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

Board Notices

Determination of Securities, Class of Securities, Assets or Classes of Assets that may be included in a portfolio of a Collective Investment Scheme in Securities and the manner in which and the limits and conditions subject to which Securities or Assets may be so included

1. Definitions

Purchase

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 the meaning so assigned to it, and unless the context otherwise indicates—

"AAOIFI"

means the Accounting and Auditing Organisation for Islamic Financial Institutions;

"assets in liquid form"

means—

(a)	any amount of cash consisting of Reserve Bank notes and coins;

(b)	any balance in an account with a-

(i)

bank;

(ii)	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

(iii)

foreign bank;

(c)	any positive net balance in a settlement account, other than a margin account, operated for the buying and selling of underlying assets;

(d)	any instrument determined in Chapter II of this Notice;

(e)	participatory interests in a money market portfolio referred to in Chapter II of this Notice;

on condition that the assets referred to in sub-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. In determining any limit under this Notice, exposure through a settlement account contemplated in paragraph (c) must be added to other exposures to the same issuer/guarantor;

"bank"

means a bank as defined in the Banks Act, or a mutual bank as defined in the Mutual Banks Act;

"Banks Act"

means the Banks Act, 1990 (Act No. 94 of 1990);

"Bills of Exchange Act"

means the Bills of Exchange Act, 1964 (Act No. 34 of 1964);

"guarantee"

means a guarantee, or an undertaking to provide the financial support necessary, to ensure full and timely debt service and redemption of a debt;

"index"

means the compilation of securities listed on an exchange or a number of exchanges or the compilation of prices or rates of non-equity securities, publicly available from a recognised index compiler, representing a statistical indicator of the aggregate value of the securities comprising the index, provided that the composition of such an index meets the same level of diversification as contemplated in this Notice;

"Islamic Bond (Sukuk)"

means a certificate of equal value representing undivided shares in the ownership of tangible assets, usufructs and services or (in the ownership of) the assets of particular projects or special investment activity, as defined by AAOIFI ;

"Islamic Compliant Instrument"

means an instrument held in a Shari'ah compliant portfolio, being a collective investment scheme in securities managed under the Act in compliance with the relevant standards of AAOIFI, structured in such a manner that the instrument held by the portfolio will be an instrument defined under paragraphs 2(1)(a);

"Mutual Banks Act"

means the Mutual Banks Act, 1993 (Act No. 124 of 1993);

"physical exchange traded fund"

means an exchange traded fund which tracks an index or the value of precious metals and which physically holds the underlying assets it is tracking;

"physical exchange traded notes"

means exchange traded notes whose issuer physically holds the underlying assets of the index they are tracking; and

"recognised index compiler"

means an entity which compiles and publishes indices which are acceptable to an exchange.