The Department of Economic Affairs (DEA) has rule 8 of the Securities Contract (Regulation) Rules, 1957, that effectively measures to improve the ease of doing business for brokers.
The amendment provides clarification on what shall be considered as “business” under the rules as previously the definition was broad and limited a broker’s investment activities.
Under the change, investments will be considered as “business” only if they involve client funds or securities, or relate to arrangements of financial liability of the broker.
The DEA had stakeholder comments in September 2024 on rule 8, with some saying it lacked clarity over several matters that ultimately made the task at hand more complex. It was clarified that the previous rule aimed to protect clients’ money being invested into businesses other than those intended and preserve the integrity of the profession.
Through consultation the DEA noted stakeholders’ different concerns over rule 8 and has now released the amendment to provide clarity and improve the ease of doing business for brokers and others in the industry.
