Collective Investment Schemes Control Act, 2002 (Act No. 45 of 2002)Board NoticesRules for the administration of a collective investment scheme in participation bonds2. Valuation of property and screening of borrower |
Before granting a loan upon the security of a participation bond, the manager must:—
| (a) | take into account the financial standing, and the ability, of the borrower to make repayments of the loan; |
| (b) | arrange for the immovable property to be hypothecated under the participation bond, to be valued by a person who is independent from the manager and any of the manager's associates and, in the opinion of the manager, who is competent to make such a valuation and who must, in assessing the value of the immovable property, take cognisance of the type of immovable property, its locality, its state of repair, its ability to be sold and its income producing potential; and |
| (c) | ensure that a documented risk management programme is in place in order to assess the value of the property. The risk management programme must stipulate that an assessment of the property is to be conducted at least once in every three years. |