Acts Online
GT Shield

Collective Investment Schemes Control Act, 2002 (Act No. 45 of 2002)

Part VI : Collective Investment Schemes in Participation Bonds

61. Collateral security in respect of participation bonds

 

(1) Any collateral security, including a surety mortgage bond, collateral mortgage bond, notarial bond, suretyship, guarantee, cession, pledge or lien accepted by a manager in addition to a participation bond in order to secure—
(a) the debt secured by a participation bond;
(b) the due performance by a mortgagor of his or her obligations under a participation bond;
(c) the due performance by a surety of his or her obligations under a contract of suretyship relating to such debt or to the obligations of the mortgagor,

must be registered in the name of the nominee company as nominee for or representative of the participants, and any contract relating to such security must be drawn and executed in favour of the nominee company as nominee for or representative of the participants.

 

(2) Despite any contrary law, a contract of suretyship relating to a debt secured by a participation bond and accepted by a manager subject to subsection (1), is enforceable by the nominee company in its own name against the surety on behalf of the participants.

 

(3) Sections 56(2), 57, 58 and 59 apply with the necessary changes to the extent to which they can be applied, in respect of collateral security accepted by a manager for the purposes referred to in subsection (1), and a reference to a participation bond is construed so as to include a reference to a participation bond and collateral security, and a reference to a mortgagor is construed so as to include a reference to a mortgagor and the grantor of collateral security.

 

(4) This section applies with the necessary changes to any collateral security accepted before 21 June 1978 by the manager for the purposes referred to in subsection (1) and in respect of which the contract or arrangement or other document containing the terms and conditions thereof was in force at that date.