72. In this Chapter, unless the context indicates otherwise- 35 “claims officer” means the person appointed by the board to be responsible for considering and determining claims in terms of sections 77(8) and (9); “deal” includes conveying or giving an instruction to deal; “document” includes a book, record, security or account, and any information stored or recorded electronically, photographically, magnetically, mechanically, 40 electro-mechanically or optically or in any other form; “executive director” means a person appointed as such in terms of section 83( 12); “inside information” means specific or precise information, which has not been made public and which- (a) is obtained or learned as an insider; and (b) if it were made public would be likely to have a material effect on the price or 45 value of any security listed on a regulated market; “insider” means a person who has inside information- 80 No. 27190 GOVERNMENT GAZEITE, 24 JANUARY 2005 Act No. 36,2004 SECURITIES SERVICES ACT, 2004 (a) through- (i) being a director, employee or shareholder of an issuer of securities listed on a regulated market to which the inside information relates; or (ii) having access to such information by virtue of employment, office or profession; or (b) where such person knows that the direct or indirect source of the information was a person contemplated in paragraph (a); “market abuse rules” means the rules made under section 82(2)(g); “market corner” means any arrangement, agreement, commitment or under- standing involving the purchasing, selling or issuing of securities listed on a regulated market- (a) by which a person, or a group of persons acting in concert, acquires direct or indirect beneficial ownership of, or exercises control over, or is able to influence the price of, securities listed on a regulated market; and (b) where the effect of the arrangement, agreement, commitment or understand- ing is or is likely to be that the trading price of the securities listed on a regulated market, as reflected through the facilities of a regulated market, is or is likely to be abnormally influenced or arbitrarily dictated by such person or group of persons in that the said trading price deviates or is likely to deviate materially from the trading price which would otherwise likely have been reflected through the facilities of the regulated market on which the particular securities are traded; “person” includes a partnership and any trust; “public sector body” means- (a) all spheres of the government of the Republic or of any other country or territory; (b) the South African Reserve Bank; or (c) the central bank of any country or territory outside the Republic, but does not include the Public Investment Commissioners established by section 2 of the Public Investment Commissioners Act, 1984 (Act No. 45 of 1984); “regional court’’ means a court established for a regional division under the Magistrates’ Courts Act, 1944 (Act No. 32 of 1944); “regulated market” means any market, whether domestic or foreign, which is regulated in terms of the laws of the country in which the market conducts business as a market for dealing in securities listed on that market. Insider trading Offences 73. (1) (a) An insider who knows that he or she has inside information and who deals directly or indirectly or through an agent for his or her own accouht in the securities listed on a regulated market to which the inside information relates or which are likely to be affected by it commits an offence. (b) An insider is, despite paragraph (a), not guilty of any offence contemplated in that paragraph if such insider proves on a balance of probabilities that he or she- (i) was acting in pursuit of the completion of an affected transaction as defined in section 440A of the Companies Act; (ii) only became an insider after he or she had given the instruction to deal to an authorised user and the instruction was not changed in any manner after he or she became an insider. ( 2 ) (a) An insider who knows that he or she has inside information and who deals, directly or indirectly, for any other person in the securities listed on a regulated market to which the inside information relates or which are likely to be affected by it commits an offence. (b) An insider is, despite paragraph (a), not guilty of any offence contemplated in that’ paragraph if such insider proves on a balance of probabilities that he or she- I , 5 10 15 20 25 30 35 40 45 50 (i) is an authorised user and was acting on specific instructions from a client, save where the inside information was disclosed to him or her by that client; 55 c 82 No. 27 190 GOVERNMENT GAZETTE, 24 JANUARY 2005 Act No. 36,2004 SECURITIES SERVICES ACT, 2004 (ii) was acting on behalf of a public sector body in pursuit of monetary policy, policies in respect of exchange rates, the management of public debt or external exchange reserves; or (iii) was acting in pursuit of the completion of an affected transaction as defined in section 440A of the Companies Act; (iv) only became an insider after he or she had given the instruction to deal to an authorised user and the instruction was not changed in any manner after he or she became an insider. ( 3 ) (a) An insider who knows that he or she has inside information and who discloses the inside information to another person commits an offence. 