CHAPTER 7
OFF-EXCHANGE TRADE
VALIDATION
AND REPORTING SYSTEM
General
7.00.00 Transactions
in securities which have been admitted to trading on the Exchange may be
effected off-exchange.
7.00.01 The
following bye-laws in respect of off-exchange transactions in securities which
have been admitted to trading on the Exchange do not apply to credit operation
transactions; transactions in units or shares of Collective Investment Schemes which
have not been admitted to trading on the Exchange or to other off-market
transactions as specifically mentioned in the Bye-laws.
7.00.02 All
transactions effected in terms of bye-law 7.00.01 above must be entered into
the Exchange’s Off-Exchange Trade Validation and Reporting System as described
hereunder in order for such trades to be confirmed and the appropriate registration
effected in the Central Securities Depository.
7.00.03 The opening and closing times of the
Off-Exchange Trade Validation and Reporting System are established by the
Exchange. The Exchange may, in its absolute discretion, vary such opening and
closing times of the Off-Exchange Trade Validation and Reporting System.
7.00.04 No
off-exchange transactions may be entered into the Off-Exchange Trade Validation
and Reporting System prior to the opening signal or after the closing signal.
(i)
Authorised
Intermediaries as defined in the Off-Exchange Trading Regulations, 2004;
(ii)
indicated
Exchange personnel; and
(iii)
any
other person duly authorised by the Exchange.
Participation in
Off-Exchange Trade Validation and Reporting System
7.02.00 Authorised Intermediaries shall be
considered to be participants in the Off-Exchange Trade Validation Reporting
System.
7.02.01 Authorised
Intermediaries may opt for direct or indirect access to the Off-Exchange Trade
Validation and Reporting System as outlined in bye-laws 7.03.00 and 7.04.00
hereunder. Authorised Intermediaries who do not opt for direct participation
shall automatically be considered as indirect participants.
7.02.02 Authorised
Intermediaries opting for direct participation shall submit an application form
to the General Manager as set out in Appendix
I to this Chapter. Indirect
participants wishing to have access (indirect) to the Off-Exchange Trade
Validation and Reporting System must submit a Registration Form as appropriate
to the General Manager as set out in Appendix II to this Chapter. Such
application/registration forms shall be accompanied by the applicable fees as
laid down by the Exchange from time to time.
7.02.03 Any
changes to be effected to the details given in the application/registration
form at the time of application for direct participation in or indirect access
to the Off-Exchange Trade Validation and Reporting System must be submitted to
the Exchange prior to such changes becoming effective.
7.02.04 All
applicants for direct participation in the Off-Exchange Trade Validation and
Reporting System must undergo the requisite training prior to access being granted.
7.02.05 Such
training will be the sole responsibility of the Exchange and will vary
according to the type of applicant and level of participation applied for.
Direct
Participation
7.03.00 Authorised Intermediaries opting for
direct participation shall be designated Direct Participants. Direct
Participants shall have direct access to the Off-Exchange Trade Validation and
Reporting System either through reporting terminals set up in their office/s or
alternatively through reporting terminals made available at the Exchange for
such purpose. Direct Participants must nominate one or more person/s who shall
be nominated to access the Off-Exchange Trade Validation and Reporting System (Reporters)
on their behalf.
Indirect
Participation
7.04.00 Authorised Intermediaries who do not opt
for direct participation shall be designated Indirect Participants. Prior to obtaining
indirect access to the Of-Exchange Trade Validation and Reporting System,
Indirect Participants shall first register with the Exchange in the manner
detailed in bye-law 7.02.02 above. Registered Indirect Participants may access
the Off-Exchange Trade Validation and Reporting System through one or more Direct Participants so
designated on the appropriate registration form as set out in Appendix II to this Chapter.
Voluntary Termination of Access
7.05.00 Authorised
Intermediaries wishing to terminate their access to the Off-Exchange Trade
Validation and Reporting System shall do so in writing to the Council. A Notice
shall be posted forthwith on the Notice Board of the Exchange and shall remain
so posted for a period of one (1) calendar month from the date of notification.
7.05.01 The
Authorised Intermediary so wishing to terminate his access to the Off-Exchange
Trade Validation and Reporting System shall, within the period of notification
as stipulated above advise the Exchange of any outstanding obligations, debts
or commitments of the Authorised Intermediary intending to terminate his access
and of any outstanding dealings and transactions in which such Authorised
Intermediary may be concerned in connection with his activities on the
Off-Exchange Trade Validation and Reporting System.
7.05.02 The Authorised Intermediary
who has terminated his access to the Off-Exchange Trade Validation and
Reporting System shall retain all his obligations and liabilities arising under
the Act, Statute and Bye-laws.
