Financial Markets Control Act, 1989 (Act No. 55 of 1989) 1. Definitions

 

 

In this Act, unless the context otherwise indicates: —

 

"clearing house"

in relation to a financial exchange, means a body corporate or unincorporated association providing services or facilities in respect of the buying and selling of financial instruments on the financial market in question;

 

"court"

in relation to the winding-up or judicial management of a financial exchange, means any division of the Supreme Court of South Africa within whose area of jurisdiction the head office or principal place of business of such exchange is situated;

[Definition of "court" substituted by section 36 of Act 83 of 1992]

 

"executive committee"

in relation to a financial exchange, means the executive authority established in terms of the rules of that exchange to manage the affairs of the exchange;

 

"executive officer"

in relation to a financial exchange, means the person appointed by an executive committee in terms of the rules in question as chief executive officer of that exchange or, in his absence, his deputy or, if there is no such chief executive officer or deputy, such other person as may be appointed by such committee in terms of the rules to perform all the functions which shall or may be performed by the executive officer;

 

"financial exchange"

means an association contemplated in section 7 to which a financial market licence has been issued;

 

"financial instrument"

means: —

(a)        a futures contract;

(b)        an option contract;

(c)        loan stock; or

(d)        any other instrument declared by the Registrar by notice in the Government Gazette to be a financial instrument;

 

"financial instrument principal"

means any person who is a member of a financial exchange, but not a financial instrument trader, and who is authorised in terms of the rules thereof to carry on the business of buying and selling listed financial instruments on his own account;

 

"financial instrument trader"

means any person who is a member of a financial exchange and is authorised in terms of the rules thereof to carry on the business of buying and selling listed financial instruments on behalf of other persons or on his own account;

 

"financial market"

means a market for the carrying on of the business of buying and selling financial instruments, taking place: —

(a)        on an exchange or at any other place; or

(b)        by means of any system or facility;

[Definition of “financial market” amended by section 1(a) of Act 73 of 1996]

 

"financial market licence"

means a licence issued in terms of section 9 to carry on the business of a financial market;

 

"futures contract"

means a standardised contract the effect of which is that: —

(a)        a person agrees to deliver to or receive from another person a certain quantity of corporeal or incorporeal things on a future date at a prearranged price; or

[Definition of "futures contract" substituted by section 1(a) of Act 55 of 1995]

 

“interdealer broker”

means a participant in a financial market who facilitates transactions in listed financial instruments between members;

[Definition of “interdealer broker” inserted by section 1(b) of Act 73 of 1996]

 

"listed financial instruments"

means financial instruments included in the list of financial instruments kept by an executive committee in terms of section 14;

 

"loan stock"

means an instrument creating or acknowledging indebtedness, issued by: —

(a)        the Government of the Republic of South Africa;

(b)        a local government body contemplated in the Local Government Transition Act, 1993 (Act No. 209 of 1993), or a provincial government;

(c)        Eskom;

(d)        the Rand Water Board;

(e)        the Land and Agricultural Bank of South Africa;

(f)        the Industrial Development Corporation of South Africa, Limited; or

(g)        any other institution designated by the Registrar by notice in the Gazette,

but excluding any such instrument specified from time to time by the Registrar by notice in the Gazette;

[Definition of “loan stock” amended by section 1(c) of Act 73 of 1996]

 

"member"

in relation to a financial exchange, means any person who is a financial instrument trader or financial instrument principal;

 

"Minister"

means the Minister of Finance;

 

"option contract"

means a standardised contract the effect of which is that a person acquires the option

(a)        to buy from or sell to another person a certain quantity of corporeal or incorporeal things before or on a future date at a pre-arranged price; or

(b)        that an amount of money will be paid to or received from another person before or on a future date according to whether the pre-arranged value or price of an asset, index as referred to in the definition of "securities" in section 1 of the Stock Exchanges Control Act, 1985 (Act No.1 of 1985), currency, rate of interest or any other factor is higher or lower before or on that future date than the pre-arranged value or price;

[Definition of "option contract" substituted by section 23(b) of Act 54 of 1991]

 

"person"

includes a partnership;

[Definition of "person" inserted by section 1(b) of Act 55 of 1995]

 

"prescribed"

means prescribed by regulation;

 

"recognised clearing house"

in relation to a financial exchange, means a clearing house recognised for the purposes of this Act by the Registrar;

 

"record"

includes any register, recording of information, account, accounting record, tape-recording or computer print-out as defined in section 1 of the Computer Evidence Act, 1983 (Act No. 57 of 1983);

 

"Registrar"

means the Registrar or the Deputy Registrar of Financial Markets mentioned in section 2;

[Definition of "Registrar" substituted by section 29 of Act 97 of 1990]

 

"regulation"

means a regulation made under section 37;

 

"rules"

in relation to a financial exchange, means rules of that exchange referred to in section 17;

 

"standardised contract"

means a contract that complies with the formal requirements applying on a financial market to a contract of the kind in question and in respect of which dealings take place on that market;

 

"stock exchange"

means a stock exchange as defined in section 1 of the Stock Exchanges Control Act, 1985 (Act No. 1 of 1985);

 

"this Act"

includes the regulations; and

 

"unsolicited call"

in relation to entering into an agreement in respect of listed financial instruments, means a personal visit made to someone or an oral communication made to someone without an express or tacit invitation from such person, but excluding any personal visit or oral communication made to someone on whose behalf the business of buying and selling of listed financial instruments has previously been carried on by the person who made that personal visit or oral communication, a stock-broker as defined in section 1 of the Stock Exchanges Control Act, 1985 (Act No. 1 of 1985), a member of a financial exchange, or a financial institution referred to in paragraph (a), (b), (c), (d), (e), (f) or (h) of the definition of "financial institution" in section 1 of the Financial Institutions (Investment of Funds) Act, 1984 (Act No. 39 of 1984).

[Definition of "unsolicited call" substituted by section 4 of Act 22 of 1997]