JSE Brokerage Operations key terms

The rulebook governing how equity orders are entered, matched, and executed on JSE trading systems, including member obligations, order types, and conduct standards binding on brokers.

South African statute establishing the licensing and supervision of exchanges, central securities depositories, and market participants, and empowering the registrar to regulate market conduct.

Authorisation granted by the registrar to operate an exchange or central securities depository, subject to ongoing capital, governance, and rule-compliance conditions.

A firm admitted by the JSE to trade on its markets, meeting capital adequacy, operational, and fit-and-proper requirements, and bound by the exchange's rules and directives.

Minimum regulatory capital a member must hold, calculated against risk exposures and prescribed ratios, to absorb losses and protect clients and the market.

The electronic record of all live buy and sell orders for a security, ranked by price and time priority, from which trades are matched on the exchange's central trading system.

An instruction to buy or sell immediately at the best available price in the order book, with no price limit, so execution price is uncertain until filled.

An instruction to trade only at a specified price or better, remaining open until executed, cancelled, or expired, giving price certainty but no execution certainty.

The obligation to take reasonable steps to obtain the best possible result for clients when executing orders, considering price, cost, speed, and likelihood of settlement.

The controlled process of recording, validating, routing, and executing client instructions promptly and fairly, including allocation rules and prevention of misuse of order information.

Trading ahead of a known client order to profit from the expected price impact, an abusive practice that breaches duties of confidentiality and market integrity.

Notification to the client of execution details such as security, quantity, price, commission, and settlement date, enabling verification and timely settlement.

A formal record of a transaction between broker and client, stating terms, charges, and settlement obligations, and often required within prescribed time limits.

The date on which a transaction is executed and agreed, from which settlement timing and position records are calculated.

The date on which ownership and cash are exchanged to complete a trade, determined by the market's settlement cycle and any applicable holidays.

A convention under which a trade settles three business days after trade date, aligning delivery of securities with payment of cash.

South Africa's central securities depository and settlement system, holding electronic records of securities ownership and settling trades through book entry rather than paper certificates.

An entity that holds securities in electronic form, maintains ownership records, and operates the settlement infrastructure through which transfers between participants are completed.

Conversion of physical share certificates into electronic records held in a central securities depository, removing paper handling and enabling faster, safer transfer.

Holding physical certificates in a depository vault so that transfers occur by book entry rather than physical delivery, an alternative to full dematerialisation.

The message sent by a participant to the depository or settlement system directing delivery of securities against payment, matched before settlement can occur.

A transaction that does not settle on the due date because of short delivery, insufficient cash, or unmatched instructions, triggering buy-in or penalty procedures.

A procedure allowing the buyer to source securities in the market when the seller fails to deliver, with costs recovered from the defaulting party.

The structured process of admitting a new client, covering identification, risk assessment, account setup, agreement signing, and suitability checks before trading begins.

The identification and verification of a client's identity and risk profile, including understanding the nature of the business relationship, performed before and during the relationship.

Additional scrutiny applied to higher-risk clients, such as politically exposed persons or complex offshore structures, involving deeper source-of-funds and source-of-wealth checks.

Identification of the natural persons who ultimately own or control an account or entity, required to prevent concealment behind nominee or corporate structures.

An individual entrusted with prominent public functions, or a close associate or family member, whose accounts require enhanced scrutiny because of elevated corruption risk.

Evidence of where money used in a transaction or account originated, used to assess legitimacy and detect proceeds of crime.

An explanation of how a client's overall wealth was accumulated, such as business income or inheritance, distinct from the origin of specific funds.

A confidential report filed with the financial intelligence centre when a transaction or activity suggests possible money laundering or terrorist financing.

Disclosing to a client or third party that a suspicious activity report has been or may be made, which is itself an offence and can compromise investigations.

An account holding securities registered in the name of a broker or nominee on behalf of the underlying client, who retains beneficial ownership.

A separately identified account holding client assets apart from the firm's own assets, protecting clients if the firm fails.

The requirement to hold client cash in designated trust or segregated accounts, separate from firm funds, and to reconcile balances regularly.

The regular comparison of internal client cash records with bank and depository balances to confirm that client funds are complete and correctly held.

Policies, procedures, and checks designed to prevent error and fraud, safeguard assets, and ensure reliable records and compliance with rules.

Splitting responsibilities so no single person controls an entire transaction or record, reducing the risk of error and concealment.

A control requiring a second authorised person to review and approve a transaction or change before it takes effect.

An event initiated by an issuer affecting its securities, such as a dividend, rights issue, or share split, requiring processing for entitled holders.

The date on which the register is examined to determine which holders are entitled to a corporate action benefit.

The date from which a security trades without the right to the declared dividend, so buyers on or after that date do not receive it.

The quantity of securities, cash, or rights a holder is due from a corporate action, calculated from the position held on the record date.

Tax deducted from dividends before payment to shareholders, at rates depending on the holder's tax status and applicable treaty relief.

An offer to existing shareholders to buy new shares, usually at a discount, in proportion to their holdings, often tradable as nil-paid rights.

Prohibited conduct including insider trading and market manipulation that undermines fair and transparent trading and harms confidence in the market.

Dealing in securities while in possession of material non-public information, or disclosing such information to others who trade on it.

An information barrier separating teams with sensitive knowledge, such as corporate finance, from trading staff to prevent misuse of confidential information.

Situations where a firm's or employee's interests could improperly influence advice or execution, requiring identification, disclosure, and management.