Vol. 444 Cape Town 28 June 2002 No.
2002 in Parliament during the third Parliamentary term. The Bill is published in accordance with Rule241(c) of the Rules of the National Assembly. Interested persons and institutions are invited to submit written representation on the Bill to the Secretary to Parliament by no later than19 July 2002.
You can contact Messrs A Hermans or J Michaels at: Fax: (021) 462 2141 Tel: (021) 403 3776/3806 Email: ahermansOparliament.gov.za jmichaelsQparliament.gov.
To regulate and control the establishment and administration of collective investment schemes; to amendor repeal certain laws; and to provide €orincidental matters.
Void provisions of deed and amendment of deed 10 99.
Winding-up of portfolio of collective scheme investment 15 103.
Application of Companies Act in relation to manager 25 112.
Exemption from Act 57 of 1988 114.
Penalties 30 117.
the management or control of a collective investment scheme; fb) the receipt, payment or investment of money or other assets, including income accruals, in respectof a collective investment scheme; fc) the sale, repurchase, issue or cancellation of a participatoryinterestina collective investment scheme; and (dl the buying and selling of assets or the handing over thereof to a trustee or custodian for safe custody; "advisory committee"means the CollectiveInvestment Schemes Advisory Committee referred to in section 8; "assets"means the investments comprising or constituting aportfolio of a collective investmentscheme and includes anyincome accruals derived or resulting from the investments in the portfolio which are held for or are due to the investors in that portfolio; "association" means an association licenced in terms of section 26; "auditor" means a person registered under the Public Accountants' and Auditors' Act, 199 1 (Act No. 80 of 199 l), and appointed by a manager in termsof section 73; "authorised agent" means a person authorised by a manager to solicit investments in a portfolio from membersof the public or to perform a function contemplated in the definition of "administration"; "Board" means the Financial ServicesBoardestablished by section 2 of the Financial Services Board Act, 1990 (Act No. 97 of 1990); "close corporation" means a close corporation incorporated in accordance with the Close Corporations Act, 1984 (Act No.
the investors share the risk and the benefit of investment in proportion to their participatory interest in a portfolio of ascheme or on anyother basis determined in the deed, but not a collective investment scheme authorised by any other Act; "company" means acompanyincorporated or registered under the Companies Act, 1973 (Act No. 61 of 1973): "court" means any division of the High Court of South Africa having jurisdiction; "custodian" means a custodian appointed in terms of section 68; "deed" means the agreement between a managerand a trustee or custodian, or the document of incorporation whereby a collective investment scheme is established and in terms of which it is administered, and includes the deed of a management company which immediately prior to the commencement of this Actwas a management company in terms of any law repealed by this Act; "exchange" means an exchange licenced under the Stock Exchanges Control Act, 1985 (Act No. 1 of 1985), the Financial Markets Control Act, 1989 (Act No.
"solicit"means any act to promote investment by members of thepublic in a investment collective "this Act" includes a regulation, notice, rule and any other measure having the force of law made under this Act; ''trustee" means the trustee appointed in terms of section 68.
A manager must administer a collective investment scheme honestly and fairly, with skill, careanddiligence and in the interest of investors andthecollective investment scheme industry.
The assets of an investor must beproperly protected by application of the principle of segregation and identification.
information that the manager considers necessary to enable the investor to make an informed decision must be given to the investor timeously and in a comprehensible manner.
The manager must avoid conflict between the interests of the manager and the interests of an investor.
(2)The manager must disclose the interests of its directors and management to the investors.
A manager must maintain adequate financial resources to meet its commitments and to manage the risks to which its collective investment scheme is exposed.
f, i promote investor education, either directly or through initiatives undertaken by an association.
is exempted from the provisions of this Act by the registrar by notice in the Gazette.
Subject to subsection (2), no person may, except if registered as a manager under this Act, or with the specific permission of the registrar pending the lodging and disposal of an application by such person for registrationas a manager under this Act, or pending the change of the name of his or her business, include in or have aspart of the name of his or her business or in any description of his or her business any reference to a collective investment scheme, open-ended investment company, participatory interest, portfolio, unit, unit trust or mutual fund or any derivative thereof, and no person who is not registered as a manager or trustee or custodian under this Act or is not an authorised agent may do any act calculated to lead the public to believe that any business carried on by such person consists of or is connected with the administration of a collective investment scheme.
(2)The registrar may on application by a person who is required to change his orher name by virtue of subsection (1) allow such person to effectsuchchange on the conditions and within a period, not exceeding 6 months, determined by the registrar.
(3)A person who contravenes subsection (1) is guilty of an offence.
The executive officer and a deputy executive officer referred to in section 1 of the FinancialServicesBoard Act, 1990 (Act No. 97 of 1990), aretheregistrarandthe deputy registrar of collective investment schemes, respectively.
The Unit Trusts Advisory Committee established by section 2B of the Unit Trusts Control Act, 1981 (Act No. 54 of 1981), continues to exist, despite the repeal of that Act by section 117.
(2)As from the commencement of this Act the Unit Trusts Advisory Committee referred to in subsection (1) is known as the Collective Investment Schemes Advisory Committee (in this Act referred to as the advisory committee) and a reference to theUnit Trusts Advisory Committee in any law must, unless clearly inappropriate, be construed as a reference to the CollectiveInvestmentSchemes Advisory Committee.
The members of the Unit Trusts Advisory Committee who were inoffice as such immediately before the commencementof this Act remain in office for the remainder of their term of office or until their membership is terminated in terms of this Act.
The advisory committee consists of the chairperson and at least nine other members appointed by the Minister.
one person to represent the interests of investors.
(3)A member of the advisory committee holds office for three years and is eligible for re-appointment upon the expiration of his or her period of office: Provided that if on the expiry of the period of office of a member reappointment is not made or a new member is not appointed, the former member must remain in office until an appointment has been made.
The Minister may terminate the membership of a member of the advisory committee for good reason after having given the member sufficient opportunity toshow why his or her membership should not be terminated.
(2)The advisory committee must advise the Minister or the registrar on any matter referred to it by the Minister or the registrar.
(3)The registrar may submit to the advisory committee any information in his or her possession which is relevant to any matter beinginvestigated or considered by the advisory committee.
The Commissions Act, 1947 (Act No. 8 of 1947), applies to any investigation by the advisory committee and witnesses and their evidence as if the advisory committee were a commission to which the said Act applied and the chairperson of the advisory committee were the secretary of such a commission.
(5)The advisory committee may call upon any person to assist it or to investigate a matter relating to collective investment schemes.
Officers or employees in the office of the registrar designated by the registrar must perform the administrative work incidental to the performance of the functions of the advisory committee and its subcommittees.
The advisory committee must determine the date and place of its meetings.
The chairperson may at any time convene an extraordinarymeeting of the advisory committee to be held at a time and place determined by him or her.
The advisory committee determines its own procedure for its meetings.
The quorum fora meeting of the advisory committee is a majority of its members.
The decision of a majority of the members of the advisory committee present at any meeting thereof is the decision of the advisory committee, and in the case of an equality of votes, the chairperson has a casting vote in addition to his or her deliberate vote.
The advisory committee may appoint one or more subcommittees, which may performthosefunctions of the advisory committee thatthe advisory committee determines.
(2)A subcommittee consists of so many members of the advisory committee or so many other persons as the advisory committee considers necessary, and the advisory committee may at any time dissolve or reconstitute a subcommittee.
A member of the advisory committee who is not in the full-time employment of the State or the Board must be paid the remuneration and allowances in respect of any expensesincurred in the performance of the functions of the advisory committee, determined by the Board.
The expenditure connected with the functions of the advisory committee must be paid out of the funds of the Board, whose approval must be obtained for all expenditure proposed to be incurred, or actually incurred, by the advisory committee.
