Investment Fund Market Guide - South Africa

31.01.2018

Key features (Register market)

 

Yes/No

Remarks

Settlement free of payment

Yes

 

Settlement against payment

Yes

Refer to CBL’s Eligible currencies and the fund currency specified in fund prospectus.

Disclosure Requirements

Yes

Refer to Disclosure Requirements – Investment Funds – South Africa.

Restrictions on customer

Yes

Refer to Holding Restrictions – Investment Funds – South Africa.

Restrictions on settlement

No

 

 

 

Remarks

Market type / link type (Settlement link)

Register market 

Eligible fund types in CBL

Register market: Collective investment schemes (including hedge funds) that are not deposited in STRATE, private equity funds covered under the Company Act.

CSD Link: n/a

Eligible fund types in CBL

Register market

Collective Investment Schemes (CIS) – CIS that are not deposited in STRATE are eligible in CBL. STRATE is the South African central securities depository.

CIS are commonly established as trusts in South Africa, and less commonly as open-ended investment companies. CIS collectively can be grouped into five types, namely:

  • CIS in securities - The most common kind of CIS where the bulk of the portfolio are securities, including local funds registered with the Financial Services Board (FSB)
  • CIS in properties - The bulk of the portfolio are property shares or direct property
  • CIS in participatory bonds - Portfolio consists mostly of participatory bonds. A participatory bond is a mortgage bond over immovable property.
  • Declared CIS - A scheme declared by the Minister of Finance as a CIS.
  • Foreign CIS - Foreign schemes that solicit investments from South Africans. Following the Collective Investment Schemes Control Act (CISCA), a foreign CIS must apply to the Registrar of CIS to be approved and registered.

Hedge Funds – The South African draft Hedge Fund Regulations define a hedge fund as a CIS which uses any strategy or takes any position which could result in the portfolio incurring losses greater than its aggregate market value at any point in time, and which strategies or positions include but are not limited to leverage or net short positions.

South African hedge funds can be categorised as:

  • Retail Investor Hedge Fund (RIHF) – Allowing investments from any investor
  • Qualified Investor Hedge Fund (QIHF) – Allowing investments from qualified investors (per Hedge Fund Regulations) only

Non-STRATE deposited hedge funds that are regulated as collective investment schemes under CISCA, are eligible in CBL.

Private Equity Funds – Private equity funds structured as companies, for which the Companies Act applies, are eligible in CBL.