5 10 (b) An insider is, despite paragraph (a), not guilty of the offence contemplated in that paragraph if such insider proves on a balance of probabilities that he or she disclosed the inside information because it was necessary to do so for the purpose of the proper performance of the functions of his or her employment, office or profession in circumstances unrelated to dealing in any security listed on a regulated market and that 15 he or she at the same time disclosed that the information was inside information. (4) An insider who knows that he or she has inside information and who encourages or causes another person to deal or discourages or stops another person from dealing in the securities listed on a regulated market to which the inside information relates or which are likely to be affected by it commits an offence. 20 Publication 74. (1) For the purposes of the definition of “inside information”, information is regarded as having been made public in circumstances which include, but are not limited to, the following: (a) When the information is published in accordance with the rules of the relevant 25 regulated market for the purpose of informing clients and their professional advisers; (b) when the information is contained in records which by virtue of any enactment are open to inspection by the public; or (c) when the information can be readily acquired by those likely to deal in any 30 listed securities- (i) to which the information relates; or (ii) of an issuer to which the information relates; or (d) when the information is derived from information which has been made public. (2) Inside information which would otherwise be regarded as having been made public must still be so regarded even though- (a) it can be acquired only by persons exercising diligence or observation, or having expertise; ( b ) it is communicated only on payment of a fee; or ( c ) it is only published outside the Republic. 35 40 Prohibited trading practices 75. (1) No person may- (a) either for such person’s own account or on behalf of another person, directly or indirectly use or knowingly participate in the use of any manipulative, 45 improper, false or deceptive practice of trading in a security listed on a regulated market, which practice creates or might create- (i) a false or deceptive appearance of the trading activity in connection with; or (ii) an artificial price for, that security; ( 6 ) place an order to buy or sell listed securities which, to his or her knowledgF, 1 will, if executed, have the effect contemplated in paragraph (a). 50 , (2) A person who contravenes subsection (1) commits an offence. ( 3 ) Without limiting the generality of subsection (l), the following are deemed to be 55 manipulative, improper, false or deceptive trading practices: (a) Approving or entering on a regulated market an order to buy or sell a security listed on that market which involves no change in the beneficial ownership of that security; 84 No. 27190 GOVERNMENT GAZETTE, 24 JANUARY 2005 Act No. 36,2004 SECURITIES SERVICES ACT, 2004 approving or entering on a regulated market an order to buy or sell a security listed on that market with the knowledge that an opposite order or orders of substantially the same size at substantially the same time and at substantially the same price, have been or will be entered by or for the same or different persons with the intention of creating- (i) a false or deceptive appearance of active public trading in connection 5 with; or (ii) an artificial market price for, that security; approving or entering on a regulated market orders to buy a security listed on 10 that market at successively higher prices or orders to sell a security listed on that market at successively lower prices for the purpose of unduly or improperly influencing the market price of such security; approving or entering on a regulated market an order at or near the close of the market, the primary purpose of which is to change or maintain the closing 15 price of a security listed on that market; approving or entering on a regulated market an order to buy or sell a security listed on that market during any auctioning process or pre-opening session and cancelling such order immediately prior to the market opening, for the purpose of creating or inducing a false or deceptive appearance of demand for 20 or supply of such security; effecting or assisting in effecting a market comer; maintaining at a level that is artificial the price for dealing in securities listed on a regulated market; employing any device, scheme or artifice to defraud any other person as a 25 result of a transaction effected through the facilities of a regulated market; or engaging in any act, practice or course of business in respect of dealings in securities listed on a regulated market which is deceptive or which is likely to have such effect: Provided that the employment of price-stabilising mechanisms that are regulated in 30 terms of the rules or listing requirements of an exchange does not constitute a manipulative, improper, false or deceptive trading practice for the purposes of this section or insider trading for the purposes of sections 73 and 77. (4) A purchase or sale of securities listed on a regulated market does not, for the purposes of subsection (3)(a), involve a change in the beneficial ownership if a person 35 who has a beneficial interest in those securities before the purchase or sale, or a person associated with that person in relation to those securities, directly or indirectly holds a beneficial interest in those securities after the purchase or sale. False, misleading or deceptive statements, promises and forecasts 76. (1) No person may, directly or indirectly, make or publish (in respect of listed 40 securities, or in respect of the past or future performance of a public company- (a) any statement, promise or forecast which is, at the time and in the light of the circumstances in which it is made, false or misleading or deceptive in respect of any material fact and which the person knows, or ought reasonably to know, is false, misleading or deceptive; or (b) any statement, promise or forecast which is, by reason of the omission of a material fact, rendered false, misleading or deceptive and which the person knows, or ought reasonably to know, is rendered false, misleading or deceptive by reason of the omission of that fact. (2) A person who contravenes subsection (1) commits an offence. 