Trading_F

Question 1

If an order submitted to the JSE equities trading system by a registered securities trader was not received or initiated
by that registered securities trader but was instead received or initiated by another employee of the member, such as
a sales trader or a portfolio manager, what must the member ensure that it records?

Answer 1

The identity of the other employee who received or initiated the order.

Question 2

Trade Cancellations
What is a TSP seeking permission for a cancellation of an on book trade required to do?

Answer 2

Immediately upon becoming aware of the erroneous trade, request permission from the Director: Market Regulation
to cancel the trade by informing him of the original trade, giving details of such trade and the circumstances or reason
which resulted in the original trade.

Question 3

Having been granted permission to enter into a trade cancellation, within what time must the designated TSP enter
the trade into the JSE equities trading system?

Answer 3

Without delay.

Question 4

What is a TSP who is unable to submit a trade cancellation to the JSE equities trading system on the same day as the
erroneous on book trade, required to do?

Answer 4

The TSP must submit the trade cancellation as a next day cancellation of an on book trade without delay on the
following business day.

Question 5

What is the administration fee payable by a TSP if it requests permission to cancel an on book trade if such request
fails to meet the prescribed criteria?

Answer 5

R2000.

Question 6

How much is the administration fee for an executed trade cancellation of an on book trade and who is liable to pay it?
Who must be compensated for any damage suffered due to loss of price/time priority?

Answer 6

1. R10 000.
2. The TSP responsible for the error.
3. The opposite TSP who in turn must compensate its client.

Question 7

In managing orders received from clients and submitting client and proprietary account orders to the JSE trading
system what objectives is a TSP required to meet in addition to other requirements in the rules and directives?

Answer 7

1. AVOIDANCE OF ERRONEOUS ORDERS
   The TSP must implement appropriate procedures to ensure that orders are not submitted to the JSE equities
   system or left open in the JSE equities trading system where such orders could result in erroneous trades.
2. SETTLEMENT ASSURANCE
   The TSP must implement appropriate procedures to ensure, prior to submitting a client or proprietary order to
   the JSE equities trading system, that it has the capacity to settle trades resulting from such orders on the
   settlement date, and that all such trades will not adversely affect the TSP’s ability to meet its financial resources
   requirements as set out in the rules and directives.

Question 8

What is an OEA?

Answer 8

An order entry application.

Question 9

What is DMA?

Answer 9

Direct market access.

Question 10

Whose written approval does a TSP require to operate an OEA that provides DMA?

Answer 10

The JSE.

Question 11

What are the key objectives that a member must be able to demonstrate, to the satisfaction of the JSE, when applying
to operate an OEA that provides DMA?

Answer 11

1. Avoidance of erroneous orders and manipulative practices.
2. Management of order limits and order types
3. Settlement Assurance
4. Adherence to trading phases
5. Maintenance of audit trails
6. Adherence to the rules and directives
7. Adherence to security and technical requirements