SPECIAL GAZETTE NUMBER: 127 DATE 06 December 2004 Inward Listed Securities Members are referred to the South African Reserve Bank’s Exchange Control Circular No. D.441 entitled “Inward Listings by Foreign Entities on South African Exchanges”, attached hereto, and the subsequent interim budget speech by the Minister of Finance where further dispensations were allowed. Members are advised that on 29 November 2004, the JSE Executive Committee approved Directive BL, as attached, to cover the procedures to be followed by members with regard to Inward Listed Securities. This Directive BL is effective immediately. The key points are - brokers have to obtain a copy of the Exchange Control Application (ECA) from their institutional clients before purchasing Inward Listed Securities. All that has to be validated by the broker is that the ECA has not expired; brokers have to send a copy of the ECA to the Settlement Authority by 12h00 on T+1, which if not received by that time, will require the broker to move the purchase to their misdeals accounts and deal out of the position within 5 business days; normal failed trade procedures will be applied by the Settlement Authority where brokers are unable to secure settlement as per the current Equities Rule 14 and Directive E; if trades go into reverse substitution due to lack of securities or cash, brokers have to secure settlement by 12h00 on T+4 by borrowing the securities, as per the current Equities Rule 14 and Directive E; and brokers are not permitted to trade or hold Inward Listed Securities for their own account, other than in respect of those held in their misdeals account. Should members have any queries in respect of the above, they can contact Brett Kotze on 011 520 7587 or at BrettK@jse.co.za. 6 December 2004 Des Davidson Director: Clearing & Settlement Division Distributed by the Secretarial Services Division +27 11 520-7260 BL Transactions in Inward Listed Securities 1. For the purpose of this directive, “Inward Listed Securities” shall mean foreign shares issued by listed companies granted a listing on the JSE in terms of the Exchange Control Regulations pertinent to foreign entities listing on South African exchanges. 2. Transactions in Inward Listed Securities by a client who is a South African resident shall not be subject to any limitations in terms of Exchange Control Regulations if the client is a natural person, which specifically excludes trusts and partnerships. 3. A client, who is a South African resident and who is not a natural person, requires approval from the South African Reserve Bank prior to the purchase of any Inward Listed Securities. 4. A broking member (equities) may not trade in Inward Listed Securities for their proprietary account, other than as may be required in terms of BL 7. 5. Prior to executing an order to purchase Inward Listed Securities on behalf of a client that is a South African resident that is not a natural person, a broking member (equities) shall obtain a copy of a valid Exchange Control Application form from such client. 6. Once the relevant transaction has been executed, the broking member (equities) shall forward the Exchange Control Application form obtained from the client to the Settlement Authority by 12h00 on T+1. 7. In the event that the Settlement Authority does not receive a copy of the Exchange Control Application form from the broking member (equities) by 12h00 on T+1, the Settlement Authority will instruct the member to transfer the purchase of any Inward Listed Securities from the client’s account to the member’s Misdeals account and the member will assume responsibility for settling the transaction on settlement day. 8. Any purchase transferred to a broking member (equities) Misdeals account in terms of BL 7 must be sold out by the member within five business days.
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