45 50 86 No. 27190 GOVERNMENT GAZETTE, 24 JANUARY 2005 Act No. 36,2004 SECURITIES SERVICES ACT, 2004 Civil liability resulting from insider trading Civil liability 77. (1) An insider who knows that he or she has inside information and who- (a) deals directly or indirectly or through an agent, for his or her own account in the securities listed on a regulated market to which the inside information relates or which are likely to be affected by it; ( b ) makes a profit or would have made a profit if he or she had sold the securities at any stage, or avoids a loss, through such dealing; and (c) fails to prove, on a balance of probabilities, any one of the defences set out in section 73( l)(b), 5 10 is liable, at the suit of the board in any court of competent jurisdiction, to pay to the board- (i) the equivalent of the profit or loss referred to in paragraph (b); (ii) a penalty, for compensatory and punitive purposes, in a sum determined in the discretion of the court but not exceeding three times the amount referred to in 15 paragraph (i); (iii) interest; and (iv) costs of suit on such scale as may be determined by the court. ( 2 ) An insider who knows that he or she has inside information and w h o - (a) deals, directly or indirectly, for any other person in the securities listed on a 20 regulated market to which the inside information relates or which are likely to be affected by it; (b) makes a profit for that other person or would have made a profit if the securities had been sold at any stage, or avoids a loss, through such dealing; and fails to prove any one of the defences set out in section 73(2)(b) on a balance of probabilities, (c) is, subject to subsection ( 3 , liable, at the suit of the board in any court of competent jurisdiction, to pay to the board- (i) the equivalent of the profit or loss referred to in paragraph (b); (ii) a penalty, for compensatory and punitive purposes, in a sum determined in the discretion of the court but not exceeding three times the amount referred to in paragraph (i); (iii) interest; (iv) the commission or consideration received for such dealing; and (v) cost of suit on such scale as may be determined by the court. ( 3 ) An insider who knows that he or she has inside information and who- (a) discloses the inside information to any other person; and (b) fails to prove on a balance of probabilities the defence set out in section 73(3)(b), is, subject to subsection ( 5 ) , liable, at the suit of the board in any court of competent jurisdiction, to pay to the board- 25 30 35 40 (i) if the other person dealt in the securities listed on a regulated market to which the inside information relates or which are likely to be affected by it, the equivalent of the profit which the person made or would have made if the 45 securities had been sold at any stage, or the equivalent of the loss avoided, as a result of such dealing; (ii) a penalty, for compensatory and punitive purposes, in a sum determined in the discretion of the court but not exceeding three times the amount referred to in paragraph (i); 50 (iii) interest; (iv) the commission or consideration received for such disclosure; and (v) cost of suit on such scale as may be determined by the court. . c 88 No. 27190 GOVERNMENT GAZETTE, 24 JANUARY 2005 Act No. 36,2004 SECURITIES SERVICES ACT, 2004 (4) An insider who knows that he or she has inside information and who encourages or causes any other person to deal in the securities listed on a regulated market to which the inside information relates or which are likely to be affected by it is, subject to subsection ( 3 , liable, at the suit of the board in any court of competent jurisdiction, to pay to the board- ( a ) if the other person dealt in such securities, the equivalent of the profit which the person made or would have made if the securities had been sold at any stage, or the equivalent of the loss avoided, as a result of such dealing; (b) a penalty, for compensatory and punitive purposes, in a sum determined in the discretion of the court but not exceeding three times the amount referred to in paragraph (4; interest; (c) (d) the commission or consideration received for such encouragement; and ( e ) cost of suit on such scale as may be determined by the court. (5) If the other person referred to in subsections (2), (3) and (4) is liable as an insider in terms of subsection (l), the insider referred to in subsections (2), (3) and (4) is jointly and severally liable together with that other person to pay the amounts set out in subsection (2)(i), (iii) and (v), (3)(i), (iii) and (v), or (4)(a), (c) and (d), as the case may be. (6) The profit made, or the profit that would have been made if the listed securities had been sold at any stage, or the loss avoided, is determined in the discretion of the court which must have regard to factors such as the consideration for the dealing referred to in subsections (2), (3) and (4), the time between the relevant dealing and the publication of the inside information and any other relevant factors. (7) Any amount recovered by the board as a result of the proceedings contemplated in this section or as a