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OWNERSHIP OF A COMPANY’S SECURITIES REGISTER AND THE INFORMATION CONTAINED THEREIN

OWNERSHIP OF A COMPANY’S SECURITIES REGISTER AND THE INFORMATION CONTAINED THEREIN. ESTABLISHMENT OF THE SECURITIES REGISTER.

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OWNERSHIP OF A COMPANY’S SECURITIES REGISTER AND THE INFORMATION CONTAINED THEREIN

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  1. OWNERSHIP OF A COMPANY’S SECURITIES REGISTER AND THE INFORMATION CONTAINED THEREIN

  2. ESTABLISHMENT OF THE SECURITIES REGISTER • Section 50(1) of the Companies Act, No. 71 of 2008 (as amended) (the “Companies Act”) provides that every company must establish or cause to be established a register of its issued securities. • Section 50(3) of the Companies Act further provides that if a company has issued uncertificated securities, or has issued securities that have ceased to be certificated, a record must be administrated and maintained by a participant or a central securities depository.

  3. CASE LAW • La Lucia Sands Share Block Ltd & Others v Barkhan & Others 2010 (6) SA 421 (SCA). • Bernstein & Others v Bester & Others NNO, 1996 (2) SA 751 (CC). • Notwithstanding the judgments of Bernstein and La Lucia Sands, the Legislature has created specific legislation in order to entrench the mechanisms for accessing information relating to a company.

  4. ACCESS TO THE SECURITIES REGISTER • The Companies Act specifies in what circumstances information relating to the company, particularly the share register, may be disclosed. • Section 52 of the Companies Act – a person who wishes to inspect an uncertificated securities register may only do so through the relevant company (my emphasis) and in accordance with the rules of the central securities depository.

  5. ACCESS TO THE SECURITIES REGISTER • Section 26(1) of the Companies Act contains the right of a person who holds or has a beneficial interest in any securities to inspect and copy, without charge, certain specified information. • Section 26(2) of the Companies Act contains the right to inspect and copy a securities register by a person other than that referred to in section 26 (1) i.e. a person who does not hold or have a beneficial interest in the company’s securities.

  6. THE FINANCIAL MARKETS ACT, 2012 • Section 73 of the Financial Markets Act, No. 19 of 2012 (the “Financial Markets Act”) - disclosure of information. • Section 73 (1) and 72 (2) of the Financial Markets Act distinguishes between the disclosure of information vs. the disclosure of confidential information. • Confidential Information is defined in section 1 of the Financial Markets Act as “personal information that belongs to a person and is not generally available or known by others”.

  7. THE FINANCIAL MARKETS ACT, 2012 • Section 73 (1) – a market infrastructure may not disclose confidential information to any person unless certain requirements are met. • Section 73(2) - a market infrastructure may disclose information relating to or arising from its functions to any market infrastructure or supervising authority, if such disclosure will further one or more objects of the Financial Markets Act.

  8. THE FINANCIAL MARKETS ACT, 2012 • A market infrastructure is defined in section 1 of the Financial Markets Act. • The definition of “market infrastructure” does not include brokers or the investment community in general.

  9. THE FSB GUIDELINES • The Financial Services Board (“FSB”) has issued guidelines regarding the interpretation of section 73 of the Financial Markets Act. • The FSB Guidelines set out which information is regarded as confidential for purposes of section 73 (1) of the Financial Markets Act.

  10. OTHER LEGISLATION • The Protection of Personal Information Act, No. 4 of 2013 (the “Protection of Personal Information Act”) has been assented to but is yet to commence. • The Protection of Personal Information Act promotes the protection of personal information processed by public and private bodies.

  11. CONCLUSION The securities register of a company and the information contained therein – • belongs to the company; • may only be accessed through the company; and • may not be disseminated indiscriminately by Strate.

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