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Disciplinary Procedure

The South African Institute of Stockbrokers (hereafter referred to as the ‘SAIS’ or the ‘Institute’) is an Institute for persons and organisations engaged in the financial markets as stockbrokers and/or financial market professionals at various levels in the public and private sectors. We strive to afford our members a professional identity and to take such action as may be necessary to improve and sustain the status, professional image and conduct of our members.

Members subscribe to a Code of Professional Conduct with regard to their conduct as stockbrokers and/or financial market professionals. As such, the disciplinary process of the Institute is intended to regulate the conduct of members within their professional capacity.


THE REGULATORY FUNCTION OF THE INSTITUTE

The Institute does not act as an arbitrator of social conduct, morals and values and will in general not concern itself with the conduct of members outside of any professional engagements, except in circumstances where the conduct of the member, if left unchecked, may ultimately result in damage to the Institute’s and/or its members’ professional image and/or reputation.

The Institute exercises the function of a disciplinary body and not that of a civil court of law. Sanctions that are imposed are generally aimed at regulating the conduct of a member and, although the Institute is not prohibited from doing so, it will in general not entertain claims for damages suffered by a complainant as a result of the professional negligence of a member. The Institute will also not issue interdicts or protection orders with regard to the conduct of a member outside the scope of his professional engagements.

COMPLAINANTS ARE ADVISED TO PURSUE CLAIMS FOR DAMAGES AGAINST A MEMBER VIA THE MAGISTRATES COURT OR HIGH COURT HAVING JURISDICTION IN THE MATTER.

THE STRUCTURE OF THE DISCIPLINARY PROCESS

The disciplinary process of the Institute is based on a three-tiered structure comprising of an ‘Investigation and Prosecution Committee’, a ‘Disciplinary Committee’ and an ‘Appeals Committee’.

  1. THE INVESTIGATION AND PROSECUTION COMMITTEE:
  2. The Investigation and Prosecution Committee (IPC) consists of two members of the Institute plus one independent attorney who acts as the chairperson of the Committee. The IPC determines its own process and is mandated to take note of and investigate all alleged offences, acts of misconduct and breaches by members and affiliates falling under the jurisdiction of the Institute. The IPC has the authority to gather and order the production of all relevant information, records, books, documents (regardless of its form or format) and statements under oath, as well as to conduct professional evaluations and practice visits. The IPC is convened as necessary and depending on case load.

  3. THE DISCIPLINARY COMMITTEE
  4. The Disciplinary Committee (DC) consists of either a retired judge of the High Court or Senior Counsel or a High Court admitted attorney or advocate with at least ten years’ experience in practice.

    The DC is a more formal structure for dealing with complaints referred to it by the IPC, either for hearing of oral evidence or for consideration of more serious complaints that warrant the termination of a member’s membership, together with such referrals to SARS and/or the Prosecuting Authorities as may be dictated by the facts of each individual case. The DC may also function as Appeals Committee for consideration of any appeals from the IPC.

    The DC is convened as necessary and determines its own process as deemed relevant or necessary to the consideration of the matter.

    The DC is not obliged to hear oral evidence on any matter and the complainant’s (founding) affidavit, the member’s answering affidavit and the complainant’s replying affidavit, together with such additional documents as the IPC may refer to the DC will constitute the initial record in front of the DC.

  5. THE APPEALS COMMITTEE
  6. The Appeals Committee (AC) is convened as necessary and is mandated to act as the Independent Disciplinary Appeals Committee for members found guilty of an offence and/or misconduct by the Disciplinary Committee.

    The Appeals Committee shall consider an appeal based on the record (or the relevant parts thereof) of the proceedings of the Disciplinary Committee. New evidence shall only be entertained in the discretion of the tribunal and then only in exceptional circumstances.

    The Tribunal may refer any matter back to the Disciplinary Committee together with such instructions as it may deem fit or it may vary and/or substitute the order of the Disciplinary Committee with any other as the AC may deem fit in the circumstances.


HOW TO LODGE A COMPLAINT

The Institute recognises the fact that that a balance needs to be maintained between the interest of the complainant and the interest of members of the Institute. The complainant needs to be provided with a method of addressing unprofessional conduct on the part of a member. At the same time the Institute has to be mindful of the fact that in many instances, membership of a professional controlling body is a requirement for practice and that suspension or termination of membership can impact on a member’s ability to earn an income. This may in turn have a negative effect on a members dependants, staff and their dependants.

In order to address this concern and to ensure a balance of interest and that complaints are dealt with as effectively as possible, the Institute subscribes to a formal disciplinary process that is modelled on the procedural requirements set forth in the rules of the High Court of South Africa, with the necessary modification to facilitate the disciplinary process. In order to lodge a complaint, the following steps need to be followed:

  1. DETERMINE JURISDICTION:
  2. Stockbrokers and/or Financial Market Professionals are often subject to the Rules and Codes of Conduct of exchanges and/or regulatory and/or controlling bodies, each having concurrent jurisdiction with regard to any professional misconduct.