result of an agreement of settlement must be deposited by the board directly into a specially designated trust account and- (a) the board is, as a first charge against the trust account, entitled to reimbursement of all expenses reasonably incurred by it in bringing such proceedings and in administering the distributions made to claimants in terms of subsection (8) and an additional sum equal to 10% of the gross amount so recovered less any amount of costs actually recovered from the other party prior to the finalisation of the distribution account; (b) the balance, if any, must be distributed by the claims officer to the claimants referred to in subsection (8) in accordance with subsection (9); (c) any amount not paid out in terms of paragraph (b) accrues to the board. (8) The balance referred to in subsection (7)(b) must be distributed to all claimants 5 10 15 20 25 30 35 who- ( a ) submit claims to the directorate within 90 days from the date of publication of a notice in two national newspapers inviting persons who are affected by the dealings referred to in subsections (1) to (4) to submit their claims; and 40 f b ) prove to the reasonable satisfaction of the claims officer that- (i) they were affected by the dealings referred to in subsections (1) to (4); and (ii) in the case where the inside information was made public within five trading days from the time the insider referred to in subsections (1) and (2), or the other person referred to in subsections (3) and (4) dealt, they dealt in the same securities at the same time or any time after the insider or other person so dealt and before the inside information was made public; or 45 50 (iii) in every other case, they dealt in the same securities at the same time or any time thereafter on the same day, as the insider or other person referred to in subparagraph (ii). (9) Subject to subsection (lo), a claimant must receive an amount- . 90 No. 27 190 GOVERNMENT GAZETTE, 24 JANUARY 2005 Act No. 36.2004 SECURITIES SERVICES ACT, 2004 (a) equal to the difference between the price at which the claimant dealt and the price, determined by the court or a settlement, that the claimant would have dealt if the inside information had been published at the time of dealing; or (b) equal to the pro rata portion of the balance referred to in subsection (7)(b), calculated according to the relationship which the amount contemplated in paragraph (a) bears to all amounts proved in terms of subsection (8) by claimants, 5 whichever is the lesser, unless the claims officer in his or her discretion determines that the claimant should receive a lesser or no amount. (10) An amount awarded in proceedings contemplated in section 85 must be deducted 10 from any amount claimed in terms of this section. (1 1) The common law principles of vicarious liability apply to the civil liability established by this section. Powers of directorate in civil proceedings 78. (1) The directorate may withdraw, abandon or compromise any civil proceedings 15 instituted in terms of section 77 but any agreement of compromise must be made an order of court and the amount of any payment made in terms of such compromise must be made public. (2) Where civil proceedings have not been instituted, any agreement of compromise may, on application to the court by the board after due notice to the other party or parties, 20 be made an order of court and the parties to the agreement and the amount of any payment made in terms of such agreement must be made public. Jurisdiction Procedural matters 79. (1) Only a High Court or a regional court has jurisdiction to try any offence 25 referred to in sections 73,75 and 76 and to impose a penalty up to the maximum set out in section 115(a). (2) For the purposes of subsection (1) and sections 77 and 81 a court of competent jurisdiction includes the court within whose jurisdiction the regulated market has its principal place of business or head office or in which any element of the dealing or 30 offence occurred and it is not necessary to make any attachment to found or confirm jurisdiction. Assessment of fines and penalties 80. (1) In the assessment of any penalty in terms of section 115(a), the court must take into account any award previously made under section 77 which afises from the same 35 cause. (2) In the assessment of any award under section 77, the court must take into account any penalty which arises from the same cause and previously imposed in terms of section 115(a). Attachments and interdicts 40 81. (1) On application by the board, a court may order the attachment of assets or evidence to prevent their concealment, removal, dissipation or destruction. (2) The board may institute any interdict or interlocutory proceedings against a person who made a profit or avoided a loss or whom the board reasonably believes may have made a profit or avoided a loss as contemplated in section 77. (3) Such proceedings may include proceedings to obtain an interdict to prevent the 45 disposal of assets or of evidence. 1 ( 8 . 