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Financial Markets Act, 2012 (Act No. 19 of 2012)

Chapter VII : General Provisions Applicable to Market Infrastructures

60. Cancellation or suspension of licence

 

(1) The Authority may, with the concurrence of the Prudential Authority and the South African Reserve Bank, cancel or suspend a licence if—

[Words preceding section 60(1)(a) substituted by section 290, item 42(a) of Schedule 4, of the Financial Sector Regulation Act, 2017 (Act No. 9 of 2017), Notice No. 853, GG 41060, dated 22 August 2017 - effective 9 February 2018 (Notice R. 99, GG 41433, dated 9 February 2018)]

(a) the market infrastructure has failed to—
(i) comply with this Act or its rules;
(ii) comply with a directive, request, condition or requirement of the Authority in terms of a financial sector law; or
(iii) give effect to a decision of the Tribunal;

[Section 60(1)(a)(ii) and (iii) substituted by section 290, item 42(b) of Schedule 4, of the Financial Sector Regulation Act, 2017 (Act No. 9 of 2017), Notice No. 853, GG 41060, dated 22 August 2017 - effective 9 February 2018 (Notice R. 99, GG 41433, dated 9 February 2018)]

(b) after an investigation, the Authority is satisfied on reasonable grounds that the manner in which it is operated is—
(i) not in the best interests of clearing members of independent clearing houses or of central counterparties, authorised users or participants, or users or members of the market infrastructure, as the case may be, and their clients; or
(ii) defeating the objects of this Act referred to in section 2;

[Section 60(1)(b) substituted by section 290, items 42(c) and (d) of Schedule 4, of the Financial Sector Regulation Act, 2017 (Act No. 9 of 2017), Notice No. 853, GG 41060, dated 22 August 2017 - effective 9 February 2018 (Notice R. 99, GG 41433, dated 9 February 2018)]

(c) the market infrastructure has ceased to operate or has failed to commence operating within a reasonable period after being licensed; or
(d) the Authority is satisfied on reasonable grounds that the licence was obtained through misrepresentation.

 

(2) The Authority must, before cancelling or suspending a licence—
(a) inform the market infrastructure of the Authority’s intention to cancel or suspend;
(b) give the market infrastructure the reasons for the intended cancellation or suspension; and
(c) call upon the market infrastructure to show cause within a period specified by the Authority why its licence should not be cancelled or suspended.

 

(3) The Authority must, subject to subsection (4), cancel the licence of a market infrastructure upon submission to the Authority of a request by the market infrastructure for cancellation.

 

(4) If the Authority cancels or suspends a licence, the Authority must take such steps and may impose such conditions as are necessary to achieve the objects of this Act referred to in section 2, which steps may include—
(a) the transfer of the business of the market infrastructure to another similar market infrastructure; or
(b) the winding-up of the market infrastructure in terms of section 100.

 

(5) If the market infrastructure is a designated institution in resolution as defined in section 1(1) of the Financial Sector Regulation Act, 2017 (Act No. 9 of 2017), the Authority must give notice to the Reserve Bank before taking any action in terms of this section.

[Section 60(5) inserted by section 33 of the Financial Sector Laws Amendment Act, 2021 (Act No. 23 of 2021), Notice No. 789, GG45825, dated 28 January 2022- effective 1 June 2023 per (b)(i) of Commencement Notice No. 3202, GG48294, dated 24 March 2023]