JULY 2009

In this issue of the Investment Management Practice Area Newsletter we feature articles covering: developments relevant to collective investment schemes, hedge funds and negotiating investment mandates.

The articles on collective investment schemes relate to developments regarding the taxation of collective investment schemes and regulatory developments.

South Africa as a member of the Group of 20 Countries (G20) is considering reform in relation to the regulation of hedge funds. As a contribution to the reform process we feature a note on proposed principles that should inform hedge fund regulatory reforms in South Africa. This note is a summary of a submission that we made to an industry body representing hedge funds.

This issue also features an article that explores the extent to which pension fund trustees should negotiate investment mandates with asset managers.

Finally, in this issue we introduce two of our lawyers, Ms Mogola Makola (Partner) and Ms Berna Oluka (Associate) who advise on some aspects of investment management law.

We trust that you will find the articles relevant to your business.

IN THIS NEWSLETTER
New developments in the field of collective investment schemes
Inappropriate promotion of portfolios in a collective investment scheme in securities
Hedge fund regulatory reform in South Africa
Should trustees seek amendments to standard term investment mandates?
The use of CPIX in investment policies of collective investment schemes

New developments in the field of collective investment schemes
  By Mogola Makola
 

 

By now most people will have heard the rumours that the laws governing the taxation of collective investment schemes (“CISs”) is set to undergo a lot of changes. Currently, the provisions governing the tax treatment of CISs are scattered throughout the Income Tax (“ITA”). The proposed legislative amendments, which are contained in the Draft Taxation Laws Amendment Act of 2009 (“the Draft Bill”), will introduce a single provision (a new section 25BA of the ITA). Read more...

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Inappropriate promotion of portfolios in a collective investment scheme in securities
  By Francisco Khoza and Siphesihle Linda Nyoka
 


On 7 May 2009, the Registrar of Collective Investment Schemes (“Registrar”) issued CISCA Circular No. 10 (the “Circular”) dealing with the promotion of portfolios in a collective investment scheme in securities. Read more...

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Hedge fund regulatory reform in South Africa
 

By Francisco Khoza and Berna Oluka

 

 

The global financial crisis has caused a number of countries to reconsider their approach to the regulation of hedge funds. Leading the way has been the Group of Twenty countries (G20) that have agreed some proposals for the reform of hedge funds regulation. South Africa as a member of the G20 is considering what reforms, if any, it has to make. Read more...

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Should trustees seek amendments to standard term investment mandates?
 

By Francisco Khoza

 

 

It is not uncommon for the trustees of a pension fund (“Trustees”) to be met with resistance whenever they want to negotiate amendments to standard term investment mandates with investment managers. The usual response from some investment managers is that, their standard term mandate has been approved by the registrar of financial services (the “Registrar”) and has been accepted by other clients, without any changes. Faced with such a response should the Trustees still insist on negotiating changes to the standard term investment mandate in order to protect the pension fund’s position? Read more...

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The use of CPIX in investment policies of collective investment schemes
  By Berna Oluka
 

 

The South African Reserve Bank replaced CPIX as the official inflation indicator with CPI with effect from 1 January 2009. A number of collective investment schemes in securities (“CIS”) use CPIX as a benchmark in investment policies, for the calculation of certain charges and in the names of portfolios. As the structure of CPI is different to that of CPIX, the Registrar of Collective Investment Schemes (“the Registrar”) deemed it appropriate to replace the use of CPIX with CPI in respect of CIS. Read more...

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IN THIS ISSUE WE FEATURE:

MOGOLA MAKOLA

Partner
Tel
+27 11 669 9398
E-mail
m.makola@bowman.co.za

Mogola Makola is a Partner in the Corporate Department as a member of the tax practice area, where she specialises in domestic and international tax, with a specific interest in transactions involving derivatives. She joined Bowman Gilfillan in 2001 as a candidate attorney and was admitted as an attorney in 2003. She holds a BA and LLB degree from Rhodes University and a LLM (Tax) degree from the University of the Witwatersrand. In her work, she has advised some of South Africa’s big banks and has also advised some of the international banks. Some of the major transactions that Mogola has advised on include: the disposal by Barrick Gold Corporation of its shares in South Deep to Goldfields (value R13bn), advising HSBC on the tax structuring of offshore investments by South African residents, advising Morgan Stanley in relation to the structuring of a derivative trade involving South Africa counterparties (value R1,5bn), advising the Public Investment Corporation in relation to its investment in a private equity fund, advising various foreign clients with respect to their securities lending transaction and the broad based BEE ownership transaction by Mvelaphanda Group in with certain BEE trusts.

 

BERNA OLUKA

Associate
Tel
+27 11 669 9343
E-mail
b.oluka@bowman.co.za

Berna Oluka is an Associate in the Corporate Department. She obtained her LLB (cum laude) from the University of Pretoria in 2006. Berna joined the firm in January 2007 as a candidate attorney and was appointed as an Associate in the Corporate Department in February 2009. Berna has experience in general corporate and commercial law, compliance and regulatory law, securities law, mergers & acquisitions and investment management.

 

   
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