What would you do if your bank insisted that you move from a superior service provider to their inferior platform, simply because you were an employee?
This is a question that has been front of mind for an employee at Nedbank who was recently told he could elect to either transfer his account to Nedbank and trade of his own free will or he could keep his Standard Bank Online Share Trading (OST) account provided he signed a mandate to say that Standard would manage his account for him.
Nedbank are trying to enforce this through the PATP (personal account trading policy) and are threatening staff with disciplinary action should they not comply. Staff were given a period of grace to com- ply, but this has now expired.
A Nedbank insider told Finweek : “I understand the risk of having an employee trading through a system outside the bank’s control. This could be an avenue for insider trading and they would all see the trades and get the monthly statement so any impropriety on my part would be instantly highlighted so I don’t understand their attitude.”
Nedbank spokesperson Sizwekazi Jekwa initially told Finweek that in her experience Nedbank does not generally force or compel staff to subscribe to Nedbank products.
However, when asked about the PATP, she responded saying: “I can confirm that Nedbank does indeed have a Personal Accounting Trading Policy that compels employees to have their trading account with Nedbank. All banks have a similar policy around trading accounts to protect against insider-trader risks. The policy would even apply to every member of staff, including [CEO] Mike Brown.”
She says that this wouldn’t come from the human resources department but rather it’s decided by the group risk and compliance teams. “All employees who trade shares are required to have a Nedbank Online Trading account so that the bank can track all transactions if an insider issue emerges.”Jekwa added: “The non-executive directors are excluded from compliance with PATP especially as t heir dealings in shares are governed by very strict regulatory requirements imposed on directors in terms of JSE listing requirements.”
This seems to be a bit of a contradictory statement saying that employees may be exposed to insider information but the non-executive directors aren’t.
Nedbank and t he South African Reserve Bank (Sarb) say that this policy extends to “connected” people, which includes spouses, family members, pension funds and trusts where the Nedbank employee may be a beneficiary.
While Finweek appreciates the sentiment, it sounds more like a way to compel 28 000 employees and extended family to use a Nedbank platform rather than management of risk.
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