JSE issues apology for the incorrect meta description on broker search

JSE Limited (“JSE) was alerted to an incorrect meta description automatically generated by search engines when searches relating to the JSE in relation to company information is performed. This resulted in the JSE’s awareness campaign relating to a cautionary pop-up on the JSE website regarding investment scams being displayed in search results.

The JSE has implemented technical measures to remedy the incorrect description.

We sincerely apologise for the error and in the event that you require any further information in respect of the remedial actions implemented or the JSE to clarify the incorrect search results, please contact [email protected].

On T+3, settlement of cash equities transactions take place, i.e. sellers deliver securities in exchange for cash receipt (DvP),  and buyers receive securities in exchange for cash payments (RvP), which is processed through the JSE appointed CSD, Strate, and which achieves simultaneous, final, irrevocable delivery versus payment (SFIDvP).

The JSE provides settlement assurance for central order book trades in the cash equity market and employs various measures to affect this. These measures are listed below:

  • Entry Requirements
  • Capital Adequacy 
  • View of Assets
  • CSDP Commits
  • Margin
  • Fails Transaction Management Process
  • Default Management
  • Governance

All trading members need to comply with the minimum membership requirements which include financial, capital, management and operational requirements and the appointment of a settlement officer and an alternate settlement officer to assist the JSE Settlement Authority in terms of managing settlement issues.

Members’ capital adequacy is monitored daily by the JSE Market Regulation Division, through the Broker Dealer Accounting (BDA) system. The monitoring of capital adequacy is an effective tool to assess members’ credit risk, liquidity and solvency and is used to flag potential financial stress of a member in order for the JSE to take appropriate and timeous action. 

One of the many benefits of the BDA system, maintained by the JSE and utilised by the member firms, is the ability for the JSE to see the securities and cash held by the members on behalf of their controlled clients as well as any securities held by the members for their own account.  This view enables the JSE to determine with a high degree of certainty whether the members are able to meet their settlement obligations in relation to controlled client and proprietary trades on settlement date.  All members are obliged to use the BDA system. Typically controlled clients are retail clients.

Click here to view the BDA Specifications

Non-controlled clients are clients where the member does not have control over the clients’ assets and who appoint a Central Securities Depository Participant (CSDP) to act on their behalf.  These clients must surrender their share certificate(s)/custody to the chosen CSDP and open an account with the CSDP.  These clients will only deal with a broker when wanting to execute a trade and must provide the broker with details of their CSDP account when trading.  Typically non-controlled clients are institutional clients.

As mentioned above, non-controlled clients hold their securities and cash with a CSDP rather than with a JSE member.  CSDPs commit to settling non-controlled client transactions if the client is in a position to settle.  A commit is a legal, but not mandatory undertaking by a CSDP to settle a transaction on behalf of its client. The JSE takes comfort from the fact that the CSDP, who is not the counterparty to a trade, has committed to settling the trade based on information on securities and funds availability.

The JSE requires members to deposit settlement margin with the JSE on T+2 (calculated at EOD T+1) for all transactions that they have introduced to the market and which pose a risk of not settling. Members may claim the margin from their clients. The margin requirement comprises of two components:

Mark-to-Market –Revaluation of the transaction to the current market value as at end of day on T + 1; and​

Risk Margin –Potential future losses calculated using parametric value-at-risk (VaR).

Click here​ to see the JSE margin methodology

The JSE conducts stress testing and exposure monitoring covering all outstanding transactions, and checks daily to ensure that members maintain adequate regulatory capital.  These monitoring techniques are conducted in an attempt to identify problems early and to escalate any concerns timeously.

In the event of a member being unable to meet its obligations to another market participant or a client, all client transactions remain valid, clients remain contractually obliged to settle their transactions, and the necessary steps will be taken by the JSE Settlement Authority to ensure that those transactions still settle

The JSE conducts stress testing and exposure monitoring covering all outstanding transactions, and checks daily to ensure that members maintain adequate regulatory capital.  These monitoring techniques are conducted in an attempt to identify problems early and to escalate any concerns timeously.

In the event of a member being unable to meet its obligations to another market participant or a client, all client transactions remain valid, clients remain contractually obliged to settle their transactions, and the necessary steps will be taken by the JSE Settlement Authority to ensure that those transactions still settle

The PTS Risk Management and Operational Teams are responsible for ongoing financial and operational risk management of the Cash Equity Market, reporting to the Director of Post Trade Services and acting under delegated authority from the JSE Board.​​