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Securities Services Act, 2004 (Act No. 36 of 2004)

Chapter V : General Provisions Applicable to Self-Regulatory Organisations

57. Limitation on control of and certain shareholding or other interest in certain self-regulatory organisations

 

(1) For the purposes of this section "associate", in relation to—
(a) a natural person, means—
(i) that person’s spouse;
(ii) that person’s child, parent, stepchild or stepparent and any spouse of such person;
(iii) another person who has entered into an agreement or arrangement with that natural person, relating to the acquisition, holding or disposal of, or the exercising of voting rights in respect of, shares in the self-regulatory organisation in question;
(iv) a juristic person whose board of directors acts in accordance with that person's directions or instructions;
(v) a trust controlled or administered by that person;
(b) a juristic person—
(i) which is a company, means its subsidiary and its holding company and any other subsidiary or holding company thereof;
(ii) which is a close corporation registered under the Close Corporations Act, 1984 (Act No. 69 of 1984), means any member thereof as defined in section 1 of that Act;
(iii) which is not a company or close corporation, means another juristic person which would have been its subsidiary or holding company—
(aa) had it been a company; or
(bb) in the case where that other juristic person is not a company either, had both it and that other juristic person been a company;
(iv) means any person in accordance with whose directions or instructions its board of directors acts;
(v) means another juristic person whose board of directors acts in accordance with its directions or instructions;
(vi) means a trust controlled or administered by it.

 

(2) For the purposes of this section, a person is deemed to exercise control over a self-regulatory organisation which is a company or close corporation, if that person, alone or with associates—
(a) holds shares in the self-regulatory organisation of which the total nominal value represents more than 15 per cent of the nominal value of all the issued shares thereof;
(b) holds shares which entitle that person to exercise more than 15 per cent of the voting rights attached to the issued shares of that self-regulatory organisation; or
(c) has the power to determine the appointment of more than 15 per cent of the directors of that self-regulatory organisation, including the power to—
(i) appoint or remove, without the concurrence of another person, more than15 per cent of the directors; or
(ii) prevent a person from being appointed as a director without another person's consent.

 

(3) No person may, subject to this section, without the prior approval of the registrar acquire or hold shares or any other interest in a self-regulatory organisation which is a company or close corporation, if the acquisition or holding results in that person, directly or indirectly, alone or with an associate, exercising' control over the self-regulatory organisation.

 

(4) No person may acquire or control shares in a self-regulatory organisation which is a company or close corporation, if the aggregate nominal value of those shares, by itself or together with the aggregate nominal value of the shares already owned by that person or by that person and his or her associates, will amount to more than 15 per cent of the total nominal value of all the issued shares of the self-regulatory organisation concerned, without the prior approval of the registrar.

 

(5) The approval referred to in subsection (3)—
(a) may be given—
(i) subject to the condition that the aggregate nominal value of the shares owned by the person concerned and his or her associates may not exceed such percentage as may be determined by the registrar;
(ii) subject to such other conditions as the registrar may determine;
(b) may not be given if it will defeat the objects of this Act referred to in section 2; and
(c) may be refused if the person concerned, alone or with his or her associates, has not already owned shares in the self-regulatory organisation—
(i) of the aggregate nominal value; and
(ii) for the minimum period, not exceeding 12 months,

that the registrar may determine.

 

(6) If the registrar is satisfied on reasonable grounds that the retention of a particular shareholding by a particular shareholder will be prejudicial to the self-regulatory organisation, the registrar may apply to the court in whose area of jurisdiction the main office of the self-regulatory organisation is situated for an order—
(a) compelling such shareholder to reduce, within a period determined by the court, that shareholding to a shareholding with a total nominal value not exceeding 15 per cent of the total nominal value of all the issued shares of the self-regulatory organisation; and
(b) limiting, with immediate effect, the voting rights that may be exercised by such shareholder by virtue of his or her shareholding to 15 per cent of the voting rights attached to all the issued shares of the self-regulatory organisation.

 

 


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