Financial Services, Financial Markets & Market Abuse

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South Africa has a vibrant and well-regulated financial services industry that is backed by legislation, regulation and specific rules. The prov​​ision of financial services in South Africa is regulated mainly by the Financial Markets Act, No. 19 of 2012 (FM Act) and the Financial Advisory and Intermediary Services Act, No. 37 of 2002 (FAIS Act).

The FM Act regulates and controls exchanges and the trading of securities. It aims to reduce systemic risk while promoting international competitiveness and requires that only licensed persons operate as exchanges, central securities depositories or clearing houses. The only licensed exchange in South Africa, the Johannesburg Stock Exchange (JSE), currently operates three markets each with their own listings, membership requirements and rules. They are the Equities Market, the Derivatives Market, and the Interest Rate Market.

The effectiveness of insider trading legislation in South Africa has seen significant improvements in the last few years. Besides outlining offences and prohibiting various actions it also allows for the imposition of administrative penalties on those who contravene or fail to comply with its provisions, thereby curbing the occurrence of market abuse.

The FAIS Act regulates the rendering of financial advisory and intermediary services. It outlines strict standards that financial advisers are required to adhere to. Under this Act no person may offer financial services without a licence. Furthermore, licensed financial service providers must meet various obligations including prescribed fit and proper behaviour and codes of conduct.

The Financial Services Board and the various registrars that operate under its auspices, together with the JSE, play an important role in administrating and enforcing the financial services legislation that underlies South Africa's financial services sector.

“The effectiveness of insider trading legislation in South Africa has seen significant improvements in the last few years.”

For a comprehensive document outlining the implications of this area of law in South Africa
click here.​
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