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Amendments to prescribed information to be provided by parties to a transaction in terms of the Financial Markets Act

Amendments to prescribed information to be provided by parties to a transaction in terms of the Financial Markets Act

2nd September 2015

By: Shannon de Ryhove
Creamer Media Senior Deputy Editor Polity & Multimedia

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The Registrar of Securities Services (Registrar) has published a draft notice (Draft Notice) prescribing a new form for the reporting requirements as contemplated in section 25(1) of the Financial Markets Act 19 of 2012. Interested parties are invited to comment on the Draft Notice before close of business on 21 September 2015.

Section 25(1) of the Act provides that any transaction in listed securities resulting in a change of beneficial ownership of those securities, that is concluded outside of an exchange by a financial institution referred to in section 24(c) of the Act, or a person referred to in section 24(d) of the Act, must be reported by those financial institutions or person to the Registrar.

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Section 24(c) of the Act provides that a person who is not an authorised user may only carry on the business of buying or selling listed securities if it is a financial institution transacting as principal with another financial institution, also transacting as principal.

Section 24(d) of the Act provides that a person may only carry on the business of buying or selling listed securities if that person is a person who, subject to any condition that the registrar may prescribe, buys or sells listed securities in order to:

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  • give effect to a reconstruction of a company or a group of companies by the issue or reallocation of shares, or a takeover by one company of another or an amalgamation of two or more companies; or
  • effect a change in the control over management or the business of a company.

The Registrar previously published a board notice which set out the prescribed information, as well as the manner and time in which these transactions must be reported to the Registrar.

Due to the fact that the Registrar was often required to engage in further correspondence in order to assess whether a transaction did fall within the ambit of section 24(c) of the Act, an amended form has been deemed necessary in order to reduce inefficiencies in the current process.

The hope is that the proposed form will serve as a 'checklist' that will enable market participants, prior to a transaction, to ensure that they do in fact meet all the requirements prescribed by section 24(c) or (d).

Issued by Webber Wentzel

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