7.06.01 Failure
by any participant of the Off-Exchange Trade Validation and Reporting System to
pay any fees in relation to the Off-Exchange Trade Validation and Reporting
System and ancillary services shall be considered a breach of the Bye-laws and the Exchange may
take any action deemed appropriate in the circumstances.
Installation
7.07.00 Installation
of software in respect of the Off-Exchange Trade Validation and Reporting
System onto the reporting terminals is the sole responsibility of the Exchange.
Every Direct Participant
opting to have direct access to the Off-Exchange Trade Validation and Reporting
System directly from his office, shall provide officers and persons appointed
or delegated by the Exchange with the necessary access, on site or through
electronic means, to their premises, terminals and other facilities related to
the Off-Exchange Trade Validation and Reporting System in order for them to be
able to carry out the necessary installation of the appropriate software and
updates thereof or other computer hardware and/or other equipment, as well as
to effect inspections of such premises, software, hardware and/or other
equipment as may be necessary or expedient. During such inspections the
Exchange officers and/or persons appointed or delegated by the Exchange, shall
have the power to retrieve, extract, copy or seize in whole or in part any
software, hardware and/or other equipment or materials as the Exchange, in its
absolute discretion may deem necessary or expedient for the purpose of carrying
out any investigation or inquiry with a view to ensuring compliance with the
Act, Statute and Bye-laws.
7.07.01 The number of Off-Exchange Trade Validation and Reporting
System reporting terminals per Direct Participant opting to access this reporting
facility directly from his office, may not exceed the number of nominated
Reporters to the Off-Exchange Trade Validation and Reporting System on behalf of such Direct Participant.
7.07.02 It
is the responsibility of the Direct Participant opting to access this reporting
facility directly from his office to
ensure that all hardware and other facilities connected with the Off-Exchange
Trade Validation and Reporting System are in compliance with the specifications as laid down by the Exchange
from time to time.
7.07.03 The
Exchange shall make available a number of trading terminals at its premises for
use by Direct Participants opting to access the Off-Exchange Trade Validation
and Reporting System in this manner. Such terminals shall be available on a
first-come/first-served basis.
Power to deny/terminate
access
7.08.00 The
Exchange has the right to suspend for a definite period or indefinitely, as
well as deny or terminate access to the Off-Exchange Trade Validation and
Reporting System of any Direct Participant and/or the nominated Reporters
accessing the system on his behalf, should the Direct Participant and/or the
nominated Reporters accessing the system on his behalf be in default or has
failed to satisfy the provisions of the Act , Statute and the Bye-laws.
7.08.01 A
Direct Participant shall not be entitled to claim against the Exchange, its
officers or any person appointed or delegated by the Exchange, for any loss or
damages whatsoever related to their functions under the above bye-laws.
Systems Failure
7.09.00 In
the event of widespread technical failure of the Off-Exchange Trade Validation
and Reporting System or of any component of the system which impairs access to
the Off-Exchange Trade Validation and Reporting System and/or dissemination of
prices or any other information, or in the event of the Exchange’s own computer
hardware and/or other equipment malfunctioning, access to the Off-Exchange
Trade Validation and Reporting System may be suspended until the problem is
solved or the Off-Exchange Trade Validation and Reporting System session may be
cancelled, as deemed appropriate.
7.09.01 Whenever
the Off-Exchange Trade Validation and Reporting System is delayed for any of
the reasons given above, the Exchange may, at its own discretion, extend the
Off-Exchange Trade Validation and Reporting System session on that day.
7.09.02 If
the hardware or other equipment supporting the Off-Exchange Trade Validation
and Reporting System of a Direct Participant accessing this market directly
from his office is malfunctioning, the Exchange must be approached immediately
for assistance. The Exchange shall determine what technical assistance, if any,
may be provided to such Direct Participant.
Responsibility of the
Exchange
7.10.00 Dissemination
of information of transactions entered into the Off-Exchange Trade Validation
and Reporting System and disseminated in real time on the Off-Exchange Trade
Validation and Reporting System Ticker will be deemed to be disclosure of
off-exchange transactions to the public in terms of Article 8 of the
Off-Exchange Trading Regulations, 2004.
7.10.01 The
Exchange shall make such off-exchange transaction information available to the
public through its website or any other means on the same day as such
transactions have been effected in accordance with its own procedures.
7.10.02 The
Exchange shall submit off-exchange transaction information to the Competent
Authority in accordance with the directives applicable to Recognised Investment
Exchanges through any means or form as agreed to with the Competent Authority.
