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The South African Financial Markets Journal
18th Edition May 2013
In this Edition . . . .
Regionalisation: Africa's open door to the global community Treating customers fairly
Popular opinion is in favour of the business case for the integration of financial markets in Africa. There has been a marked perceptual slant towards consideration and consensual acceptance of Africa as an economic super-power poised for take-off. The World Bank has even voiced the same sentiments with analogies to India and China . . . . .read full article I am often asked what impact, if any, the FSB's developing Treating Customers Fairly (TCF) framework will have on financial markets practitioners – in particular investment advisers, investment managers and stockbrokers respectively . . . . .read full article
Financial market infrastructures Is your index manager too passive aggressive?
There were few heroes of the 2007/08 financial crisis. Financial market infrastructures, sometimes called the plumbing of the global financial system, were such heroes and moved from back-office obscurity to front-page prominence. When Lehman Brother sought Chapter 11 bankruptcy protection from its creditors in the United States on 15 September 2008, trillions worth of transactions conducted across the world by and through the investment bank and its subsidiaries were in jeopardy . . . . . read full article Direct and indirect costs associated in managing investments have an impact on performance BUT not all costs are reported, calculated or presented, leaving the investor with the responsibility of choosing the most appropriate investment. There are other factors that affect performance too, such as trade timing, dividend reinvestment, cash drag etc. all impacting the manager's ability to mirror the underlying index as closely as possible . . . . read full article
Duties of Trustees Better corporate reporting, better decisions
The duties of a retirement trustee include the duty to have knowledge of certain aspects of retirement funds and trusteeship, also called the 'duty to know', the duty to administer retirement funds in a manner that is beyond reproach, and the duty to act with care, diligence and in good faith  . . . . read full article The integrated report fits our modern day world because can the informed investor really invest in a company looking at its financial performance in isolation of the many and varied factors that can exert great influence on the company's financial future? . . . . read full article
Business judgment rule Are investors rational?
The business judgment rule' has been heralded by many as the key form of protection for directors, and allows them to make informed judgments without the threat of liability hanging over their heads and seeks to protect directors from liability to the company and shareholders as a result of poor decision-making . . . .read full article In traditional finance, people are cold, calculating analytical machines. In the behavioural version of events, they are chaotic and emotional, and prone to a colourful collection of human failings. Investors are overconfident, excitable and lazy. Lots of things frighten them: regret, loss, change, doing statistics. They frequently make shockingly poor investment decisions. . . . . read full article
Denial and retirement savings insanity How much is your electronic signature worth?
Planning on dying is not a retirement plan. Planning not to retire is also not a retirement plan. Consider age discrimination, finding or keeping a job, physically working into your 70's. There's nothing wrong with not retiring, but relying on a regular pay-check to fund retirement is simply an exercise in denial, not a realistic plan . . . .read full article Advancements in technology have modernised the traditional and familiar ways of doing business. Parties no longer have to be in one room or in the same country to conclude transactions. This also relates to the execution and signature of documents, particularly where the signatories are in different locations or countries. . . .read full article
Balancing investment regulation and cost Financial planning: A career to satisfy most of your needs
The South African investment industry is no stranger to regulation. However, on the back of the global financial crisis, the speed and extent of new regulation – particularly around investor protection – being set for the investment industry has the potential to create new problems as fast as it addresses the old ones . . . . read full article Being a financial planner can be a rewarding career, but it demands a high level of knowledge and skills. When deciding on financial planning as a career consider how interested you are in finance and investments, as well as your aptitude for mathematics and learning new technology. Are you willing to start at the bottom and work your way up? . . . .read full article
A career in commodities The career of a compliance officer
"Today is the day", I am quietly thinking to myself, "the day I will finally get to see the famous 'trading pits' at the Chicago Board of Trade". I can vividly picture the art deco-styled building in my mind's eye, having viewed it the previous day, and I feel anticipation building for the day to come . . . .read full article A compliance officer is someone with an expense account for Prozac! It is also someone whose job description sounds worse than that of an actuary but who, in fact has an unbelievably stimulating and diversified function . . . .read full article
What it takes to become an economist Strate's Q&A on Risk Management
An economist is an expert in the study of the production, distribution and application of resources who provides clients with support, advice and information about global and domestic economic prospects. This includes the identification of threats and opportunities in the business environment and economy at large. Sometimes an economist would also monitor, report on and, where possible, influence developments and government policy in his or her particular field of involvement . . . . read full article While not specifically a settlement guarantee, the South African market works on the principle of Simultaneous Irrevocable Delivery versus Payment (SFIDvP), which means that only those transactions that are ready to be settled are, in fact, submitted for settlement. The South African market has not had a single failed on-market transaction since the introduction of Strate . . . . .read full article
JSE moves to Nova FTSE JSE Africa series Chinese fund manager
The Johannesburg Stock Exchange (JSE) has rolled out a new web-based portal called Nova through which JSE market data clients can report their monthly usage of JSE data direct to the exchange . . . . read full article A letter of intent, for an index product licence with Chinese fund manager GF Fund Management Co to create exchange traded funds (ETFs) based on the FTSE/JSE Top40 Index was signed by the JSE. This signifies closer ties between South Africa and China's financial markets . . . . .read full article
How to read the share pages Five for first timers
The world of investing is made a lot more complicated by the vocabulary used. In this article we look at common but often misunderstood financial information – the share pages that are found in the business sections of many national newspapers . . . . read full article The world of investment can be daunting. Faced with unfamiliar concepts and the thought of potentially losing hard-earned cash, many would prefer to hide their money under the proverbial mattress . . . . .read full article


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