The registrar may conduct an investigation into the business of a person, whether registered or authorised in terms of this Act or not, who is involved in the administration of a collective investment scheme or the soliciting of investment in a collective investment scheme.
appear before the registrar at a specified time and place if he or she has reason to believe that such person is contravening or failing to comply with this Act.
In addition to the powers and duties conferred or imposed upon him or her by this Act. the registrar has. in respect of a person referred to in subsection (l), all the powers and duties conferred or imposed upon him or her by the Inspection of Financial Institutions Act, 1998 (ActNO. 80 of 1998).
(3)A reference in this Act to a directive, an investigation or an inspection made under this section is construed as a reference to a directive, an investigation or an inspection under the Inspection of FinancialInstitutions 1998.
If the registrar, after an investigation or inspection under section 13.
apply to the court under section 346 of the Companies Act. I973 (Act No.
apply to the courtunder section 427(2) of the Companies Act.
apply to the court under section 5 of the Financial Institutions (Protection of Funds) Act, 2001 (Act No.
require a manager to take steps, in accordance with the registrar's directions and the provisions of section 102, for the winding-up of a portfolio of its collective investment scheme, therealisation of the assets, and the distribution of the net proceedsthereof, together with any income accruals or other 55 moneys available for distribution among the investors in proportion to their respective participatory interests: direct a manager or a trustee or custodian to take any steps, or to refrain from doing or continuing to do any act, in order to terminate or remedy any irregularity or undesirable practice or state of affairs disclosed by an investigation or inspection; direct a manager to withdraw from the administration of a collective investment scheme. whereupon the trustee or custodian must in accordance with the registrar's directions, but subject to thisAct, arrangeforanother manager to take over the administration of the collective investment scheme: or if a person administers a collective investment scheme in contravention of this Act, apply to the court to have the collective investment scheme wound-up, in which case the court may make any order it considersappropriate for the winding-up of the collective investment scheme.
The registrar may oppose any application in terms of the Companies Act, 1973 Act No.
the winding-up of a portfolio of a collective investment scheme in terms of section 102.
Any person who intends to make an application contemplated in subsection (3) must give timely notice of such application to the registrar.
(4)A person who refuses or fails to comply with a request or direction referred to in paragraphs (d),(e),(J) or (g)of subsection (1) is guilty of an offence and on conviction liable to a fine or to imprisonment for a period not exceeding one year or to both a fine and such imprisonment.
if he or she is satisfied, upon completion of an investigation or inspection in terms of section 14.
if a manager is wound-up. either voluntarily or by the court, or may, on any ground referred to in paragraph (a).(h)or (c) suspend the registration of a manager for a period not exceeding I2 months at a time subject to such conditions as the registrar may determine.
afforded the manager a reasonableopportunity to rectify or eliminatethe defect, irregularity or undesirable practice.
An application for re-registration as a manager by a company whose registration has been cancelled under this section must be dealt with as if it were its first application for registration.
(4)If the registrationof a manager is cancelled in terms of subsection (l)(a),(b)or (c), theprovisions of this Act with regard to the continuance or the winding-up of the portfolio of a collective investment scheme or the winding-up of the manager apply: Provided that the registrar may in any such case direct the former manager to defray in whole or in part the expenses incurred in continuing the administration of the collective investment scheme, or in realising any of the assets, and also any remunerationto which a trustee or custodian may be entitled.
If the registration of a manager has been suspended under subsection (l), the manager may not, during the period of suspension, issueany fresh participatory interests, but must, in respect of participatory interests issued, continue the administra- tion of the collective investment scheme and deal with such interests in all respects as it would have been bound to do had its registration not been suspended.
The registrar may object to the terms of any price list, advertisement, brochure or similar document relating to a collective investment scheme publishedor proposed to be published by a manageror any of its authorised agentsif the registrar considers theterms are calculated to mislead or are, for any other good and sufficient reason, objectionable or undesirable, and the registrar may direct the manager to discontinue or refrain from publishing or distributing any such document, or to amend its terms.
If a manager fails to comply with section 88(I), or is unable to comply with any other prudential or supervisory requirements imposed by or under this Act, the manager must forthwith in writing report the failure or inability to the registrar, stating forthe reasons such failure or inability.
(2)The registrar may summarily take action under this Act against a manager referred to in subsection (1) orcondone thefailure or inability and afford the manager an opportunity to comply with the relevant provisions within a specified period and subject to such conditions as the registrar may determine.
in the case of any failure to submit to the registrar or any other person, within any period fixed by or under this Act, any stztement, report, return or other document or icformation required by or under this Act to be so submitted, not exceeding R1 000, or such other amount determined by the Minister for every day during which the failure continues.
A fine imposed under subsection (3) must be paid to the Board within such period as may be specified in the relevant notice, and if the manager concerned failsto pay the fine within the specified period the registrar may by way of civil action in a competent court recover from that manager amount of the fine.
The registrar may direct a managerto have all books of accounts and financial statements audited and to submit thz results of such an audit to the registrar within the time specified by the re,' uistrar.
(2)Any person who, in respect of an audit contemplated insubsection (I), gives information, an explanation or access to records which he or she knows to be false or misleading, is guilty of an offence.
The registrar or a person nominated by him or her may attend any meeting of an association or the executive committee of an association or a subcommittee of that committee, and take part in all the non-voting proceedings at such meeting.
An executive officer of an association must on request furnish the registrar with all notices, minutes and documents which are furnished to the members of the association, and the members of the executive committee or a subcommittee of that committee.
the registrar has consulted with the advisory committee.
No person may, after 21 days from the date of publication of the notice whereby a practice or manner of administration has been declared to be irregular or undesirable. employ such a practice or manner of administration otherwise than for the sole purpose of fulfilling any obligations entered into before the date of such notice or to comply with any direction by the registrar under subsection (3).
The registrar may in writing direct any person who employeda practice or manner of administration, whether before. during or after the date of the notice referred to in subsection (2),which was declared to be irregular or undesirable, to rectify, in a manner required by the registrar, anything which was caused by or arose out of the employment of that irregular or undesirable practice or manner of administration.
(4)Aperson who has been directed in terms of subsection (3)to rectify anything, must effect such rectification within seven days after being so directed or within such longer period as the registrar may approve.
refuses or fails to comply with a direction referred to in subsection (3)or fails to comply with subsection (4), is guilty of an offence and on conviction liable to a fine or to imprisonment for a period not exceeding two years or to both a fine and such imprisonment.
any category of persons, from any provision of this Act on such conditions and to such extent as he or she may determine.
all matters relating to the administration of collective investment schemes and schemes.
A report contemplated in subsection (1) must be Tabled in Parliament within 14 days of publication thereof, if Parliament is then in session or, if Parliament is not then in session, within 14 days of the commencement of its next ensuing session.
A person aggrieved by a decision of the registrar under a power conferred or a duty imposed upon him or her by or under this Act, may appeal to the Board of Appeal referred to in section 26 of the Financial Services Board Act, 1990(Act No. 97 of 1990), on the terms and conditions determined in that Act.
An association of persons carrying on the business of a collective investment scheme may apply to the registrar for an association licence. (2) An application for the issue or renewal of an association licence must be made on the form determined by the registrar and be accompanied by the documents and the fee determined by the registrar: Provided that if a licence is issued after 30 June of a particular year one-half of the annual fee is payable. (3) Alicenceexpires on 31 December of each year.
theassociation did not comply with any of the requirements referred to in 30 section 26(a),(0).
ic the association did not comply with any direction.
the association did not comply with any other provision of this Act.
