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

Part XII : General

105. Separation of funds of investors and other persons
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(1)A manager must open and maintain a separate operational trust account controlled by the trustee or custodian for each or for all the portfolios administered under its collective investment scheme at a registered bank and must on the date of receipt of any payment in cash, cheque, draft or other instrument from or on behalf of an investor or on the first business day thereafter, deposit in such account either the cash, cheque, draft or other instrument by means of which such payment is made or, alternatively, deposit for same day value in such account funds equal to the amount of such payment.

 

(2)Funds deposited into an operational trust account referred to in subsection (1) may only be withdrawn for the purposes of making payment—
(a)to the investor, person or manager entitled to such payment; or
(b)in terms of this Act, any other law and the deed: Provided that if after such withdrawal any deposited cheque, draft or other instrument against which such withdrawal was made is not subsequently honoured, the manager must immediately pay the shortfall arising from such default into the operational trust account or cancel any participatory interest issued in respect of such defaulting payment.

 

(3)Any excess remaining in the operational trust account after payment of or provision for all claims of investors whose funds have, or should have been deposited in such account, is not trust property as determined in section 71.

 

(4)The division of the court having jurisdiction over a manager may, on application by an association or the registrar or by any other person having a financial interest in or claim against an operational trust account, on good cause shown, prohibit such manager from operating such account in any way and may appoint a curator to control and administer such account with such duties and powers in relation thereto as the court may deem fit.