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

Notices

Determination of the Limits and Conditions for Third Party Named Portfolios of Collective Investment Schemes

Part Ill : Co-Named Portfolios

11. Agreements

 

(1) A manager must enter into an agreement with the financial services provider, which agreement must:—
(a) identify and address all possible areas of conflict of interest between the parties;
(b) indicate the functions of the respective parties in relation to the portfolio including all sub-contracting arrangements;
(c) outline how the manager will capitalise the portfolio should it not reach the minimum size as contemplated in paragraph 12;
(d) stipulate that the manager shall commit to the portfolio as if it were one of its own portfolios, in accordance with all relevant legislation;
(e) indicate that on termination of the agreement the portfolio remains the responsibility of the manager who shall continue to meet its commitment to investors and to rename, amalgamate or wind-up the portfolio;
(f) stipulate the extent to which the financial services provider will be entitled to participate in the manager's foreign allowance as contemplated in Exchange Control Regulations;
(g) stipulate that the manager's identity and role in the portfolio will be disclosed to the investor;
(h) stipulate that the financial services provider may not enter into a similar agreement with another manager;
(i) stipulate that the manager remains responsible for compliance with the Act and that the compliance function of the manager shall not be outsourced or delegated to another party;
(j) stipulate that the portfolio may only be marketed under its registered name; and
(k) stipulate that the financial services provider must render financial services of a discretionary nature in relation to the assets of the portfolio.

 

(2) Subject to the provisions of section 42, read with section 98, of the Act and paragraph 9 of this Notice, the manager must submit the agreement to the Registrar.

 

(3) A manager may not amend the agreement without prior written notice to the Registrar.

 

(4) Should the parties terminate the agreement, the manager must, within ten working days of the date of termination, inform the Registrar, in writing, that the agreement has been terminated and the manager must apply to the Registrar to:
(a) wind up the portfolio in accordance with section 102 of the Act; or
(b) amalgamate the portfolio with one of its portfolios in accordance with section 99 of the Act; or
(c) rename the portfolio in accordance with section 43(1) of the Act to reflect only the registered name of the manager.