By Evarist Baimu Nyaga Mawalla - Home

The code is therefore framed in non-technical language and is primary as a measure ofself-disciplineAdministered and enforced by the panel. A body representative of those using thesecurities markets and concerned with the observance of good business standards ratherthan the enforcement of the law as indicated above the panel executive is alwaysavailable to be consulted and where there is doubt this should be done in advance of anyaction. Taking legal or other professional advice on matters of interpretation under thecode is not an appropriate alternative to obtaining a view or a ruling from the executive.Self-regulation is an emotive term it is also ambiguous. An individual who voluntarilyregulates his life in accordance with started principle because he believes that this ismorally right and also perhaps in his own long term interests or a group of individualswho do so are practicing self-regulation. But it can mean something quite different. Itcan connote a system whereby a group of people, acting in concert, use their collectivepower to force themselves and others to comply with a code of conduct of their owndevising. This is not necessarily morally wrong or contrary to the public interest.Unlawful or even undesirable. But it is very different.The panel is a self-regulating body in the latter sense. Lacking any authority dejure, It exercises immense power de facto by devising promulgating, amending andinterpreting the city code on take-overs and mergers by waiving or modifying theapplication of the code in particular circumstances, by investiagating and reporting uponalleged breaches of the code and by the application or threat of sanctions. These sanctionsare no less effective because they are applied indirectly and lack a legally enforceablebase. Thus to quote again from the introduction to the code.If there appears to have been a material breach of the code, the executive invitesthe person concerned to appear before the panel for a hearing. He is informed by letter ofthe nature of the alleged breach and of the matter which the director general will present.If any other matters are raised he is allowed to ask for an adjournment if the panel findsthat there has been a breach, it may have recourse to private reprimand or public censureor, in a more flagrant case to further action designed to deprive the offender temporarilyor permanently of his ability to enjoy the facilities of the securities markets.The panel may refer certain aspects of a case to the Department of Trade and Industry,the Stock Exchange or other appropriate body. No reprimand, censure or further actionwill take place without the person concerned having the opportunity to appeal to theappeal committee of the panel.The unspoken assumption, which I do not doubt is a reality, is that the Department ofTrade and Industry or, as the case may be, the Stock Exchange or other appropriate bodywould in fact exercise statutory or contractual powers to penalize the transgressors. Thus,for example, rules 22 to 24 of the Rules of the Stock Exchange (1984) provide for theseverest penalties, up to and including expulsion, for acts of misconduct and by rule 23.1151