Disclosure Requirements - Investment Funds - South Africa
Disclosure Category: 1
Clearstream Banking S.A. (“CBL”) may fall under an obligation to disclose the identity and holdings of customers and/or ultimate beneficial owners in the case of holding investment funds in South Africa.
In order to comply with the applicable legislation, customers with holdings in South African domiciled 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 cannot hold such investment funds or financial instruments in their accounts with CBL.
Background and legal basis
In terms of the Financial Intelligence Centre Act, 2011 (FICA), an accountable institution (which includes a manager of a CIS as well as a licensed FSP) is required to establish and verify the identity of the person on whose behalf a client is acting before entering into a relationship with such person. Section 21 of FICA provides that where the client of an accountable institution acts on behalf of another person, the accountable institution is required to establish and verify the identity of that other person as well as the client’s authority to establish the business relationship or to conclude the single transaction on behalf of that other person.
Non-compliance with the request for information on CBL’s customers and the ultimate beneficial owners of the participatory interests in the funds will result in the manager being unable to allow the investor to invest in the fund.
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.
The information contained in the Disclosure Requirements is based on the legal opinion obtained by CBL that was issued on 6 September 2021. CBL believes the information to be correct as of that date but disclaims any responsibility as to the accuracy and completeness of the information after that date. In the case of discrepancy between the information provided by CBL and the local laws and regulations, the latter shall prevail. The Disclosure Requirements do not constitute legal advice and customers should seek advice from independent professional counsel.
Customers are responsible for ensuring compliance with the disclosure requirements and agree to indemnify and hold harmless, CBL, for any loss, expense, liability, damage or claims, whether direct or indirect, against or incurred by CBL arising out of or resulting from such non-compliance.