Regulatory Framework and JSE Rules
This domain tests how a JSE brokerage identifies, applies and evidences the rules that govern its equities business. The exam expects you to know the hierarchy of obligations, the JSE’s role as a self-regulatory organisation, and the practical controls that flow from membership.
Core framework
- The Financial Markets Act 19 of 2012 (FMA) is the primary statute for exchanges, clearing houses, CSDs and market participants. JSE Rules operate within it and cannot authorise conduct the FMA prohibits.
- The FSCA supervises market conduct and licensed financial services providers; the JSE supervises trading membership and enforces its Equities Trading Rules, Clearing Rules and directives.
- A member must maintain fit-and-proper status, adequate capital, competent staff, records, reporting and escalation procedures.
- Market abuse, insider trading and manipulation are statutory offences, not merely rule breaches.
Worked example
A dealing desk receives an instruction that conflicts with a JSE directive but is common practice among non-members. The correct reasoning is: first identify the FMA obligation, then the applicable JSE rule or directive, then the firm’s policy. Non-member practice does not create permission. The order should be escalated to compliance and, if necessary, declined until the JSE confirms the treatment in writing. The member must retain the instruction, the escalation and the decision.
Traps that cost marks
- Treating JSE Rules as optional guidance rather than binding membership obligations.
- Assuming FSCA licensing alone authorises exchange trading; JSE membership or access arrangements are separate.
- Missing the distinction between a rule breach and a criminal market-abuse offence.
- Failing to document escalation and reliance on advice.
Exam focus
Expect scenario questions on rule hierarchy, reporting obligations, record retention and the consequences of trading without required approval.