A refusal under subsection (1) is of no force unless the registrar has by notice in writing given the association concerned his or her reasons for the intended refusal and an opportunity to show cause within a period specified in the notice why renewal should not be refused.
that the licence was obtained through misrepresentation.
(2)Cancellation or suspension of a licence under subsection(1) is of no force unless the registrar has by notice in writing given the association concerned his or her reasons for the intended cancellation or suspension and an opportunity to show cause within a period specified in the notice why its licence should not be cancelled or suspended.
An executive committee of an association may, subject to the conditions it may determine, delegate or assign any power or duty conferred uponor assigned to it under this Act to a subcommittee or a person designated by it but is not divested or relieved of a power or duty so delegated or assigned.
an executive officer of an association may, for a period not exceeding 30 days, suspend the administration of a collective investment scheme or part thereof by a member of an association with the approval of 75 per cent of the members of an executive committee, if it is desirable or for the purposes of compliance with andenforcement of the rules and the other requirements of an association, without prior notice to any person and without hearing any person.
Stoppage or suspension referred to in subsection (l)(a) may not be effected by the executivecommittee where the member concerned has not had the opportunity of making representations to the executive committee in support of the continued performance of an activity.
asuspension of a particular activity by an executive officer in terms of subsection (l)(b), the executive committee or executive officer, as thecase may be, may permit other members of the association to continue the activity in question for the sole purpose of fulfilling any obligations entered into before the stoppage or suspension.
The rules of an association must provide for the matters specified in Schedule 4.
convicts a member of an association of an offence in terms of this Act or of an offence of which any dishonest act or omission is an element; or fbi finds, in proceedings to which a member of an association is a party or in which his or her conduct is called in question, that he or she has been guilty of reckless or dishonest conduct, the court may declare the member concerned to be disqualified, for an indefinite period or for a period specified by the court, from carrying on the business of a member of an association.
The court may, on good cause shown, vary or revoke a declaration made under subsection (1).
The registrar of the court or the clerk of the court which has made a declaration under subsection (1) or varied or revoked a declaration under subsection (2),must as soon as possible notify the registrar and the association concerned thereof.
A declaration made under subsection (1) in respect of a member does not affect any right of an executive committee to take disciplinary action in terms of the rules against the member.
An association may be dissolved voluntarily in the circumstances and in the manner specified for that purpose in its rules.
Subject to subsection (l), the provisions of the Companies Act, 1973 (Act No. 61 of 1973), relating to the voluntary winding-up of companies, apply with the necessary changes to the voluntary dissolution of an association.
forward to the registrar a copy of every notice or account which, in terms of the Companies Act, 1973, he or she is required to furnish to the Master of the High Court.
When the affairs of an association have been completely wound up, the Master of the High Court must send a certificate to that effect to the registrar, who must cancel the association's licence. and thereupon the association is dissolved.
or u the registrar.
(a)Subject to the provisions of subsection (l), the provisions of the Companies Act, 1973 (Act No. 61 of 1973), relating to the winding-up of companies by the court apply with the necessary changes to an association.
"the registrar defined in section 1 of the Collective Investment Schemes Control Act, 2002, or"; section 346(4)(a)of that Act is construed as if after the words "lodged with the Master" there were inserted the words "and registrar defined in section 1 of the Financial Institutions (Protection of Funds) Act, 2001 (Act No. 28 of 2001)"; section 346(4)(b)of that Act is construed as if after the word "Master" there were inserted the words "or registrar defined in section 1 of the Financial Institutions(ProtectionofFunds)Act,2001(Act No. 28of 2001)"; and 10 section 357 of that Act is construed as if the registrar were included among the persons to whom notice is required to be given under subsection (l)(b) of that section.
A judicial management order may be granted in respect of an association by the court on the application of the persons who are entitled under section 35(1) to make an application to the court for the winding-up of an association, and section 35(2)(b)(i) 20 and (ii) apply with the necessary changes to an application for a judicial management order.
Subject to section 37, the provisions of the Companies Act, 1973 ActNo.
Despitetheprovisions of the CompaniesAct,1973,ajudicialmanager or liquidator in respectof an association mustbe appointed by the Master of the High Court in consultation with the registrar.
In this Part, unless the context indicates otherwise, "collective investment scheme in securities" means a scheme the portfolio 40 of which consists, subject to this Act, mainly of securities.
The registrar may determine securities or classesof securities that may be included in a portfolio of a collective investment scheme in securities.
No person other than a company which has been registered as a manager under section 42 and its authorised agent may administer any collective investment scheme in securities.
is a company under the Companies Act, 1973 (Act No.
hascapital and reserves as determined in terms of section 88 available for employment in its collective investment scheme, may be or may remain registered as a manager under section 42.
A person who contravenes subsection (I) is guilty of an offenceandliable on conviction to a fine or to imprisonment for a period not exceeding five years or to both a fine and such imprisonment.
A companywhichdesires to be registered as amanager of acollective investmentscheme in securities mustlodge with the registrar an application for registration in the manner and form determined by the registrar, disclose the particulars determined by the registrar and pay the application fee determined by the registrar.
(2)The registrar may call upon any applicant which has applied for registration under subsection (1) to furnish him or her with any further information which is relevant to the application.
that the proposed directors, management, trustee or custodian and auditors are qualified as required by or under this Act, he or she must, subject to subsection (4) and on such conditions as he or she may determine. register the applicant as a manager and issue to it a certificate of registration in the form determined by the registrar.
is one whose registration as a manager will be in the public interest.
change the name of its collectiveinvestment scheme or any portfolio administered by it as approved by the re,' nlstrar.
(2)The registrar may by notice require a manager to terminate the appointment of a director or officer of that manager, if the director or officer is not fit and proper to hold the office in question.
When the registrar intends to act as contemplated in subsection (2), the registrar must give notice to the manager, and, unless it is impracticable to do so, the director or officer concerned.of the registrar's intention and the reasons therefor, and the director or officer must thereupon cease to perform the functions of the office in question pending the final outcome of any appeal under section 24.
A security must be valued at its fair market price.
When a manager is unable to determine a market price for a security, whether listed on an exchange or not, for the purposes of a collective investment scheme in securities, a fair market price for such security must, at the request of such manager, be determined by a stockbroker who is a member of a licenced exchange.
If such manager does not agree with the price determined by the stockbroker, it must refer the matter to the committee of the exchange concerned, which thereupon must determine the fair market price for such security.
equitysecuritiesare securities listed on an exchange to which the 15 managerhas applied the due diligence guidelinesdetermined by the registrar.
The registrar may determine the manner, limits, and conditions subject to which securities or classes of securities may be included in a portfolio of a collective 20 investment scheme in securities.
The registrar may determine different manners, limits and conditions for different securities or classes of securities or different portfolios of a collectiveinvestment scheme in securities.
of the Companies Act, 1973 (Act NO.
Advertising on Roads and Ribbon Development Act, 1940 (Act No. 21 of 1940), and, for purposes of section 49, any piece of land registered as an erf, lot or stand, in a foreign deeds registry.
(2)The registrar may, for the purposes of this Part determine assets, other than those 50 referred to in the definition of "collective investment scheme in property", which may be included in a portfolio of a collective investment scheme in property.
No person other than a company which has been registered as a manager of a collective investment scheme in property under this Part or its authorised agent may administer a collective investment scheme in property.
is registered as acompanyunder the Companies Act, 1973 (Act No.
hascapitalandreserves as determined interms of section 88 available for employment in its collective investment scheme, may be or may remain registered as a manager under this Part.
A person who contravenes subsection (1) is guilty of an offence and liable on conviction to a fine or to imprisonment for a period not exceeding five yearsor to both a fine and such imprisonment.
