JSE
- Any person REFUSED ADMISSION as a member of the SAIS or any person EXPELLED FROM MEMBERSHIP of the SAIS.
- Any person REFUSED APPROVAL TO OPERATE as a financial services provider (FSP) or an authorised representative in terms of the FAIS Act.
- Any person EXPELLED, whether as an authorised user or otherwise, FROM ANY OTHER EXCHANGE.
- Any person who is an UNREHABILITATED INSOLVENT or has been declared a defaulter by the JSE or has been convicted of THEFT, FRAUD, FORGERY, or any other crime involving dishonesty
Which exam is a compliance officer required to have passed?
And what evidence must the member give the Director: Market Regulation if called to do so?
- The compliance officer examination prescribed by the JSE
- That he’s subsequently maintained an adequate knowledge of the Act, rules and directives
What are the prescribed duties of a Compliance Officer?
- To assist the Board of Directors in ensuring compliance with the A,R, and D
- W/ the necessary support and guidance implement the resources, systems and procedures required to promote and monitor compliance by the member and its employees with the A, R and D.
- Report to the Director: Market Regulation any breaches by the member of the A, R & D or any other issue considered by the compliance officer to be irregular
- Ensure that the content of the JSE gazettes is communicated to and understood by all relevant employees.
Who assumes the duty of compliance officer in his absence? And for how long?
- A senior employee
- For no longer than 2 months or such other period as the Director: Market Regulation may approve
Which exam is a settlement officer or alternate settlement office meant to have passed?
- The settlement officer examination prescribed by the JSE
- Ensure that he has subsequently maintained an adequate knowledge of the JSE settlement rules
Duties of a settlement officer? (5)
- To manage the equity securities settlement obligations of a member
- Deal with all queries related to settlement.
- Ensure that appropriate procedures are implemented and the necessary action is taken to FACILITATE THE SETTLEMENT OF ALL TRANSACTIONS IN EQUITY SECURITIES in accordance with the rules and directives
- Advise the JSE of any issue that may potentially affect the settlement of a transaction.
- Cooperate with the Settlement Authority to ensure the efficient and timeous settlement of all transactions
What results in immediate disqualification of a person’s fit and proper status?
- Dishonesty or;
- A deliberate omission in an application to the JSE.
Can a member conduct its business in the absence of a duly appointed settlement officer or alternate settlement officer?
No, except where the Settlement Authority may otherwise direct.
Which employees of a member may exercise discretion in the management of equity securities and JSE authorised investments not traded on a JSE market…?
- A stockbroker
- A person who has been exempted from or passed the following registered persons examinations of the SAIFM:
a. An intro to financial markets;
b. Regulation and ethics of the South African financial markets; and
c. The equity market - A person who has qualified as a Regular Member of the Charted Financial Analyst Institute
- A person who’s passed the Investment Advice and Portfolio Management module of the SAIS exam and has passed the Regulation and Ethics of South African Financial Markets module of the SAIFM
- A person accustomed to giving investment advice on transactions since prior to 1 December 2000 and has continued to give investment advice since such date
What should a person do if they stopped managing investments or providing investment advice for more than 3 years but wish to recommence?
Pass one of the examinations which qualify a person to manage investments or advise on transactions
Which persons, who are resident in the area where the place of business is located, must be in control of these offices?
1. Primary place of business
2. Branch office
3. Agency office
- Stockbroker who must be an executive director of the member
- Stockbroker in the full-time employ of the member.
- A stockbroker or an employee of a member who has obtained a pass in the compliance officer examination
Who must be in control of the primary place of business and branch offices of a CSP which isn’t authorised to trade?
A stockbroker or a person who has passed the compliance officer examination
What should a member do to effectively conduct its business?
Employ necessary resources, procedures and technological systems.
To whom must a member describe and demonstrate the OBJECTIVES AND OPERATION OF ITS INTERNAL CONTROL and risk management?
To the member’s auditor and to the JSE
