Code of Conduct.

This Code of Conduct, (The Code), forms the fundamental ethics and risk management culture that each Member and User of the Software, Platforms and Infrastructure (SPI) of Exchange Trust Settlement Services (Pty) Ltd (ETSS) must apply. The Code is a requirement of the Financial Markets Act of the Republic of South Africa (Act 19 of 2012) and Financial Advisory and Intermediary Services Act of the Republic of South Africa (Act 37 of 2002), it has been drafted according to the guidelines on Ethics Management of King III.

Common Goal

The Code of Conduct for ETSS and use of the SPI has been designed to protect the ecosystem of Users and Members of the SPI who are both independent and interdependent on each other and all of whom share a common goal, namely;

"…To Trust the quality and reliability of products and services being Exchanged in return for agreed Settlement …"

The Code is owned by ETSS, each Member and or User by agreeing to the Terms and Conditions and this Code have adopted and have agreed to be bound by the rules of the Code. ETSS has the obligation under the above referenced Acts, to ensure that its members act according to the code and it will therefore in the interest of all the Members and Users of the SPI discipline such User and or Member who does not abide by the Code, including the termination and public disassociation from such a Member or User.

Regulated Business

The business conducted on the SPI is of a sophisticated and regulated nature, in all global markets that the SPI operates, it covers a significant degree of disciplines and product categories that each report to different regulators. As a result it is inefficient for ETSS to attempt to be compliant to each of the various regulators, hence to ensure that the SPI remains compliant and protects its Members and Users, all primary members of the SPI will be a Regulated Licensed or Authorised Service Provider (AP) in the jurisdiction where the services are conducted. The SPI engages with three categories of Authorised Service Providers namely; Product Suppliers, Product Providers and Product Administrators, it ensures that these AP's are able to provide a compliant product electronically using the efficiencies of the SPI to achieve the Common Goal. ETSS demands of the primary members to remain compliant at all times to their respective Regulatory bodies and Act according to the various Codes of Conduct in their respective industries.

Administrator AP

Administrator AP provide Intermediary Products and Services as defined in the above Acts. These AP's use the SPI to; process payments, issue products, provide financial and product reconciliations, process claims, provide product custodial services, complaint management and resolution service, provide record keeping and reporting on financial transactions according to the requirements of the various Acts set out in the Terms and Conditions of use, provide a register of Intermediaries / Representative Users who provided advice, Recording and Reporting on non-compliant transactions. These AP's will at all times provide accurate and reliable data that will be used as a foundation for Members and Users to make decisions, issue or demand settlement instructions through the SPI, Issue Products or Terminate services. 

Product Provider AP

Product Provider AP's provide advice on products natural or legal entities. These AP's uses the SPI to maintain a record of the Advice Provided, to record a Sale of a particular Product to an entity on the SPI.

In terms of the SPI, advice is to; cause any recommendation, guidance or proposal of a financial nature, by any means or medium, given to any entity or group of entities on financial products with the intention of getting the entity to consider:

        i.      Entering into a financial transaction in respect of a Product offered via the SPI

      ii.      Investing in a financial product listed on the SPI

     iii.      Varying, replacing or terminating any financial product whether or not such product is or was on the SPI

     iv.      The conclusion of any transaction related to any product listed on the SPI, including a loan, a cession, a guarantee, a             surety or a commodity aimed at incurring liability or acquiring rights/benefits in any such product by a Member/User.

 This applies regardless of whether or not such advice:

        i.      Is incidental to the financial planning of the affairs of a client or

      ii.      Results in any transaction, purchase, investment, variation, replacement or termination being effected of any product             whether or not such a product is or was offered on the SPI.

     iii.      It covers all products as defined in the Terms and Conditions

 The Product Provider AP's commit to ensure that their representatives provide advice which is accurate, relevant, unbiased, with appropriate skill and always in the best interest of their Members.

Product Supplier AP

Product Supplier AP's retain the ultimate responsibility towards a Product Holder or an entity that has acquired a Product on the SPI. These AP's use the SPI to manage their exposure, manage systemic and credit risk as well as overall product performance. A Product Supplier AP takes ultimate responsibility for the Product configuration on the SPI this includes pricing, product criteria, product Terms and Conditions, fee distribution and allocation. It ensures that the Product meets all regulatory compliant aspects and are provided to the end-user through appropriately trained and licensed Product Provider FSP's and Administrated by appropriately trained and licensed Administrator AP's. These AP's commit not to issue or make available any Product on the SPI, that do not meet the minimum industry requirements for Product Performance and Regulatory requirement, they commit to make Products available on the SPI, that has the intention and objective to benefit the End User / Member in exchange for fair and reasonable compensation.    

Disclosure of Information

Each user shall be associated with one or more AP on the SPI. Each Member and User has the right to access information about the AP's that provide Products, Sell Products or provide Services on the SPI.

