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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

Chapter ll : Money Market Portfolio

6. Inclusion limits

 

(1) A manager may include money market instruments, whether listed on an exchange or not, in a money market portfolio, subject to paragraph 8(7) of this Notice, and the limits as specified in the table below.

 

Table 2

 

Item

Categories of non-equity securities

Limits being the maximum percentage of the aggregate market value of the portfolio


Per issuer/guarantor as applicable

In aggregate for all issuers/guarantors as applicable

1

Money market instruments issued or guaranteed by:

 

100%

 1.1

the government of the Republic of South Africa;

100%

100%

 1.2

any foreign government which has been assigned a foreign currency sovereign rating not lower than that of the Republic of South Africa;

100%

100%

 1.3

the South African Reserve Bank.

100%

100%

2

Money market instruments issued or guaranteed by a local or foreign bank which forms part of a group of companies (in terms of the Companies Act) of which the holding company is listed on an exchange:

 

100%

 2.1

with a market capitalisation for the listed group holding company of more than R 20 billion;

30%

100%

 2.2

with a market capitalisation for the listed group holding company of between R 2 billion and R 20 billion.

20%

100%

3

Money market instruments issued or guaranteed by:

 

100%

 3.1

a public entity under the Public Finance Management Act,1999 (Act No.1 of 1999); and

10%

100%

 3.2

any local or foreign entity which is listed on an exchange.

10%

100%

4

Money market instruments issued or guaranteed by entities not described above where such security:

 

25%

 4.1

Is listed and traded on an exchange

5%

25%

 4.2

Is not listed on an exchange,

5%

10%

 

 

(2) In order to determine the market capitalisation of an internationally listed group holding company, a conversion must be done to Rand at the prevailing foreign exchange rate at the date of inclusion of the instrument and thereafter at least once every 30 days.

 

(3) Where, after the date of inclusion of any money market instrument in a money market portfolio, a reduced inclusion limit becomes applicable to that instrument, the manager must rectify the position within 30 days of such reduced limit becoming applicable: Provided that if the manager and the trustee are of the view that rectification would be detrimental to a particular portfolio, the manager must, within seven days of the date of becoming aware of the change in limits, submit a detailed plan setting out measures to rectify the position to the Registrar for consideration for approval.

 

(4) Where a manager is unable to comply with any limit prescribed in this paragraph through no fault of its own, the manager must, if the non-compliance is not rectified within 30 days of the date on which the manager becomes aware of the non-compliance, submit a detailed plan setting out measures to rectify the position to the registrar for consideration for approval.