A manager may, subject to this .4ct or any other law, invest assets of a portfolio of a collective investment scheme in property, in immovable property in a foreign country and property shares or participatory interests inacollectiveinvestmentscheme in property in a foreign country if such foreign country has a foreign currency sovereign rating by a rating agency, which rating and rating agency must be determined by the registrar: Provided that if the country has been rated by more than one agency the lower of the ratings applies.
A manager of a collective investment scheme in property must apply for permission for such participatory interests to be dealt in on a licenced exchange.
Chapter V of the Companies Act, 1973 (Act No. 61 of 1973), applies to the repurchase of a participatory interest by a collective investment scheme in property and for the purposes of this subsection, "shares" as referred to in that Chapter, are regarded as including participatory interests in a collective investment scheme in property.
Sections 42, 43 and 46 apply, in so far as they can be applied, in respect of a manager of a collective investment scheme in property.
(2)The registrar may, for the purposes of this Part, make rules, which are consistent with this Act, for the administration of a collective investment scheme in participation bonds.
Such rules do not have the force of law until published by notice in the Gazette.
No person other than a public or private company which has been registered as a manager of a collective investment scheme in participation bonds underthis Part or its authorised agent may administer any collective investment scheme in participation bonds.
88 available for employment in its collective investmentschememaybe or remain undermanager aregistered as this Part.
(3)A person who contravenesa provision of subsection(1) is guilty of an offence and liable on conviction to a fine or to imprisonment fora period not exceeding five years or to both a fine and such imprisonment.
No. 54 of 1981), may not register any further participation bond in terms of the Participation Bonds Act, 1981 (Act No. 55 of 1981).
(2)(a)A manager of a participation bond scheme which has been exempted by the registrar of unit trust companies in terms of section 37(2)(a) of the Unit Trusts Control Act, 1981 (Act No. 54 of 1981), and a nominee company approved by that registrar in terms of that section, is regarded as from the date of the commencement of this Part to be registered as a manager or approved nominee company, as the case may be, under as a this Part.
(b)The registrar must issue to a manager referred to in paragraph (a)a certificate of registration in terms of this Act.
Within 90 days after the commencementof this Part, the manager must exchange participations in a participation bond registered in terms of the Participation Bonds Act, 1981, for a participatory interest of equal value in a collective investment scheme in participation bonds in terms of this Part.
Sections 42 and 43 apply, to the extentin which they can be applied, in respect of a manager of a collective investment scheme in participation bonds.
The manager of a collective investment scheme in participation bonds may in respect of any business conducted by such manager, actas a principal or as an agent.
(2)When acting as a principal in respect of a transaction which is subject to the provisions of any other law the manager is entitled to charge such finance charges as may be charged in terms of the said law in connection with a money lending transaction.
Despite any contrary law, a participation bond clearly described as such must 5 be registered as such in a deeds registry in the name of a nominee company as nominee for or representative of the participants.
(2)The names of the participants need not be listed in a participation bond.
The debt secured by a participation bond is, to the extent of the participatory 10 interest granted to any participant, a debt owing by the mortgagor to such participant and not to the nominee company, and the rights conferred by the registration of any such bond are regarded, despite the registration of the bond in the name of the nominee company, to be held by the participants.
Minimum investment period 15 58. An agreement in terms of which a manager accepts money for investment in a collective investment scheme in participation bonds must provide that such money is invested in such scheme for a periodof not less than five years.
All participatory interests granted in any participation bond, whenever granted, 20 shall rank in preference concurrently with one another as from the date of registration of the bond.
A nominee company may not transfer, cede or in any way encumber any of its rights under a participation bond without the written consent of the registrar.
Despite any contrary law, a contract of suretyship relating to a debt secured by a 40 participation bond and accepted by a manager subject to subsection (l), is enforceable by the nominee companyin its own name against the surety on behalf of the participants.
(4)This section applies with the necessary changes to any collateral security accepted before 21 June 1978by the manager for the purposes referred 50 to in subsection (1) and in respect of which the contractor arrangement or other document containing the terms and conditions thereof was in force at that date.
The Minister may by notice in the Gazetre declare a specific type of business to be a collective investment scheme to which this Act or any part or provision thereof applies.
issuedifferent notices for different types of declared collectiveinvestment schemes.
Sections 41, 42, 43,45 and 46 apply, to the extent in which they can be applied, in respect of a manager of a declared collective investment scheme.
the fee determined by the registrar has been paid.
A scheme approved in terms of subsection (1) must, for the purposes of section 15A of the Financial Services Board Act, 1990 (Act No. 97 of 1990), be regarded as a financial institution and the provisionsof that section apply, with the necessary changes required by the context, to such a scheme.
specify the date on which such notice comes into force; and fd provide for a reasonableperiod to complete performance of transactions entered into before the date on which the notice in terms of this section comes into force or for the termination of contracts of a continuing nature.
the restriction or partial restriction of a manager registered or approved under this Act in respect of the administration of a collective investment scheme.
in the case of an unincorporated association which is not a partnership, it is formed under the law of that country or the Republic, has a principal place of business there or is controlled by a person connected with that country or the Republic.
any of the conditionsreferred to in section 65(l)fc)are no longer met.
i2 A person may not become or act as a trustee or custodian unless that person is registered as such under section 69.
the reason, if known, for the termination of the appointment.
(3)A trustee or custodian intending to retire from an appointment in terms of this section, must give to the manager and to theregistrar not less than six months' notice of such intention, and during the said period of six months the manager concerned must take steps to appoint astrustee or custodian some other person competent to act as such in terms of section 69.
(a)When it is impracticable for a trustee or custodian to perform any or all its duties under section 70, the trustee or custodian may appoint a representative whichis independent from the manager and any of its agents, to perform such duties.
(b)A trustee or custodian of a collective investment scheme who has appointed a representative under paragraph (a),is not divested of the functions referred to in that paragraph.
a company or institution incorporated under a special Act, excluding a close corporation referred to in the Close Corporations Act, 1984 Act No.
an institution or branchof a foreign institution which is entitled to carry on the businessofabankundertheBanksAct,1990(Act No.
Act, 1998 (Act No. 52 of 1998).
has been registered by the registrar as a trustee or custodian.
the company or institution is not, in relation to the manager, either a holding company or asubsidiary or fellow subsidiary company within the meaning of those terms as defined in the Companies Act, 1973 (ActNo.
(b)The registrar may revoke or suspend any such registration already granted if at any time thereafter he orshe ceases to be satisfied that the requirements contained in paragraph (a)are met by the trustee or custodian.
(4)Any person who contravenes subsection(1) or (2) is guilty of an offence and liable on conviction to a fine or to imprisonment for a period not exceeding one year or to both a fine and such imprisonment.
The registrar must, beforerevoking or suspending aregistrationinterms of subsection (3)(b),notify the trustee or custodian concerned of the grounds upon which such action is contemplated against it, and must give it a reasonable opportunity of showing cause why the proposed action should not be taken.
The trustee or custodian has the right to present its case verbally to the registrar and in doing so to be represented by any other person.
A trustee or custodian must report to the manager any irregularity or undesirable practice, whetherdeclaredinterms of section 21 or not, concerning the collective investment scheme of which it is aware and if steps to rectify the irregularity or practice in question are not taken to the satisfaction of the trustee or custodian, it must as soon as possible report such irregularity or undesirable practice to the registrar.
The trustee or custodian must satisfy itself that every income statement, balance sheet or other return prepared by the manager in terms of section 90 fairly represents the assets and liabilities, as well as the income and distribution of income, of every portfolio of the collective investment scheme administered by the manager.
At the request of the trustee or custodian, everydirector or employee of the manager must submit to the trustee or custodian, any book or document or information relating to the administration by the manager of its collective investment scheme which is in his or her possession or at his or her disposal, and which the trustee or custodian may consider necessary to perform its functions.
