The Catalist Electronic Transfer System is the system controlled and administered by Catalist Markets Limited for the electronic transfer of specified financial products. The essential requirements of the system are the following:
Connecting to system
(a)
a user or a user’s authorised representative may access the system only—
(i)
after agreeing to the user terms and conditions; and
(ii)
through the user’s or authorised representative’s electronic account using the ETS Internet site:
(b)
each user’s and authorised representative’s electronic account must be protected by a password and encryption, and dual-factor authentication is required every time an order is submitted:
Electronic submission of order for specified financial product
(c)
to submit an order relating to specified financial products, a user or their authorised representative must electronically enter (or electronically confirm) the following information and instructions:
(i)
the name of the specified financial products:
(ii)
the name of the Catalist issuer:
(iv)
whether the order is for the disposal or the acquisition of the specified financial products:
(v)
the maximum number of the specified financial products to which the order applies:
(vi)
the maximum purchase price that may be paid (if the order is for the acquisition of the specified financial products):
(vii)
the minimum sale price that may be accepted (if the order is for the disposal of the specified financial products):
(d)
by submitting an order, a user irrevocably authorises Catalist Markets Limited to do the following if the order results in a transaction for the user:
(i)
transfer the specified financial products in accordance with the information and instructions submitted under paragraph (c); and
(ii)
make any payment required for the transaction in accordance with the user terms and conditions:
(e)
an order by a transferor for disposal of specified financial products may be accepted only after Catalist Markets Limited has verified that the transferor is the product holder of the specified financial products:
Electronic transfer of specified financial products
(f)
every user authorises Catalist Markets Limited to effect transfers of specified financial products and to make any payments necessary to effect these transactions, and this authorisation is irrevocable:
(g)
Catalist Markets Limited must transfer specified financial products in accordance with the final results of an auction:
(h)
the results of an auction are final when the auction has been closed and every cleared payment is held on trust, in accordance with the user terms and conditions, for the amounts due to every user who, under the results of the auction, is a transferor:
(i)
if Catalist Markets Limited is acting as the registrar in relation to the specified financial products, the system transfers the specified financial products by subtracting the relevant number of specified financial products from the transferor’s electronic account and adding that number of specified financial products to the transferee’s electronic account:
(j)
if Catalist Markets Limited is not acting as the registrar in relation to the specified financial products, Catalist Markets Limited must issue instructions to the relevant registrar through a secure, prearranged connection to update the register with the changes to holdings of the specified financial products:
(k)
each user is able to view their holding of the specified financial products through their electronic accounts immediately after the transfer of the specified financial products has been recorded on the ETS Internet site in accordance with the final results of an auction:
(l)
before a payment can be transferred out of Catalist Markets Limited’s trust account, the payment must be authorised by 2 individuals authorised for that purpose by Catalist Markets Limited:
(m)
the settlement of a transaction made using the system is final and irrevocable:
(n)
Catalist Markets Limited must maintain a complete record of all of the transactions made using the system, including the data from auctions that result in the transfer of the specified financial products:
Further requirements
(o)
each user must indemnify the following persons against all losses and damages suffered, and costs and expenses incurred, resulting from the wrongful transfer of specified financial products that occurs because of a breach of the user terms and conditions by the user:
(i)
Catalist Markets Limited:
(iv)
every other person who has a beneficial interest in specified financial products that are or may be traded in an auction:
(p)
Catalist Markets Limited must require a Catalist issuer that keeps its own register (or a third party that keeps a register on behalf of a Catalist issuer) to have adequate business processes and controls to prevent operational errors, and an appropriately secure system for communications with Catalist Markets Limited relating to the register:
(q)
Catalist Markets Limited must have systems in place to ensure that,—
(i)
at least once a year, technical testing of the system is carried out by a person who is suitably qualified and independent of Catalist Markets Limited:
(ii)
the independent person prepares a report that states whether, in the independent person’s opinion, there is reasonable assurance that the system is suitably designed to meet the essential requirements set out in this schedule and has operated effectively throughout the period since the system was first operated or since testing was last carried out (whichever is the most recent):
(iii)
the independent person’s report is provided to the FMA as soon as practicable after the testing is carried out.