In this Schedule, "the Act" means the Collective Investment Schemes Control Act, 2002 (Act No. 45 of 2002), and any word or expression to which a meaning has been assigned in the Act, bears that meaning so assigned to it and unless the context otherwise indicates—

"absolute value-at-risk"

means the value-at-risk of a portfolio expressed as a percentage of the portfolio's net asset value;

"assets"

means assets as defined in the Act and includes liabilities;

"assets in liquid form"

means—

on condition that the assets referred to in paragraphs (a), (b), (d) and (e) are capable of being converted, without any penalty on capital in terms of the conditions of the security, into cash within seven days;

"authorised user"

means an authorised user as defined in section 1 of the Financial Markets Act;

"bank"

means a bank as defined in the Banks Act, 1990 (Act No. 94 of 1990), a mutual bank as defined in the Mutual Banks Act, 1993 (Act No. 124 of 1993), a co-operative bank as defined in the Co-operative Banks Act, 2007 (Act No. 40 of 2007), a branch of a foreign institution, which institution is authorised in terms of the Banks Act to conduct the business of a bank by means of such branch, or a foreign bank;

"clearing house"

means a licensed clearing house as defined in section 1 of the Financial Markets Act;

"commitment approach"

means a methodology for calculating exposure that considers the effective exposure of derivatives to, and takes an aggregate view of, securities with the same or similar underlying exposure, where the total commitment is considered to be the sum of the absolute value of the commitment of each individual position, including derivatives after taking into account netting and hedging;

"counterparty"

means a juristic person on whom the hedge fund is dependent to realise, collect or settle the securities or the value of securities;

"counterparty exposure"

means a value that best reflects the hedge fund's exposure to a relevant counterparty and accurately reflects the economic loss that the hedge fund is exposed to if the counterparty defaults on its obligations;

"custodian"

for purposes of this Notice includes a trustee contemplated in section 68 of the Act;

"depository"

means—

entrusted with the safekeeping of the assets of hedge funds, and approved by the registrar;

"derivative instrument" or "derivatives"

means a derivative instrument as defined in the Financial Markets Act;

"embedded derivative"

means a security or money market instrument which includes a derivative, where—

"en commandite partnership"

means a partnership where the en commandite partner's liability towards co-partners of the partnership is limited to the specified capital amount which the en commandite partner has contributed or undertaken to contribute to the partnership and the en commandite partner is not at risk to suffer a loss or liability in excess of its investment in or contractual commitment to the partnership;

"FAIS Act"

means the Financial Advisory and Intermediary Services Act, 2002 (Act No. 37 of 2002);

"Financial Markets Act"

means the Financial Markets Act, 2012 (Act No. 19 of 2012);

"Fit and Proper Requirements"

means the Determination of fit and proper requirements and conditions for managers of collective investment schemes determined under section 42 of the Act;

"foreign bank"

means a bank that is not a South African bank and is domiciled, registered and supervised as a bank outside of South Africa;

"FSP"

means an authorised financial services provider under the FAIS Act;

"fund administrator"

means a juristic person, who administers the accounting, reconciliation, investor liability, valuation of assets, pricing of participatory interests, and the maintenance of the register of investors for a hedge fund;

"hedge fund"

means a hedge fund as defined in the Declaration made by the Minister under section 63 of the Act, published as Government Notice 141 of 2015 in Government Gazette Number 38503 of 25 February 2015;

"hedge fund FSP"

means an authorised hedge fund FSP as defined in the Code of Conduct for Discretionary Financial Services Providers published under the FAIS Act;

"hedging arrangements"

means a combination of trades in terms of which long and short exposure of similar assets may be netted before calculating exposure;

"leverage"

means the use of securities, including derivative instruments, short positions or borrowed capital to increase the exposure beyond the capital employed to an investment;

"manager"

means a manager of a QI fund or a retail hedge fund, whichever may be applicable;

"money market instrument"

has the same meaning as contemplated in Board Notice 90 of 2014, published in Government Gazette Number 37895 of 8 August 2014;

"net asset value"

means the total market value of all assets in a portfolio including any income accruals and less any deductible expenses such as audit fees, brokerage and service fees;

"netting arrangements"

means a combination of trades in terms of which long and short assets with exactly the same exposure may be netted before calculating the exposure;

"nominee"

means a nominee approved under section 76 of the Financial Markets Act;

"prime broker"

means a person offering prime brokerage services, such as lending money or securities for the purpose of short selling, clearing and settlement of trades, operational support facilities and customised technology and acting as counterparty to finance or execute transactions in securities;

"qualified investor"

means any person, who invests a minimum investment amount of R1 million per hedge fund, and who—

"qualified investor hedge fund" or "QI fund"

means a hedge fund in which only qualified investors may invest;

"retail hedge fund"

means a hedge fund in which any investor may invest;

"securities"

means securities as defined in section 1 of the Financial Markets Act;

"short selling"

means the sale of securities that the seller does not own, or a sale that is completed by the delivery of a security borrowed by, or for the account of the seller;

"systemic risk"

refers to systemic risk as defined in the Financial Markets Act;

"total expense ratio"

means a measure of a portfolio's assets that have been expended as payment for services rendered in the management of the portfolio or fund, expressed as a percentage of the average daily value of the portfolio or fund calculated over a period of a financial year by the manager of the portfolio or fund;

"total exposure"

means the aggregate of the absolute value of the exposures of all the long and short securities in the portfolio or fund; and

"value-at-risk"

means a measure of a maximum expected loss of a portfolio at a given confidence level over a specified time period.