(5)A person may not interfere with the performance by a trustee or custodian of its functions.
A trustee or custodian of a collective investment scheme which fails to perform any of its duties referred to in this section, is guilty of an offence.
an asset of a portfolio, are regarded as being trust property for the purposes of the Financial Institutions (Protection of Funds) Act, 2001 (Act No. 28 of 2001), and a manager, its authorised agent, trustee or custodian must deal with such money or other assets in terms of this Act and the deed and in the best interests of investors.
The trustee or custodian must indemnify the manager and investors against any loss or damage suffered in respect of money or other assets in the custody of the trustee or custodian and which loss or damage is caused by a wilful or negligent act or omission by the trustee or custodian.
(1)A manager must appointan auditor for the purposeof auditing the whole of the business of the collective investment scheme administered by it.
(3)A manager must within 30 days from the date of appointment of an auditor apply to the registrar for approval of such appointment.
The registrar may withdraw a prior approval of the appointment of an auditor.
(5)An auditor who has been removed by a manager from his or her office as auditor, must inform the registrar thereof.
cause such records and annual financial statements to be audited, not later than threemonthsafterthe financial year end of the manager or collective investment scheme, as the case may be, or such later date as the registrar may allow, by an auditor whose appointment has been approved by the registrar in terms of section 73.
ensurethatthe financial statements are properly drawn up so as to fairly represent the financial position, and the results of the operations of the manager and every portfolio of its collective investment scheme is in accordance with generally accepted accounting practice and in the manner required by this Act.
When the auditor of a collective investment scheme has conducted an audit in terms of subsection (2),he or she must report to the manager that the accounting records and the annual financial statements have been examined in accordance with generally accepted auditing standards and in the manner required by this Act and state whether in his or her considered opinion it fairly presents thefinancial position and the results of the operations of the manager and its collective investment scheme.
If the auditor is unable to make such a report or to make it without qualification, he or she mustincludein his or her report a statement explainingthefacts or circumstances which prevented him or her from making his or her report or from making it without qualification.
The auditor's report under subsection (3) must, unless all the members present agree to the contrary, be read out at the annual general meeting of the manager.
An auditor who fails to perform any of the duties referred to in this section, is guilty of an offence.
submit a copy of such report to the registrar if there is reasonable cause to believe that such report is or might be of material significance to the registrar.
(2)For purposes of this section a report is of material significance to the registrar if it deals with a matter which, because of its nature or potential financial impact has caused or is likely to cause financial loss to the scheme or any of its investors or creditors.
An auditor who fails to perform any of the duties referred to in this section, is an guilty of offence.
scheme under "conversion scheme" means a scheme regulating a conversion and governing the reciprocal rights and obligations of the parties to the conversion; "qualifying interest", in relation to a collective investment scheme which is converted.means any participatory interest in such scheme whichwasissued date.
provide for payment of the value of the participatory interest of any investor who chooses notto take up a participatory interest in the collective investment scheme established by the conversion or who holds a qualifying interest of a lesservaluethan the value determined in the conversion scheme as the minimum for a qualifying interest.
unless authorised by a resolution adopted by a majority in value of investors the in manner determined by the registrar.
A manager must apply to the registrar for his or her approval of a conversion before a resolution on the matter is passed by investors.
a list of the names and employment history of the persons designated to act as the first directors of the proposed manager after the conversion.
Amanagermust furnish the additional particulars in connection with the conversion that the registrar may require.
the application does not comply with a requirement of this Act or any other law.
For the purposes of considering the basis and conditions on which a participatory interest in any proposed collective investment scheme is offered to investors or to investors and members of the public referred to in section 76(2)(c)the registrar may, after consultation with the manager, designate a person to investigate and advisehim or her, on the reasonableness and fairness of the proposedbasis and conditions.
The costs of an investigation in terms of paragraph (a) must be paid by the manager.
(3)The registrar may not refuse an application without having afforded the manager areasonableopportunity to amend the relevant document in accordance with the registrar's requirements.
As soon as the registrar has approved a conversion, the manager must obtain a resolution passed by investors authorising the conversion.
If the investors pass a resolution authorising the conversion, the registrar must, at the request of the manager. issue a certificate to the manager confirming the registrar's approval of the conversion.
If a collective investment scheme is not a company incorporated in terms of theCompaniesAct, 1973 (Act NO. 61 of 1973), and is converted into a collective investment scheme in the format of a company, it must be incorporated as a company in terms of the Companies Act,1973, with its memorandum and articles of association complying with that Act: Provided that subject to the requirements of the Companies Act, 1973, and any requirement of the registrar or any other authority, the conversion must be regarded as having taken place upon the registration of the memorandum and articles of association under that Act.
(2)The Registrar of Companies may not register the memorandum and articles of association of acompanycontemplatedinthis section unless the application is accompanied by a certificate issued in terms of section 82(1).
(3)For the purposes of the registration of the memorandum and articles of association of any such company in terms of the Companies Act, 1973 (Act No. 61 of 1973), the persons referred to in section 78(2)(e) must, if they accept their appointment as the first directors of the company, sign the memorandum and articles of association as if they were the subscribers of such company as contemplated in section 54(2) of the Companies Act, 1973.
The registrar must give notice in the Gazette of any conversion and the applicable date of a in terms of this Part.
all participatory interests issued by the former collectiveinvestmentscheme and which were not repurchased or cancelled before the conversion, become participatory interests in the converted collective investment scheme.
Except in so far as this section provides otherwise, a conversion does not derogate from the obligationsof the collective investment scheme or the rights of any creditor of investmentbeforethe the conversion.
such other affairs of the scheme as the registrar may require.
(2)The provisions of the Companies Act, 1973 (Act No. 61 of 1973), with respect to the issue of a prospectus or an offer of shares, do not apply to an offer referred to in subsection (1).
such proceeds may be applied for the payment of such participatory interest.
(2)A manager may, subject to section 95, lend or offer to lend assets included in a portfolio in the manner, within the limits or on the conditions determined in the deed.
Different manners, limits and conditions for different assets or portfolios may be determined or provided for under subsection (1) or (2).
(1)A manager may conduct business other than administration subjectto the prior approval of the registrar.
(2)The registrar may on such conditions as he or she may determine approve the 25 application of a manager to conduct other business, if the investors in the collective investment scheme administered by the manager are not likely to be prejudiced.
"Liquid form" for the purpose of sections 88 and 89 means any asset which is capable of being withindays.
A manager must on an ongoing basis maintain in liquid form the capital for the matters and risks determined by the registrar.
The registrar may exempt the managers of a particular category of collective investment schemes from any or all the requirements referred to in subsection (1) and 35 determine capital requirements for such managers.
The registrar may exempt a manager from compliance with the requirements of this section for such period. not exceeding six months, and on such conditions as he or she may lay down.
A managerwhoceases to comply with subsection (I), and who has not been exempted under subsection (3), must, within 30 days notify the registrar in writing to that effect.
A manager may not be registered or allowed to continue as a manager, unless at the time of registration and at all times thereafter the managerhas nett assets in liquid 45 form which exceed the minimum capital requirement determined under section 88.
on or before a date specified by the registrar, lodge with the registrar such furtherinformation and explanations in connection with the financial and other statements referred to as the registrar may request.
(2)A manager must, not later than 90 days after the closeof the financial year of every 10 portfolio of the collective investmentscheme administered by the manager, send to every invesror in such portfolio a report relating to the portfolio containingthe information determined by the registrar.
(Act No. 61 of 1973).
power voting of Exercise by manager 30 91. Amanager or its nominee exercising the voting power conferred on it by the assets held in a portfolio, must exercise such power in the best interest of the investors.
by virtue of any underwriting of participatory interests done by a manager, 40 director or employee.
any costs incurred as a result of a collective investment scheme in property being listed on an exchange.
