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Financial Advisory and Intermediary Services Act 2002 (Act No. 37 of 2002)

Codes of Conduct

Code of Conduct for Authorised Financial Services Providers and their Representatives, involved in Forex Investment Business, 2004

Part II : General Prohibitions and Duties applying to Forex Investment Intermediaries

3. General duties of a forex investment intermediary


A forex investment intermediary must—

(i) deposit, transfer or arrange for the transfer of money received from or on behalf of a client for investment in a forex investment without undue delay to the final destination agreed with the client in terms of the mandate received from the client;
(ii) in the even that the intermediary performs the function of an introducing broker for a foreign forex services provider, in which it has managerial powers and authority to in any manner whatsoever accept or handle clients’ funds, disclose such facts to he client and assure that clients’ funds will at all times be separated from its own funds and be separately identifiable as the funds of each separate client;
(b) observe high standards of integrity and fair dealing in all matters relating to intermediary services;
(c) act in the interests of the clients;
(d) act with due skill, care, diligence and good faith;
(e) observe high standards of market conduct;
(f) provide to a client, on request and if required by the General Code or this Code, in a comprehensible and timely manner, any reasonable information regarding the investment of the client, market practices and the risks inherent in the different products;
(g) wherever and whenever appropriate, obtain from a client the necessary information about the financial situation, investment experience and investment objectives of the client to enable the forex investment intermediary to act in the interests of that client at all times;
(h) avoid any conflict between own interests and the interests of a client and where a conflict of interest does arise, the forex investment intermediary must —
(i) adequately disclose details of such conflict to the client while maintaining the confidentiality of other clients; or
(ii) decline to act for that client;
(i) disclose to a client all fees and other charges, whether direct or indirect, relating to the intermediary services rendered in relation to that client’s forex investments;
(j) disclose to a client non-cash incentives offered or other indirect consideration payable by another provider, a product supplier or any other person to the forex investment intermediary as a result of intermediating on the investments of that client;
(k) explain to a client how fees and other charges are calculated and charged in sufficient detail to enable the client to understand the method of calculation;
(l) ensure that its staff and representatives are at all times properly trained in accordance with the Act;
(m) must, prior to appointing a clearing firm or a foreign forex services provider to accept funds or instructions on behalf of clients, apply for approval by the Registrar of such clearing firm or foreign services provider in accordance with the Regulations; and
(n) disclose to a client—
(i) the name and address of the foreign forex services provider or clearing firm used, if applicable;
(ii) the name and address of the foreign regulator regulating the foreign forex services provider or clearing firm, and whether such provider or firm is approved or registered by such regulator;
(iii) the name and address of the foreign regulator under whose jurisdiction the dealing activity falls;
(iv) whether the foreign forex service provider or clearing firm, which holds investments on behalf of clients, maintains insurance cover to cover the risk of losses due to fraud, dishonesty and negligence by such foreign forex services provider or clearing firm and the extent of such cover.