Securities Services Act, 2004 (Act No. 36 of 2004) - REPEALED > Chapter III : Exchanges > Exchange rules > 18. Requirements with which exchange rules must comply

(1)	The exchange rules must be consistent with this Act.

(2)	The exchange rules must provide—

(a)	for the criteria for authorisation and exclusion of authorised users and, in particular, that no person may be admitted as an authorised user or allowed to continue such person's business as an authorised user unless the person—

(i)	is of good character and high business integrity or, in the case of a corporate body, is managed by persons who are of good character and high business integrity; and

(ii)	complies or, in the case of a corporate body, is managed by persons or employs persons who comply with the standards of training, experience and other qualifications required by the exchange rules;

(b)

(i)	for the capital adequacy, guarantee and risk management requirements with which an authorised user must comply;

(ii)	that capital adequacy, guarantee and risk management requirements must be prudent although they may differ in respect of different categories of authorised users or different activities of an authorised user's business;

(c)	if there are different categories of authorised users, for the restriction of the activities of such categories subject to different conditions;

(d)	for an efficient, honest, transparent and fair manner in which and terms and conditions subject to which transactions in listed securities must be effected by authorised users, whether for own account or on behalf of other persons;

(e)	for the manner in which transactions in listed securities must be cleared and settled;

(f)	for the clearing and settlement of transactions if the exchange has not appointed a licensed clearing house, in compliance with requirements prescribed by the registrar under section 65(1)(b);

(g)	for the circumstances in which a buyer or seller of listed securities may repudiate the transaction;

(h)	for the regulation of transactions in listed securities entered into as a result of any first communication made to a person without an express or tacit invitation from such person;

(i)	for the circumstances in which a transaction in listed 'securities may be declared void by the exchange;

(j)	for the conditions subject to which an authorised user may undertake management of listed securities for remuneration or benefit in any form;

(k)	that no authorised user may effect a transaction in securities with a person whom the authorised user believes or suspects requires approval to undertake management of securities in terms of any law without having taken reasonable measures to ascertain that such person has the necessary approval;

(l)	for the approval by the exchange of a nominee of an authorised user which nominee holds securities in a securities repository or central securities repository as defined in Chapter IV;

(m)	for surveillance of any matter relevant for the purposes of this Act, the exchange rules and the directives;

(n)

for the conditions subject to which an officer or employee of an authorized user may, in relation to the buying and selling of listed securities, advise on or conclude any transaction on behalf of an authorised user in the course of that authorised user’s business and for the circumstances in which an officer or employee of an authorised user may be denied access to the exchange;

(o)	for the circumstances in which trading in any listed security may be suspended or halted;

(p)	for the manner in which an authorised user is required to conduct the business of buying and selling listed securities generally;

(q)	for the operation by an exchange or authorised user of a trust account contemplated in section 27;

(r)

for the—

(i)	recording of transactions effected through the exchange;

(ii)	monitoring of compliance by authorised users with this Act, the exchange rules and the directives; and

(iii)

surveillance of any matter relevant for the purposes of this Act, the exchange rules and the directives;

(s)	for the circumstances and manner in which an authorised user may advertise or canvass for business;

(t)	for the equitable and expeditious settlement of disputes between authorized users and between authorised users and clients in respect of transactions in listed securities;

(u)	for the manner in which complaints against an authorised user or officer or employee of an authorised user must be investigated;

(v)

for the steps to be taken by the exchange, or a person to whom the exchange has delegated its investigative and disciplinary functions, to investigate and discipline an authorised user or officer or employee of an authorised user who contravenes or fails to comply with this Act, the exchange rules, the interim exchange rules or the directives and for a report on the disciplinary proceedings to be furnished to the registrar within 30 days after the completion of such proceedings;

(w)	for the manner in which an authorised user, officer or employee of an authorised user who is believed to—

(i)	be able to furnish any information on the subject of any investigation referred to in paragraphs (u) and (v); or

(ii)	have in such person’s possession or under such person’s control any document which has bearing upon that subject,

may be required to appear before a person conducting an investigation, to be interrogated or to produce such document;

(x)	in respect of the insurance, guarantee, compensation fund or other warranty referred to in section 16, for-

(i)	the persons who must contribute to maintain such insurance, guarantee, compensation fund or other warranty;

(ii)	the amount of the levy imposed by the exchange for this purpose;

(iii)

different categories of claims that may be brought against the insurance, guarantee, compensation fund or other warranty;

(iv)	restrictions on the amount of any claim;

(v)	the control and administration of the insurance, guarantee, compensation fund or other warranty;

(vi)	the ownership of the insurance, guarantee, compensation fund or other warranty;

(y)	that authorised users must disclose to clients the fees for their services;

(z)	that authorised users may charge a fee for different categories of transactions;

(aa)	for the purposes for which an exchange may issue directives;

(bb)	for the supervision by an exchange of compliance with the duties imposed on it and its authorised users by the Financial Intelligence Centre Act, 2001 (Act No. 38 of 2001).

(3)	An exchange may, with the approval of the registrar, make exchange rules on matters additional to those listed in subsection (2).

(4)	An exchange rule made under this section is binding on an exchange, an authorised user, an issuer and their officers and employees, and on clients.