Amounts other than those referred to in subsection (1) may not be deducted by a managerfrom a portfolio unless determined by the registrar.
(a)Subject to paragraph (b)a manager may not sell any participatory interest at a price which exceeds or is less than the net asset value of that participatory interest.
of a specific number of participatory interests at a fixed price based on the price of the participatory interests on a previous date not more than 28 days prior to closingthe of the offer.
In making payment to the investors in a portfolio of a distribution of income accruals on the participatory interests belonging to them, a manager may round off to the nearest one cent, any amount so paid in respect of such number of participatory interests as represents the minimum number which, in terms of the portfolio's deed, must be purchased at any one time, but any amount which, by virtue of such rounding-off, is left in the portfolio, must be canied forward to the credit of investors in the next ensuing distribution.
lend or advance any money.
A manager, other than a manager of a collective investment scheme in securities, may for the account of a portfolio borrow money for the purposes and subject to the limits and conditions determined in the deed.
In the case where insufficient liquidity exists in a portfolio or where assets cannot be realised to repurchase or cancel participatory interests, the manager of a collective investment scheme in securities may borrow the necessary funds for such repurchase or cancellation on security of the assets and for the account of the portfolio in question, at the best commercial terms available until assets can be realised to repay such a loan: Provided that the maximum amount so borrowed may not exceed 10 per cent of the market value of such portfolio at the time of borrowing.
Every deed must set out the requirements for the administration of a portfolio and it must contain, amongst others and as far as they can be applied, provisions to regulate the matters detailed in Schedule1 in respect of a collective investment scheme in securities andthosedetailedinSchedule 2 in respect of a collectiveinvestment scheme in property.
The registrar may by notice in the Gazette exempt a particular typeor category of collective investment schemes from the provisions of subsection (1) and determine the matters to be complied with or to be provided for in a deed by such type or category of collective investment schemes.
The registrar may by notice in the Gazette suspend a provision of any deed and determine the matters to be complied with or suspend such a provision and determine matters in respect of which any deed bemust amended.
A provision in a deed which is inconsistent with this Act is void.
(a) The parties to a deed may by supplemental deedamendadeed but no amendment of a deed is valid unless theconsentthereto of a majority in value of investors has been obtained in the manner prescribed in the deed.
does not release the trustee, custodian or the manager from any responsibility to the investors, he or she may direct that such consent be dispensed with.
Subject to subsection (2), a deed which immediately prior to the date of commencement of this Act was a deed in terms of any law repealed by this Act, must within 12 months fromthedate of commencement of this Act beamended, supplemented or replaced in order to comply fully with the requirements of this Act.
the registrar, granted on suchconditionsas he orshe in writing may determine.
A copy of the transaction (hereinafter referred to as the proposed transaction) whereby the proposed amalgamation, cession, transfer or take-over is to be effected and such other particulars as may be necessary to enable the registrar to exercise his or her powers under this section, must be submitted to the registrar by the parties to the proposed transaction.
investors holding a majority in value of participatory interests in an original scheme or portfolio have consented to the proposed transaction.
an investor in an original scheme or portfolio acquires participatory interests in the new scheme or portfolio or in the scheme or portfolio which acquired rights by amalgamation, cession, transfer or take-over. having the same aggregate money value as that of the participatory interests held, immediately before the date on which the proposed transaction became effective, by such investor in an original scheme or portfolio.
on production to him or her of the title deed or other deed or document in question, must, on such title deed or other deed or document and in his or her registers or other books, make such endorsements and entries as may be necessary as a result of the said amalgamation, cession, transfer or take-over to effect or record the transfer of the said property or other rights to the new scheme or portfolio or, as the case may be, to the scheme or portfolio acquiring rights by means of the amalgamation, cession, transfer or take- over in question.
Except in so far as this section provides otherwise, an amalgamation, cession, transfer or take-over in terms of this section does not derogate from the rights of any creditor or any obligation relating to an original scheme or portfolio.
(7)No transfer or stamp duty or registration or other fees are payable in respect of any endorsement or entry made in terms of subsection (3,and no stamp duty or other fees are payable in respect of the issue of a substituting participatory interest or the transfer of assets as a result of any amalgamation, cession, transfer or take-over in terms of this section.
the basis on which the manager undertakes to repurchase participatory interests offered to it and the basis on which selling and repurchase prices will be calculated in accordance with this Act and the terms and conditions of the deed.
in the case of any such document published within the first-mentioned period, to information as to the probable yield calculated in a manner clearly set out in such document.
If, in any price list, advertisement, brochure or similar document published by a manager or by any of its authorised agents, it is stated that investors ina portfolio of the collective investment scheme are entitled to participate in its profits, there must also be stated what amount was so distributed during the previous financial year, expressed as a percentage of the aggregate market value, as at the closeof that year, of all assets then held on behalf of investors in that portfolio.
There must be included in every pricelist, advertisement, brochure or similar documentpublished by amanager or by any of its authorisedagents in which participatory interestsarecommended to the public, astatementinclear and unambiguous terms, to the effect that the value of participatory interests in a portfolio is subject to fluctuation from time to time relative to the market value of the assets comprised in the portfolio: Provided that the registrar may, subject to such conditions as he or she may deem fit, exempt a manager or any such agent from the provisions of this subsection in relation to any advertisement or any particular type of advertisement which is of such a nature that it would be unreasonable to require the manager or such agent to comply with this subsection.
A manager must maintain a principal office in the Republic, must appoint a public officer in the Republic and must notify the registrar in writing, within 30 days after the commencement of this Act, of the location and address of that office and of the name of its public officer.
Wheneveramanager has changed its principal office or has appointed a new public officer, it must within 30 days from such change or appointment give notice in writing thereof to the registrar.
Process in any legal proceedings against a manager may be served at the principal office of the manager, and if such office is no longer in existence, service upon the registrar is deemed to be service upon the manager.
If at the time, whether before or after the commencement of this Act, when a portfolio was first formed under a collective investment scheme, no period was fixed for the duration of that portfolio, the manager, trustee or custodian may, on application to the registrar and subject to such terms and conditions as he or she may determine, wind-up that portfolio at any time.
Despitesubsection (l), any competent division of the court may, on the application of a manager, trustee or custodian, order any such portfolio to be wound-up if the court is satisfied that to do so would be in the interest of investors in that portfolio.
Upon the winding-up of a portfolio in terms of this section the manager must under the control and supervision of the trustee or custodian realise all the assets of such portfolio as soon as possible having regard to the interest of investors, but the manager incurs no liability by reason of the exercise in good faith of its discretion as to the time of realisation of any assets unless the discretion is exercised in a grosslynegligent manner.
The net proceeds of the realisation of such assets must be deposited in the trust account referred to in section 105 and must under the control and supervision of the trustee or custodian be distributed by the manageror the trustee or custodian, as the case may be, amongst theinvestorsandthemanager in proportion to their respective participatory or other in the portfolio.
Pending the realisation of the assets in such winding-up the manager, trustee or custodian must on behalf of the collective investment scheme collect all income accruals in respect of such portfolio and must deposit and distribute the amounts collected in the manner prescribed in subsection (4).
Despite the provisions of the CompaniesAct,1973 (Act NO. 61 of 1973), this section and sections 103 and 104 of this Act must be applied to the winding-up of a portfolio of an open-ended investment company and none of the assets of a portfolio administered by such a company may be utilised for the payment of any claim of a creditor of the company.
STAATSKOERANT,28 JUNIE 2002 No.
