WHAT IS THE STRUCTURE OF THE RETAIL FUNDS MARKET? WHAT HAVE BEEN THE MAIN TRENDS OVER THE LAST YEAR? - BY FRANCISCO KHOZA AND MOGOLA MAKOLA
Wednesday, January 25, 2012
Closed-ended retail funds are CISs with a limited number of securities in issue. They are normally created as open-ended retail funds and then change into closed-ended retail funds. This normally happens when the fund has raised the required capital and the there are typically no more shares available from the fund for subscription (for example, in the case of a CIS in property). It is also important to note that there can be various other reasons why an open ended fund may become closed. In practice, both open-ended retail funds and closed-ended retail funds are subject to the same regulation.

SOUTH AFRICA: FINANCIAL SECTOR REFORMS AND INVESTMENT FUNDS - BY FRANCISCO KHOZA
Wednesday, January 25, 2012
Before the Collective Investment Schemes Act 2002 (CISCA) was enacted, a practice described as white labelling emerged with the CIS industry in South Africa. White labelling is the practice where a third party, who does not have the capacity or the intention to establish a CIS, requests a CIS manager to establish a portfolio in the name of the third party under the CIS manager's registered CIS.

GETTING THE DEAL MINING 2011 SOUTH AFRICA - BY CLAIRE TUCKER AND SANDRA GORE
Tuesday, January 24, 2012
To what extent does the state control mining rights in your jurisdiction? Can those rights be granted to private parties and to what extent will they have title to minerals in the ground? Are there large areas where the mining rights are held privately or which belong to the owner of the surface rights? Is there a separate legal regime or process for third parties to obtain mining rights in those areas?

GETTING THE DEAL THROUGH - CLIMATE REGULATION 2012 - SOUTH AFRICA - BY SANDRA GORE AND CLAIRE TUCKER
Tuesday, January 24, 2012
South Africa ratified the United Nations Framework Convention on Climate Change (UNFCCC) in August 1997 and acceded to the Kyoto Protocol in July 2002. As South Africa is classified as a non-annex I country, it is not required to meet targets and timetables for emission reductions in the Kyoto Protocol's first stage of commitment, ending in 2012. Heavier burdens are placed on developed nations (or annex I countries) than on developing countries under the principle of 'common but differentiated responsibilities'.

BULLYING TACTICS: THE INTRODUCTION OF MARGIN SQUEEZE INTO SOUTH AFRICAN COMPETITION LAW - BY ELISHA BHUGWANDEEN AND ANN BONIWELL
Friday, January 06, 2012
The recent decision of the Competition Appeal Court ("CAC") in Senwes Limited v the Competition Commission (Case no. 87/CAC/ FEB09) imported into South African competition law the concept of a margin squeeze, affirming in principle the adoption of foreign jurisprudence when interpreting or applying the provisions of the Competition Act no. 89 of 1998 ("Competition Act"). While the order of the CAC was subsequently overturned by the Supreme Court of Appeal on jurisdictional grounds, the decision of the CAC insofar as it relates to introduction of a margin squeeze under section 8(c) of the Competition Act remains in effect.

TAX UPDATE - 2011 FOURTH QUARTER
Thursday, January 19, 2012

TAX UPDATE - 2011 THIRD QUARTER
Monday, October 17, 2011

AUGUST 2011 TAX NEWSLETTER
Tuesday, August 30, 2011
A draft Taxation Laws Amendment Bill of 2011 was publicly released on 2 June 2011, which contained many far reaching changes. The Bill proposed provisions with retrospective effect, for example th 18-month suspension of section 45 (intra group transactions) of the Income Tax Act, no 58 of 1962 ("the ITA").

DRAFT CUSTOMS CONTROL BILL RELEASED FOR SHORT SECOND ROUND OF COMMENT
Tuesday, August 23, 2011
The Customs and Excise Act No. 91 of 1964 (“Act 91 of 1964”) is in the process of being re-written in its entirety. Once the re-write process is complete, Act 91 of 1964 will be superseded and will be replaced by a Customs Duty Act; a Customs Control Act and an Excise Duty Act. On 18 April 2011 a second draft of the Customs Control Bill (“Draft Customs Control Bill”) was released for a short round of comment. Comments are due by 16 May 2011.

REVISED PROPOSALS REGARDING HYBRID EQUITY INSTRUMENTS AND THIRD PARTY BACKED SHARES - SECTIONS 8E AND 8EA
Thursday, August 11, 2011
One of the proposed amendments was intended to increase the redemption period central to the application of section 8E from 3 years to 10 years. If the proposal became law, it would have meant that in order to avoid the application of section 8E, an investor would have had to hold a share for at least 10 years and a day before redemption, which usually would not be feasible. Another proposal relating to section 8E was intended to extend the application of section 8E to foreign dividends, with the consequence that both domestic and foreign dividends received or accrued in respect of a hybrid equity instrument would be deemed to be interest in relation to their recipient. The reaction to the proposal to increase the redemption period was that it would place many funding structures at risk.

INTEREST DEDUCTIBILITY ON SECTION 44, 45 AND 47 TRANSACTIONS
Friday, August 05, 2011
Section 45 allows the transfer of assets within a group of companies tax-free. The section gives companies “roll-over relief” and facilitates transfers between group companies.

TAX UPDATE - 2011 SECOND QUARTER
Friday, July 08, 2011

THE PROPOSED SUSPENSION OF SECTION 45 OF THE INCOME TAX ACT (INTRA-GROUP TRANSACTIONS)
Friday, June 10, 2011
On 2 June 2011, National Treasury released the Draft Taxation Laws Amendment Bill 2011 for public comment (“the Bill”). Amongst the various amendments giving effect to the 2011 Budget Review tax proposals, the Bill also contains anti-avoidance measures one of which includes a proposed “suspension” of section 45 of the Income Tax Act with immediate effect.

SARS ATTACKS PREFERENCE SHARE FUNDING
Wednesday, June 08, 2011
Section 8E of the Act, in its present form, acts as an anti-avoidance mechanism in circumstances where dividends are issued on so-called “hybrid equity instruments”, typically preference shares which exhibit elements of both equity shares and loans. Dividends declared on these instruments are taxed as if they are interest in the hands of the holder but no deduction is allowed for the issuer.

TAX UPDATE - 2011 FIRST QUARTER
Friday, April 15, 2011

• Consumer Protection Act
• Proposed Labour Law Amendments
• New Companies Act
• NHI