Validity of off-exchange
transactions
7.11.00 Off-exchange
transactions become irrevocable once the sell side of the transaction has been
validated against balances held in the appropriate Central Securities
Depository account and this has been confirmed by the buying
counterparty in accordance with the procedures as set out hereunder in order to ensure that only irrevocable deals
are reported to the market.
7.11.01 In
order for off-exchange transactions to be validated, both buy and sell orders
must include the following information:
(i)
name
or symbol of listed security to be traded;
(ii)
whether
the order is a buy or sell order;
(iii)
the
volume of securities transacted [in
the case of equity the minimum board lot that can be validated is 1. No
fractional shares may be transacted off-exchange. In the case of fixed income
securities the minimum board lot is 100 or any other minimum as set out in the
relevant Offering Memorandum of the security being transacted];
(iv)
price
at which the off-exchange deal has been transacted. [In the case of equities, prices are to be quoted as price per share up
to three decimal places. Prices in fixed income securities are to be quoted in
price per one hundred nominal up to two decimal places];
(v)
MSE
Account No. of the underlying client; and
(vi)
counterparty
[buy or sell Direct Participant as the case may be].
7.11.02 Should
a Direct Participant be submitting an off-exchange transaction order on behalf
of an Indirect Participant, the Indirect Participant is to be indicated in the field available on
the order screen in order that the transaction may be reported correctly.
Clearing and Settlement
7.12.00 Clients
transacting listed securities off-exchange may opt to have such transactions
settled through the Exchange’s security settlement system/s in operation at the
time of the transaction and in accordance with the prevalent rules of such a
security settlement system or may opt that such transactions are settled in any
other manner, not being the securities settlement system/s operated by the
Exchange.
7.12.01 Authorised
Intermediaries must ensure that they have clear instructions from their clients
regarding their settlement option and furthermore, to ensure that off-exchange
transactions are entered into the Off-Exchange Trade Validation and Reporting
System at such time as established by the Exchange in order to ensure that
off-exchange deals are settled in accordance with clients’ instructions.
7.12.02 Off-exchange
transactions not to cleared through the Exchange’s securities settlement
system/s will be considered to be free of payment transactions by the Exchange.
7.13.01 The
Off-Exchange Trade Validation and Reporting System operating hours will be as
stipulated by the Exchange and may be changed from time to time as deemed
appropriate by the Exchange.
7.13.02 The
Exchange will inform all Participants of the operating days and times of the
Off-Exchange Trade Validation and Reporting System by means of a Council Notice
giving such dates and times for the forthcoming calendar year. Any amendments
to the Off-Exchange Trade Validation and Reporting System operating times will
likewise be disseminated by Council Notice.
Procedures
7.14.00 Once
an off-exchange transaction has been agreed to by the underlying clients, in order
for such deal to be verified at source, the relevant details of the sell side
of the transaction as outlined in bye-law 7.11.01 above must be entered into
the Off-Exchange Trade Validation and Reporting System by the selling Direct
Participant.
7.14.01 The
sell order will be verified against the underlying client’s holdings as
registered within the Central Securities Depository and if validated, shall be
submitted to the buying Direct Participant who shall enter the counterparty
information for confirmation and execution.
7.14.02 Should
the sell order not be confirmed against the selling client’s holdings as
registered within the Central Securities Depository, the order will be returned
to the selling Direct Participant for any appropriate action.
7.14.03 Should
the buying Direct Participant not
confirm counterparty details, the outstanding sell order shall be deleted from
the Off-Exchange Trade Validation and Reporting System at the close of the
Off-Exchange Trade Validation and Reporting System session.
Reporting
7.15.00 Once an off-exchange deal has been agreed
to by the underlying clients, this must be entered into the Off-Exchange Trade
Validation and Reporting System as described in bye-laws 7.14.00 to 7.14.03 above within the time frames set out in
Article 4 of the Off-Exchange Trading Regulations, 2004.
7.15.01 Input of off-exchange trades into the
Off-Exchange Trade Validation and Reporting System will be deemed to be
reporting to the Exchange and the Central Securities Depository in terms or
Articles 5 and 6 of the Off-Exchange Trading Regulations, 2004.
7.15.02 In
the case of Off-Exchange Trade Validation and Reporting System transactions,
where the underlying clients have opted to clear such transactions through the
Exchange’s securities settlement system/s, the Exchange shall provide the
Direct Participants with sufficient information to enable them to issue
appropriate client contract notes, including the calculation of the accrued
interest.
Registration Advices
7.16.00 The Central Securities Depository will
amend the accounts of holders who have traded on the Off-Exchange Trade
Validation and Reporting System in terms of its own procedures and will issue
Registration Advices in accordance with bye-law 4.02.06.