23253 39 to continue the collective investment scheme for a period of time, direct the manager, trustee or custodian to postpone the realisation of any assets for such period or periods, not exceeding five years at a time, as the registrar may determine and, pending such realisation, to carry on the scheme in accordance with the registrar's directions and to collect and deal with all income accruals, bonuses and other distributions in accordance with subsections (4) and (5) of section 102.
(2)Amanager, trustee or custodian acting inaccordance with a direction of the registrar given in terms of subsection (1) may terminate his or her functionsas manager, trustee or custodian on giving six months' notice in writing to the registrar, and the registrar may thereupon appoint some other fit and proper person to take over the functions of the manager, trustee or custodian, subject to such conditions as the registrar may stipulate.
As remuneration for any services rendered in terms of this section a manager, trustee or custodian or a person appointed by the registrar to take over the functions of a manager, trustee or custodian is entitled to a fee, calculated at such rateas the registrar may determine, on all moneys received by him or her in carrying out his or her duties under this section, and the registrar may authorise the amount of such fee to be deducted, in such proportions as he or she may determine, from income accruals or any moneys realised by the sale of assets in terms of this section.
the assets of a portfolio.
Amanagermustopen and maintain a separateoperational trust account controlled by the trustee or custodian for each or for all the portfolios administered under its collective investment scheme at a registered bank and must on the date of receipt of any payment in cash, cheque, draft or other instrument fromor on behalf of an investor or on the first business day thereafter, deposit in such account either the cash, cheque, draft orother instrument by means of which such payment is made or, alternatively, deposit for same day value in such account funds equal to the amount of such payment.
Ib in terms of this Act, my other law and the deed: Provided that if after such withdrawal any deposited cheque, draft or otherinstrumentagainstwhich such withdrawal was made is not subsequently honoured, the manager must immediately pay the shortfall arising from such default into the operational trust account or cancel any participatory interest issued in respect of such defaulting payment.
Any excessremaining in the operational trustaccountafterpayment of or provision for all claims of investors whose funds have, or should have been deposited in such account, is not trust property as determined in section 71.
The division of the court having jurisdiction over a manager may, on application by an association, the registrar or by any other person having a financial interest in or claim against an operational trust account, on good cause shown, prohibit such manager from operating such account in any way and may appoint a curator to control and administer such account with such duties and powersin relation theretoas the court may deem fit.
to have the effect of inflating, depressing or maintaining theprice of a participatory interest.
by concealing material information at his disposal, induce another person to purchase or deal in a participatory interest.
I 10 108. A record purporting to have been made or kept in the ordinary course of the business of a collective investment scheme, or a copy of or an extract from such record dul!. certified to be correct, is on its mere production by the State in any criminal proceedings admissible as evidence of thefacts contained in suchrecord, copy or emact.
(a)A person who contravenes or fails to comply with any provision of this Act or any rule or directive of an association or regulation, or notice or directive under this Act is liable to any other person for any loss or damage suffered by that person as a result of such contravention or failure.
(I) The defences applying to an action for damages in respect of a breach of a statutory duty are available to any defendant in an action contemplated in paragraph (a).
(2)A person who contravenes a provision of section 106 or 107 is liable to pay damages to any other person who, by dealing in or purchasing a participatory interest, suffers a loss as a result of the difference between the price at which the dealing takes 25 place and the price at which it is likely to have taken place if the contravention had not occurred.
The amount of damages for which a person is liable in terms of subsection (2) is limited to twice the profit gained or likely to be gained, or loss avoided or likely to be avoided. by him or her as a result of the contravention.
in a casecontemplated in subsection (2), on the day of completion of the 35 dealing in which the loss occurred.
(5)The registrar may bring an action in a competent court in the name of, and for the benefit of, an investor or a specific group of investors for recovery of damages for aloss refened to in subsection (2).
Nothing contained in this section affects any liability which a person may incur 40 under the common law or any other law but any damages previously awarded in terms of this section which arise from the same cause must be taken into consideration for purposes of any further claim referred to in this subsection.
disclosure of thesourcefrom which the comment was obtained, or the information on which it was based.
STAATSKOERANT, 28 JUNIE 2002 No.
(I Except where this Act expressly provides otherwise, the application of the Cornpanies Act, 1973 (Act No. 61 of 1977), to a manager is not affected by this Act.
(2)(a)Sections 85 to 89 of the Companies Act, 1973, do not apply to an open-ended investment company.
Chapter VI of the Companies Act, 1973, does not apply to any offer of participatory interests to members of the public or to investors by an open-ended investment company or a foreign collective investment scheme approved in terms of section 65.
(3)In the application of section 357 of the Companies Act. 1973 (Act No. 61 of 1973), to a manager, the registrar is regarded as having been included amongst the persons to whom notice is required to be given under subsection (1)(b) of that section.
In the application of section 427(2) of the Companies Act, 1973, to a manager, section 346(4)(u) of that Act must be construed as if the words "or to the Registrat of Collective Investment Schemes appointed under the CollectiveInvestmentSchemes Control Act. 2002", had been inserted in that section after the words "shall be lodged with the Master".
The registrar may. in respect of any manager being wound-up or judicially managed, in writing direct the liquidator or the judicial manager, as the case may be, to furnish him or her with a copy of any particular account, return, statement or other document which the liquidator or the judicial manager is required under any provision of the Companies Act, 1973, to furnish to the Registrar of Companies or the Master, or to furnish him or her from time to time with copies of all or any of such accounts, returns, statements or documents as and when they are furnished to the said Registrar or to the Master.
Immediately after the confirmation of the final account in the winding-up of a manager, the Master of the High Court concerned must give the registrar notice thereof.
The Minister may delegate any power conferred upon him or her by this Act to the Director-General: Finance or any other officer in the National Treasury, the Financial Services Board. an association or the registrar.
authorise the chairman, the executive officer or any other officer or employee of the association to perform any duty assigned to the association by or under this Act.
authorisesuch officeror employee to perform any duty assigned to the registrar by or under this Act.
Any delegation under subsection (l), (2)(a)or (3)(a) does not prohibit the exercise of the power in question by the Minister, association or registrar, as the case may be.
Exemption from Act57 of 1988 113. The Trust Property Control Act, 1988 (Act No. 57 of 1988), does not apply in respect of a collectiveinvestmentscheme administered in terms of this Act.
The Minister may make regulations as to any matter which is required or permitted by this Act to be prescribed under this Act.
fb) prescribing. generally, any matter, whether or not connected with any matter specified in subsection (I), which it is necessary or expedient to prescribe or to regulate in order that the objects of this Act may be achieved andthe generality of this provision is not limited by subsection (1).
If the circumstances under which the managerof a collective investment scheme in securities may suspend the repurchase of participatory interests and the conditions of such suspension: Provided that any offer of participatory interests for repurchase by an investor, the aggregate amount or value of which does not exceed the amount specified by the registrar, on the day of such offer, is excluded any suspension.
determining, generally, any matter, whether or not connected with any matter specified in subsection (3), which it is necessary or expedient to determine in order that the objects of this Act may be achieved and the generality of this provision is not limited by subsection (3).
(5)Any matter which the registrar may or must determine in terms of this Act must be determined by notice in the Gazette.
(6)Fees which are by virtue of a provision of this Act payable. and interest so payable in respect of overdue fees, are a debt due to the Board and may be recovered by the registrar by action in any competent court.
A regulation may provide for penalties for a contravention thereof or failure to comply therewith.
failsto complywith any direction, requirement, notice, rule or regulation under any provision of this Act, is guilty of an offence.
Subject to the provisions of the Criminal Law Amendment Act, 1997 (Act No.
STAATSKOERANT, 28 JUNIE 2002 No. 23253 43 specifically provided, is liable to a fine or to imprisonment for a period not exceeding 5 years or to both a fine and such imprisonment.
