Disclosure Requirements - Investment Funds - South Africa

31.01.2018

Disclosure Category: 1

Under the laws of South Africa where the investment fund has been structured as a company, Clearstream Banking S.A. (“CBL”) may fall under a legal obligation of disclosure under the Companies Act, in the case of holding South African investment funds or foreign investment funds with a register located in South Africa.

Investment funds not structured as a company to which the Companies Act applies, the fund manager and its agents (for instance, the Registrar, Transfer Agent) may not be entitled to request disclosure of the underlying customer and beneficial owners.

Consent

In order to comply with the applicable legislation, customers holding South African investment funds or entering into transactions in the South African market must consent and are hereby deemed to consent to the required legal disclosure. Such consent includes the appointment of the requestor (for example, the Fund Manager, Transfer Agent, Regulator) as their attorney-in-fact, under power of attorney, to collect from CBL the required information to be disclosed. Customers who do not grant such authority to CBL cannot hold such investment funds or financial instruments in their accounts with CBL.

Background and legal basis

Customers are advised that local laws and regulations (including section 56 of the Companies Act 2008) imposed an obligation on CBL to disclose in writing to the investment fund within five (5) business days after the end of every month during which a change has occurred in such information:

  1. The identity of the person on whose behalf that security is held by CBL; and
  2. The number and class of securities held for each such person with a beneficial interest.

The responsibility to notify CBL about changes to the identity of beneficial owners or holdings falls on the customer.

If the investment fund knows or has reasonable cause to believe that any of its securities are held by one person for the beneficial interest of another, by notice in writing, may require through CBL and within ten (10) business days after the receipt of the notice, either of those persons to

  1. Confirm or deny that fact;
  2. Provide particulars of the extent of the beneficial interest held during the three (3) years preceding the date of the notice; and
  3. Disclose the identity of each person with a beneficial interest in the securities held by that person.

The investment fund may be required to establish and maintain a register of the disclosures that may be open to public inspection. The investment fund may be obliged to publish in its annual financial statements, a list of the persons who hold 5% or more of the total number of that class of securities issued by the investment fund, together with the extent of such interests.

Sanctions

Contravene of any provision of the Companies Act may trigger the Commission to issue a compliance notice. Failure to comply with the compliance notice is considered an offence, and the penalty for conviction includes either a fine or imprisonment or both.

The customer undertakes to hold CBL harmless and to indemnify CBL from any loss, claim, liability or expense asserted against or imposed upon CBL as a result of the customer failure, whatever the failure, to comply with these disclosure requests.