Collective Investment Schemes Control Act, 2002 (Act No. 45 of 2002)Board NoticesDetermination on the requirements for hedge fundsPart 4 : General Provisions Applicable to all Hedge Fund20. Prime Broker |
| (1) | A manager may only appoint a prime broker, that is— |
| (a) | an authorised user that has been admitted as an equity member under the exchange rules defined in the Financial Markets Act; or |
| (b) | a bank. |
| (2) | A manager must act with due skill, care and diligence when appointing a prime broker, and only appoint a prime broker that— |
| (a) | is financially sound at all times; and |
| (b) | has the necessary organisational structure appropriate for the services to be provided to the portfolio. |
| (3) | A manager must ensure that it is conversant with all counterparty and prime broker legal agreements, including re-hypothecation arrangements. |