Such information shall be accessible at product and main menu level on the SPI and be available to print on relevant product documents. The information disclosed shall be:

·    Contact Detail

·    Physical Address

·    Public Officer or Responsible Party contact Detail

·    Compliance Officer contact Detail, where applicable

·    Contact person and detail for Complaints

·    Key Person contact detail, where applicable

·    AP License and Licensing Authority

·    License Category and Restrictions (if any)

·    Indemnity & Fidelity Insurance (if any)

Confidentiality

All Members and Users shall treat information gained via the SPI about other users as confidential. Members and Users shall avoid any unsolicited contact with other Members and/or Users. The confidentiality and data privacy shall be as per the Terms and Conditions. 

Segregated Funds, Accounts and Audits

ETSS will at all times maintain funds of Members and Users in separate and appropriately segregated accounts in terms of the requirements of the National Payment System Act of the Republic of South Africa (Act 78 of 1998), for System Operators and Third Party Payment Providers. No Member or User funds will be maintained in any business account of the SPI or ETSS. Funds, and Transaction Histories of Members and Users are subject to external Audit of the Member and/or User Auditors. ETSS will make available system generated audit trails to a Member/User registered Auditor, on written request, (i) an Annual basis by no later than 28 Feb, or (ii) an Ad-Hoc basis with 30 Day notice, subject to the payment of the relevant fees to ETSS.

Complaint Procedure

The Code of Conduct applies to Members and Users of the SPI, should any Member or User have a complaint, such complaint must first be raised with the respective AP of the Member/User. Should such complaint fail to be resolved, a Member / User can lodge a complaint on the SPI for ETSS to consider. ETSS will use its discretion and judgement in assessing the complaint of the Member/User prior to contacting the affected AP. The manner and objective will be to resolve the complaint prior to it escalating to a disciplinary action or a dispute which will be dealt with in terms of the dispute resolution procedures recorded in the Terms and Conditions. Any complaint raised by an entity represented by a Member or User - where such Entity is not a Member or User of the SPI and where the Member/User acted under a mandate of the Entity, such complaint will result in an immediate suspension of the service where applicable (such as a Funds Transfer, Debit Order, or any other possible irregular transaction), until the complaint has been resolved to the satisfaction of ETSS.  

Conflict of Interest

A conflict of interest occurs when the business interest of ETSS becomes indistinguishable from the business interest of one of the AP Members on the SPI. This means that ETSS will profit from transactions of such an AP, other than through ordinary disclosed transaction fees. To avoid such conflict of interest not ETSS or its shareholders and management will have through the ordinary course of business a direct or indirect interest in any AP member of the SPI. In an event where such a potential conflict of interest arises the potential conflict will be indicated in the product disclosure information on the SPI.

Fraud

Fraud or Potential for fraud will compromise the integrity of the SPI, the Members of the SPI, our regulatory and financial reporting as well as our physical and intellectual assets. Fraud is the act by any user to intentionally misrepresent or conceal facts that cause another user or potential user to act or not to act based on the misrepresentation or concealment. It may be committed by one or more users of the SPI. All users have the responsibility to avoid participating in any fraudulent activity and have the additional responsibility to disclose such fraud or potential fraud to ETSS at compliance@exchangetrust.co.za . In order to remain compliant to this rule no user shall impersonate another user, or use the log-in credentials of another user to impersonate or Act on behalf of such a user. Impersonation does not include where a User is acting as Advisor, Intermediary or Representative as an AP operator

Exemptions:

Where an AP has requested an exemption or amendment from one or more elements of the Code of Conduct, such exemption or amendment will be noted if approved by ETSS in its sole discretion on the relevant AP Disclosure of Information page on the SPI.

ETSS Undertakes to its Members and Users, to:

·    Monitor on an ongoing basis AP's compliance and licensed authority

·    Monitor external developments relating to codes of conduct in Financial Services, legislative changes and related issues

·    Act fairly and reasonably towards its Members and Users in a consistent and ethical manner. In doing so ETSS will consider       the conduct of its Members and Users, the conduct of ETSS and the contract between ETSS and its Members/Users

·    Comply with all relevant laws relating to financial services as referenced in the Terms and Conditions

If this Code imposes an obligation on ETSS, in addition to obligations applying under a relevant law, ETSS will also comply with this Code except where doing so would lead to a breach of a law (for example, a privacy law).

In addition to any Member's or User's rights under this Code or the Terms and Conditions, the User also retains any rights he/she may have under any other law in any other Territory where the User resides and has use of the SPI.

ETSS will provide a Member or a User with any information as is required in the various Acts noted in the Terms and Conditions, such information may be made available to the Member or User within a reasonable time and against payment of a reasonable fee as per ETSS Terms and Conditions.

ETSS will charge reasonable fees and disclose such fees to Member's and Users at the time such services are being provided or at any other time as requested. Where such service fee changes or is updated, the Member and User will be informed with a minimum of 30 Days notice.

Members and Users undertake to:

·    Provide information about themselves that will appropriately identify themselves, using information which is accurate, not       misleading, valid and current at the time it is requested by ETSS and provided to ETSS.

·    Notify ETSS immediately once it becomes known that its User Access Codes have been compromised in any manner.

·    To act with integrity towards other Members and Users of the SPI.

 Effective Date and Improvements:

This Code is affective as of 12 May 2014 and replaces any ETSS Code communicated before this date either in writing or implied. ETSS will consult with its Members and Users on a regular basis to continuously work towards improving the SPI Code of Conduct and Service Standards.