Regulatory Alerts2018-03-26
CISCA Circular No 2: Foreign Collective Investment Scheme Requirements
The South African Financial Services Board issued CISCA Circular No 2 to mandate specific minimum investment and operational requirements for foreign collective investment schemes approved under the Collective Investment Schemes Control Act. The circular requires approved schemes to restrict borrowing to 10 percent solely for redemptions, limit derivatives to efficient portfolio management without leverage, ensure 90 percent of holdings meet exchange listing or investment grade credit rating standards, and prohibit scrip borrowing and certain fund-of-funds structures. Scheme managers must incorporate these rules into their prospectuses, submit amended documents within six months, and provide a compliance letter by 14 April 2006 to maintain market approval.