SA market surveillance framework to combat misconduct

South Africa’s key financial services institutions, regulatory bodies, and other authorities have come together to establish a robust market surveillance framework following the Investec Market Surveillance conference. The conference served as a platform to address critical issues concerning market manipulation and ensure the integrity of the South African financial market. Themba Maseko, Market Surveillance Senior Analyst at Investec Bank, joined CNBC Africa to discuss the significance of the newly proposed Market Surveillance Code of Conduct and shed light on the key objectives it aims to achieve. The Market Surveillance Code of Conduct was conceptualized as a response to the need for improved industry practices and adherence to global standards within South Africa's capital market. The framework is designed to outline fundamental principles that all exchange members should embrace. By referencing international best practices and customizing them to suit the local operating environment, the code seeks to enhance the credibility of the South African financial market and attract investment from various jurisdictions. The draft code, presented at the conference, underwent thorough deliberations and is set to incorporate feedback from stakeholders to ensure its effectiveness and relevance moving forward. Central to the concept of market surveillance is the vigilance against market abuse, particularly in a sophisticated market landscape like South Africa's. Market abuse encompasses activities such as insider trading, price manipulation, and disseminating misleading information to influence securities. Maseko emphasized the importance of not only defining market abuse but also enforcing measures to combat it effectively. One of the key challenges lies in aligning policy directives with practical surveillance strategies and ensuring that compliance officers and regulators possess the necessary expertise to identify and penalize illicit activities. A critical aspect of contemporary market surveillance involves leveraging technology, including artificial intelligence and digital platforms, to enhance monitoring capabilities. While technology facilitates broader market participation and accessibility, it also introduces new risks, especially for vulnerable clients. Maseko highlighted the need to strike a balance between fostering market inclusivity and safeguarding less experienced investors from potential exploitation. The ongoing discourse among industry stakeholders revolves around devising mechanisms to shield retail customers from predatory practices without impeding their market engagement. As South Africa navigates the dynamic landscape of financial market surveillance, the collaborative efforts of regulatory bodies, financial institutions, and technology providers will be pivotal in fostering a transparent and secure trading environment. The commitment to upholding the Market Surveillance Code of Conduct reflects a collective dedication to preserving market integrity and instilling confidence among investors. Moving forward, continued dialogue and proactive measures will be essential to adapt to evolving market dynamics and mitigate misconduct effectively.