    The Institute will in general not consider a complaint where the conduct of the member relates to the alleged contravention of any of the Rules and/or Codes of Conduct of an exchange and/or regulatory and/or controlling body. In such an event the relevant body carries primary jurisdiction and the complaint is to be lodged and dealt with according to the applicable Rules and Code of Conduct regulating the disciplinary process.

    he Institute may however, take note of the outcome of any disciplinary process and then determine whether any action should be instituted from the Institute’s side.

  3. DETERMINE MEMBERSHIP:
  4. The second step in the process is to ascertain whether the Stockbroker and/or Financial Market Professional against whom the complaint is to be lodged is in fact a member of the Institute. The Institute will only be able to consider complaints against members.

    This can easily be ascertained by directing a query to the membership department of the Institute. Queries may be directed to membership@sais.co.za

    Please note that the membership department will only confirm membership and that no further particulars with regard to a member will be provided.

    Complaints that do not reference the member’s membership number may be rejected or the consideration thereof delayed.

  5. DETERMINE IF THE CONDUCT CAN BE ATTRIBUTED TO THE MEMBER:
  6. Once the Stockbroker and/or Financial Market Professional has been properly identified and it has been confirmed that the Stockbroker and/or Financial Market Professional is in fact a member of the Institute, consider whether the conduct can in fact be attributed to the member.

    For example: the member may be employed by a company with whom the complainant contracted for the provision of professional services. Should a dispute arise between the complainant and the company with regard to the processing of debit orders from the complainant’s bank account and which fall outside the control or influence of the member, then it will be a dispute between the complainant and the company that is not directly attributable to any misconduct by the member. In such an event the Institute will be limited in its ability to act against the member (if at all).

  7. DETERMINE IF THE CONDUCT RELATES TO THE PRACTICE OF THE MEMBER AS A STOCKBROKER AND/OR FINANCIAL MARKET PROFESSIONAL:

    Can the conduct of the member be linked to a contravention of any of the provisions of the Code of Conduct and/or Disciplinary Rules and/or Standards of the Institute. If not, then the Institute will generally not be able to consider the complaint as it will fall outside the scope of the contractual responsibilities of the parties.

  8. DRAFT THE FOUNDING AFFIDAVIT SETTING OUT THE MERITS OF THE COMPLAINT:
  9. In order to facilitate that complaints are dealt with in a structured manner the committees rely to a large extent on the format and principles that have crystallised out of the civil practice and procedure in the High Courts of South Africa. The Institute requires that all complaints must be made:

    a) Under oath.
    b) In writing.
    c) In accordance with the guidelines set down by the disciplinary structures of the Institute from time to time.

    For more information on how to draft an affidavit please refer to the document Suggestions, Tips and Hints for Drafting Affidavits

    COMPLAINTS SHALL COMPLY WITH THE FOLLOWING FORMAL REQUIREMENTS:

    Please note that complaints that fail to comply with the set criteria will be rejected:

    1. A complaint shall be printed (or legibly typewritten) in black ink on white A4 paper.
    2. The complaint must be in the form of an affidavit. An affidavit has to be signed in front of a Commissioner of Oaths and conclude with a paragraph along the following lines:
    3. “I hereby certify that the deponent states that he/she understands the content of this affidavit, confirms the content as true and correct and has no objection to taking the oath, the provisions as set out in Government Notice Number R1648 of August 1977, as amended, have been complied with.”

    4. As far as it is possible, divide the content of the affidavit into paragraphs (including sub-paragraphs) which shall be consecutively numbered and shall, as nearly as possible, each contain a distinct averment. Please provide sufficient particularity to enable the opposite party to reply thereto.
    5. Where reference is made to external documents, copies of the documents should as far as possible be attached to the affidavit and consecutively identified eg: Annexure “A”, Annexure “B”, etc. Keep in mind that you may be requested to produce the original documents for inspection at a later date.
    6. If a document that you refer to is voluminous, please try to assist the Institute as far as possible by indicating in your affidavit to what area of the document you are specifically referring to or relying on eg: “ Annexure A, paragraph 5, on page 6 thereof.”
    7. Once your affidavit and its annexures are complete, please number all the pages on the top right hand corner from the first page to the last page (Bates numbering). This will assist us in working with the document and to monitor that essential pages are not inadvertently lost or misfiled during the process.
    8. Lastly, and as far as formalities are concerned, please remember to provide us with sufficient contact particulars to enable us to correspond with you. At the very least we require a telephone number, fax number and e-mail address. Our preferred method of communication is by way of e-mail.

  10. SUBMIT THE COMPLAINT:
  11. The following documents are to be submitted to the Institute:
    a) The Referral of Complaint and Undertaking by Complainant (IPC01A).
    b) The affidavit setting out the merits of the complaint, duly deposed to.

    The complaint may be scanned and submitted to the Institute as a BLACK AND WHITE PDF DOCUMENT to: membership@sais.co.za

    If your complaint is too large for email, you are welcome to split the document into three or four parts by separate email, provided that the parts are clearly identified, e.g. answering affidavit, part 1, etc.