92 No. 27190 ~~~ GOVERNMENT GAZETTE, 24 JANUARY 2005 Act No. 36,2004 SECURITIES SERVICES ACT, 2004 Administration of this Chapter Powers and duties of Financial Services Board 82. (1) The board is responsible for the supervision of compliance with this Chapter. (2) In addition to its powers in terms of the Financial Services Board Act the board may, subject to section 83- investigate any matter relating to an offence referred to in sections 73, 75 and 76, including insider trading in terms of section 440F of the Companies Act and the Insider Trading Act committed before the repeal of that section and that Act; institute such proceedings as are contemplated in this Chapter; administer the proof of claims and distribution of payments in terms of section 77; summon any person who is believed to be able to furnish any information on the subject of any investigation or to have in such person’s possession or under such person’s control any document which has bearing upon that subject, to lodge such document with the board, or to appear at a time and place specified in the summons, to be interrogated or to produce such document; and interrogate any such person under oath or affirmation duly administered, and examine or retain for examination any such document: Provided that any person from whom any document has been taken and retained under this subsection must, so long as such document is in possession of the board, at that person’s request and expense be allowed to make copies thereof or to take extracts therefrom at any reasonable time and under the supervision of the person in charge of the investigation; in relation to a matter investigated in terms of paragraph (a). on the authority of a warrant, at any time without prior notice- (i) enter any premises and require the production of any document; (ii) enter and search any premises for any document; (iii) open any strongroom, safe or other container which he or she suspects contains any document; (iv) examine, make extracts from and copy any document or, against the issue of a receipt, remove such document temporarily for that purpose; (v) against the issue of a receipt, seize any document; (vi) retain any seized document for as long as it may be required for criminal or other proceedings, but the board may proceed without a warrant, if the person in control of any premises consents to the actions contemplated in this paragraph; (g) make market abuse rules after consultation with the directorate- concerning the administration of this Chapter by the board and the directorate; concerning the manner in which investigations in terms of this Chapter are to be conducted; concerning the notification of amounts received in terms of sections 77, the procedure for the lodging and proof of claims, the administration of trust accounts and the distribution of payments in respect of claims; concerning meetings of the directorate; which are generally designed to ensure that the board and the directorate are able to perform their functions in terms of this Chapter; dealing with the manner in which inside information should be disclosed and, generally, with the conduct expected of persons with regard to such information: (h) after consultation with the relevant regulated markets in the Republic, require such markets to implement such systems as are necessary for the effective monitoring and identification of possible contraventions of this Chapter. , ’ 5 10 15 20 25 30 35 40 45 50 c 94 No. 27190 GOVERNMENT GAZETTE, 24 JANUARY 2005 Act No. 36,2004 SECURITIES SERVICES ACT, 2004 (3) (a) A warrant contemplated in subsection ( 2 ) v ) may be issued, on application by the board, by a judge or magistrate who has jurisdiction in the area where the premises in question are located. (b) Such a warrant may only be issued if it appears from information under oath that there is reason to believe that a document relating to the matter being investigated in terms of subsection (2)(a), is kept at the premises in question. (c) Any person from whom a document has been seized under subsection (2)(f), or such person’s authorised representative, may examine such document and make extracts therefrom under the supervision of the board during normal office hours. ( d ) Any person who has been duly summoned under subsection (2)(d) and who, 5 10 without sufficient cause- (i) fails to appear at the time and place specified in the summons; (ii) fails to remain in attendance until excused by the board from further attendance; (iii) refuses to take the oath or to make an affirmation as contemplated in 15 subsection (2)(e); (iv) fails to answer fully and satisfactorily any question lawfully put to him or her under subsection (2)(e); or (v) fails to furnish information or to produce a document in terms of subsection (2)(d), commits an offence and is liable on conviction to a fine or to imprisonment for a period not exceeding two years or to both a fine and such imprisonment. (4) The board may, subject to the conditions it may determine, delegate the power to investigate an alleged contravention of this Chapter to any fit person and such person has the powers set out in subsections (2)(d), ( e ) and (f). (5) The board must cause the publication in the Gazette of a notice of any proposed market abuse rule or amendment of such a rule, calling upon all interested persons who have any objections to the proposed rule or amendment, to lodge their objections with the board within a period of 14 days from the date of publication of the notice. (6) If there are no such objections or if the board has, after consultation with the directorate, considered the objections and has decided to introduce the proposed rule or amendment in the form published in the Gazette in terms of subsection (5), the rule or amendment comes into operation on a date determined by the board by notice in the Gazette. (7) If the board has, after considering such objections, decided after consultation with the directorate to amend the proposed rule or amendment as published in the Gazette in terms of subsection ( 3 , the proposed rule or amendment thus amended must be published by the board in the Gazette and comes into operation on a date determined by the board by notice in the Gazette. 