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

Board Notices

Rules for the administration of a collective investment scheme in participation bonds

19. Distribution of funds received in reduction of principal debt
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(1)Subject to sub-rule (2), the manager is not be obliged to distribute any payment made in reduction of the principal debt owing by a mortgagor under a particular participation bond amongst all the participants in the scheme proportionate to their participatory interests in the scheme, but may in its sole discretion allocate such payment to any one or more of the participants.

 

(2)Any payment received by the manager as a result of legal proceedings taken against the mortgagor under a participation bond for the recovery of the amount due under such bond or a payment which:—
(a)represents a dividend received from the trustee, executor, liquidator or business rescue practitioner of the mortgagor, or
(b)is a payment received in terms of a compromise between the mortgagor and his creditors,

is the property of the participants in the scheme in which such bond is included to the extent of their respective participatory interests and must be allocated by the manager to the said participants proportionately to the extent of their participatory interests in the scheme.

 

(3)The manager must, subject to rule 12, immediately credit the proceeds of any participation bond repaid, whether in whole or in part, and any payment allocated in terms of sub-rule (1) or (2) to the account of the participant entitled to the payment and must thereafter deal with such payments in accordance with the instructions of such participant.