Subject to subsection (2),the laws set out in Schedule 3 are hereby repealed or amended to the extentsetout in the third column thereof. (2) Anything done under any provision of a law repealed or amended by subsection (l), and which could be done under a provision of this Act, is regarded as having been done under the last-mentioned provision. (3) (a)A management company or a trustee which immediately before the date of commencement of this Act was registered as such under the Unit Trusts Control Act, 1981, is regarded, from the date of such commencementas being registered as a manager or trustee under this Act. (b)The registrar must issue to a manager or trustee referred to in paragraph (a)a certificate of registration in terms of this Act.
Short title 15 118. This Act is called the Collective Investment Schemes Control Act, 2002, and comes into operation on a date fixed by the President by proclamation in the Gazerre.
The investment policy to be followed in respect of each portfolio; the manner in which the assets of a portfolio are to be valued for purposes of calculating the selling and repurchase prices of participatory interests; the frequency of calculation of selling and repurchase prices of participatory interests, and the point in time at which such calculations will be performed on a specific day, which point will be referred to as the valuation point; if assets other than securities listed on an exchange may be included in any portfolio, the basis on which the market value of such assets is to be determined for the purposes of determining selling and repurchase prices; the manner in which and a point in time at which the valuation point will be applied either to the creation, sale, repurchase or cancellation of participatory interests; the manner in which distributions are to be calculated and settled; the limits, terms and conditions under which scrip may be lent; the limits, terms and conditions under which a manager may for the account of a portfolio borrow money; the charges that may be levied and the method of calculation of those charges; that not less than three months written notice shall be given to every investor of an increase in any charge, any change in the method of calculation which could result in an increase or the introduction of any additional charge; and the manner in which a deed may be amended.
that the repurchase of such participatory interests shallbesettledin accordance with conditions determined by the registrar under section 114(3) of the Act.
the manner in which a deed may be amended.
1990 the substitution in the defini-tion of "financial institution" for subparagraph (iii)of para-graph (a)of the followingsubparagraph:"(iii) a collective investment scheme as defined in section 1 of the Collective Investment Schemes Control Act, 2002, a manager, trustee or custodian registered in terms of that Act, annf such a manager."
Control Repeal of the whole. ment Act, 1998 Act No.
(bb)that every member must contribute to such fund.
(a)The association must as soon as possible after the granting of a licence, publish its rules in theGazette in English and any one other official language at the expense of the association concerned and furnish the registrar with a copy thereof.
it is consistent with this Act.
(c)The registrar must, after considering any objection contemplated in paragraphfl, approve or disapprove an amendment referred to in paragraph (b)within a period of 60 days after expiry of the period referred to in paragraph (f.
(d)If the registrar does not disapprove of an amendment referred to in paragraph (b) within a period of 60 days after expiry of the period referred to in paragraph (f),the registrar is regarded as having approved it and such amendment comes into operation on the day immediately following upon the date of expiry of the aforesaid period of 60 days.
(e)Upon receipt of an application for approval in terms of paragraph (b),the registrar must cause to be published at the expense one other of the association in English and any official language in the Gazette a notice setting forth the proposed amendment. cf, The said notice must call upon all interested persons (other than members of the association concerned) who have any objection to the proposed amendment to lodge their objection with the registrar within a period of 30 days from the date of publication of the notice in the Gazette.
A rule made under this section is binding on all members and on all officers or employees of members and on every person utilising the services of a member or who concludes a transaction with a member in the course of that member's business.
(v)adirection to a member to terminate theemployment of an officer or employee.
(b)The rule contemplated in paragraph (a) may also specify that full particulars regarding the imposition of a penalty must be published and that any member, officer or employee who contravenesor fails to comply witha rule may be ordered to pay the costs incurred in the investigation or hearing in question.
Whenever the registrar considers it desirable in the public interest, he or she may, after consultation with the executive committee of an association, amend the rules of that association by notice in the Gazette.
Subject to the prior approval of the registrar, an executivecommittee may suspend any of the rules of an association for a period not exceeding 90 days at a time and may during such suspension by resolution likewise approved issue a directive to regulate the matter in question until such time as an appropriate amendment of the rules can be made in terms of this item.
(6)Items 3 and 4 apply in respect of any contravention of or non-compliance with a directive.
Bonds Act,55 of 1981. This Bill will provide a comprehensive legislative frameworkto regulate and supervise thecollectiveinvestment industry based on internationally accepted principles and best practice.
The Bill willprovide a modem legislative framework forthe equityunittrust, property unit trust and participation mortgage bond scheme industriesin line with internationalbestpractice.
Portfolios 372 314 8 Number of investors 2 000 000 N/A NIA 83 346 "* S. A.
The first legislation for the regulation and supervision of the unit trust industry was promulgated in 1947 and has been amended several times in an attempt to keep abreast of developments within the industry and the needs of investors. To enable local industry to become morecompetitive, to remain competitive and to upgrade regulation and supervision of the industry, the revision of the current legislation has become necessary and in the public interest.
The Policy Board for Financial Services and Regulation, initsreview of the regulatory framework for financial services industries, amongst others, proposedthat all forms of collective investment schemes should be regulated by one act. This Act must also provide for the establishmentof new structures, which is not possible in the context of current legislation. The Association of Unit Trusts of South Africa ("AUT") conducted a survey of opinion of the unit trust industry, the South African regulatory authorities as well as other related institutions. The AUT reviewed the legislation and regulatory approaches of selected international authorities and the principles thereof. Workshops were held on the topic. The AUT, in consultation with the Financial Services Board, compiled a document setting out the principles within which the drafting of the legislation should take place. Subsequently a committee, representative of the Financial Services Board, consumers and the industry, was appointed which prepared the Bill.
independent custodianship of the assets and funds representing the interests of investors.
The Financial Services Board and the AUT believe that there is an urgent need for the introduction of the proposed legislation and that there are notable benefits to be gained for the South African economy as a whole.
Enhancement of regulation, supervision and investor protection.
These reasons are dealt with in more detail below.
The relaxation of exchangecontrol and the integration of international financial markets have resulted in a significant increase in the investment options available to local investors inforeignjurisdictions and has furthermore been expanded by the numerous foreign financial institutions which are now actively soliciting investments from local investors. There is no quantitative data to show crossbordermarket penetration in South Africa by value but the current structure, which limits unit trusts, to trust based vehicles only can be seen as a severe hindrance for local industry to compete efficiently with foreign competitors.
The proposed Bill therefore does not only set a regulatory framework which permits a diversification of trust based collective investmentschemes by allowing for more competitivecompany based collective investmentschemesthat are now prevalent internationally. It also provides for prudential requirements and for the inclusion, into the regulatory net, of other types of financially based collective investment schemesthat are not regulated at the moment.
The combination of trust structure, exchange control and taxation has, furthermore, also driven South African companies to establish off-shore investment companies and apply capital and skill to do business internationally.
It would be sensible to make it worthwhile for all those activities to be camed out in South Africa and to reverse the impression that South Africa is declining more and more as an investment destination.
It is internationally accepted that innovation is not possible within a trust-based collective investment scheme. Open-ended investment company schemes should allow much greater innovationin the collective investment scheme arena. Many such products already exist internationally and are sold to local investors. They are also used offshore by local companies but cannot be sold in South Africa at present. It would be beneficial to South Africa's balance of trade and employment prospects if these products could be designed locally and sold in the domestic and foreign markets.
The Financial Services Board and the AUT believe that the proposed legislation to allow for the diversification of collective investmentschemes would serve many worthwhile purposes.
The Bill does not have financial implications for the State.
The National Treasury and the State Law Advisers are of the opinion that this Bill should be dealt with in terms of section 75 of the Constitution since it contains no provision to which the procedure set out in section 74 or 76 of the Constitution applies.