20 25 30 35 (8) A rule made under subsection (2) is binding on regulated persons and members of 40 the public. (9) If the Director of Public Prosecutions declines to prosecute for an alleged offence in terms of this Chapter, the board may prosecute in respect of such offence in any court competent to try that offence and section 8(2) and (3) of the Criminal Procedure Act, 1977 (Act No. 51 of 1977), does not apply to such a prosecution. (IO) The board must, at the request of the directorate, investigate any matter and summon and interrogate any person in respect of the matters referred to in subsections (2)(a), ( 4 and (e). 45 Composition and functions of directorate 83. (1) (a) The Insider Trading Directorate established by section 12 of the Insider 50 Trading Act continues to exist, despite the repeal of that Act by section 117. (b) As from the commencement of this Act the Insider Trading Directorate referred to in paragraph ( a ) is known as the Directorate of Market Abuse and a reference to the Insider Trading Directorate in any law must, unless clearly inappropriate, be construed as a reference to the Directorate of Market Abuse. 55 (c) The directorate exercises the powers of the board- (i) to institute any civil proceedings as contemplated in this Chapter; . . 96 No. 27190 GOVERNMENT GAZETTE, 24 JANUARY 2005 Act No. 36,2004 SECURITIES SERVICES ACT, 2004 (ii) to investigate any matter relating to an offence referred to in section 8 2 ( 2 ) ( ~ ) ; and (iii) contemplated in section 82(2)(d), (e) and (f, in the name of the board. (d) The directorate is not intended to act as an administrative body when exercising its powers referred to in paragraph (c). ( e ) The directorate must- 5 (i) report quarterly to the board and the Minister on its activities in terms of this Chapter; and (ii) furnish the board and the Minister, at their request, with copies of such documents and records of proceedings of the directorate, as the board or the Minister may direct. 10 (2) (a) The directorate consists of the chairperson and the other members and alternate members appointed by the Minister. (b) A member and alternate member hold office for such period, not exceeding three years, as the Minister may determine at the time of his or her appointment and is eligible for reappointment upon the expiry of his or her term of office: Provided that if on the expiry of the term of office of a member reappointment is not made or a new member is not appointed, the former member must remain in office for a further period of not more than six months. (c) The Minister may remove the chairperson from his or her office or terminate the membership of any other member on good cause shown and after having given the chairperson or member, as the case may be, sufficient opportunity to show why he or she should not be removed or why his or her membership should not be terminated. 15 20 (3) The Minister must appoint as members of the directorate- (a) the executive officer of the board or his or her deputy, or both; (b) one person and an alternate from each of the regulated markets in the 25 Republic; (c) one commercial lawyer of appropriate experience and an alternate; (d) one accountant of appropriate experience and an alternate; ( e ) one person of appropriate experience and an alternate from the insurance 30 cfl one person of appropriate experience and an alternate from the banking industry; industry; (g) one person of appropriate experience and an alternate from the fund management industry; ( h ) one person of appropriate experience and an alternate nominated by the Share Holders’ Association of South Africa or any other similar organisation chosen by the Minister; (i) one person of appropriate experience and an alternate nominated by the SA Reserve Bank; and 35 40 (j) two other persons of appropriate experience and alternates. (4) The persons referred to in subsection (3) are nominated by reason of their availability and knowledge of financial markets and may not be practising authorised users. (5) The directorate must designate from its members a deputy chairperson who performs the functions of the chairperson when the office of chairperson is vacant or when the chairperson is unable to perform his or her functions. 45 (6) The members of the directorate may co-opt one or more persons as additional members of the directorate. (7) All members of the directorate, other than the additional members, have one vote in respect of matters considered by the directorate, but an alternate member only has a vote in the absence from a meeting of the member whom the alternate is representing. (8) The meetings of the directorate are held at such times and places as the chairperson may determine, but four members of the directorate may by notice in, writing to the chairperson of the directorate demand that a meeting of the directorate be, held within seven business days of such notice. (9) The chairperson must determine the procedure of a meeting of the directorate. (10) The decision of a majority of the members of the directorate constitutes the 50 5 5 , decision of the directorate. (11) NO proceedings of the directorate are invalid by reason only of the fact that a vacancy existed on the directorate or that any member was not present during such proceedings or any part thereof. 60 c . 98 No. 27 I90 GOVERNMENT GAZETTE, 24 JANUARY 2005 Act No. 36,2004 SECURITIES SERVICES ACT, 2004 (12) The directorate is, in the performance of its functions, assisted by an executive director who is appointed by the board after consultation with the directorate and who may attend all meetings of the directorate but may not vote at such meetings. Financing of directorate
