Investec launches new SA Market Surveillance Code of Conduct 

At an important conference this week, Investec presented The South African Market Surveillance Code of Conduct. Three years in the making, this new Code encourages a set of standards defined by key financial services institutions, regulatory bodies and other appropriate authorities. The aim of the code is to promote fit and proper conduct across the financial services industry, to hold financial markets to the highest of global best standards and to ensure they are not susceptible to market abuse, manipulation, anticompetitive or illegal trading practices. 

Speaking at the event, Thulani Kunene, Group Head of Compliance for Investec, explained that the code is about driving integrity through collaboration and building a unified market standard. He said it’s been about developing best practices to create lasting value, and that effective surveillance is a must-have for this space.  

Importantly, the Code was developed in collaboration with market players, including the regulators, which was identified as key to its success. “Market surveillance serves as our first line of defence against potential threats, ensuring our markets remain transparent and trustworthy,” says Cumesh Moodliar, Investec South Africa CEO. “Safeguarding our financial systems cannot be done in silos, it requires all market participants within the ecosystem to work closely together to ensure effective risk management and mitigation against potential market abuse.”

Thembo Maseko, Head of Global Markets and Investment Banking Compliance at Investec agrees. “It’s not solely the role of the regulators to drive this initiative; all stakeholders in South Africa must play their role to ensure our markets uphold the highest integrity to attract investment. This in turn will create more jobs and address some of the social issues that are holding our country back.”

Nedbank will take the baton from Investec in terms of moving forward as the Code will be periodically reviewed and updated to remain responsive to evolving global standards, technological innovation, regulatory reform, and the dynamic needs of the market.

Why oversight is essential

Nasdaq and SteelEye were sponsors of the event, and Tony Sio, Head of Regulatory Strategy and Innovation at Nasdaq shared some eye-opening case studies of the fraudulent activity he has come across, including the use of secondary insider trading, AI and social media to instigate massive illegal money-making schemes off the stock market, showing that oversight and regulation is more important now than ever.

To whom does the The South African Market Surveillance Code of Conduct apply?

The code applies to all financial market participants that trade on a South African licensed stock exchange. The code can be expanded to include other financial service providers or any person that may deem it appropriate to comply with the principles contained in the code.

The objectives and principles

The objectives of the code are to:

• Ensure that the financial market participants are conducting their trading activities in a fair and ethical manner.
• Establish and maintain a common set of guidelines that the financial market participant can follow to ensure consistency and standardisation in their framework to address market abuse.
• Promote market integrity by ensuring that all financial market participants are operating on a level playing field.
• Demonstrate that financial market participants of the exchanges who are signatories are committed to ethical practices which will help build trust and confidence in the South African market and promote market integrity.