FSCA COMMUNICATION 16 OF 2026 (CIS)

EXTENSION FOR PERIOD OF COMPLIANCE WITH FSCA CONDUCT STANDARD 3 OF 2025 (CIS) – REQUIREMENTS FOR MANAGERS OF COLLECTIVE INVESTMENT SCHEMES

1. PURPOSE

The purpose of this Communication is to inform stakeholders of the coming into effect of FSCA Conduct Standard 3 of 2025 (CIS) – Requirements for Managers of Collective Investment Schemes (Conduct Standard) and to—

1.1. clarify the practical implications for compliance with the Conduct Standard; and

1.2. notify stakeholders that the FSCA published FSCA CIS Notice 3 of 2026 (Notice), which extends the period for compliance with section 16 of the Conduct Standard until 31 August 2027.

2. BACKGROUND AND CONTEXT

2.1. On 14 August 2025, the FSCA published the Conduct Standard, which addresses inter alia, the gaps identified by the Financial Sector Assessment Program (FSAP) conducted by the International Monetary Fund (IMF). These requirements are aimed at enhancing the regulatory architecture of collective investment schemes (CIS) in South Africa and ensuring alignment with international best practice, thereby further enhancing resilience to shocks and contagion.

2.2. Following its promulgation, the Conduct Standard provided a 12-month transitional period to affected stakeholders to enable them to regularise their affairs to ensure timeous compliance with the Conduct Standard. This means that the due date for compliance is scheduled for 14 August 2026.

2.3. However, the FSCA has noted various queries, concerns and requests for clarification concerning operationalisation of certain requirements, particularly where stakeholders perceive a dependency on Determinations that are enabled through the Conduct Standard.

2.4. It is important to note that making of Determinations in terms of the Conduct Standard is discretionary, not compulsory. Determinations help operationalise certain aspects of a Conduct Standard and in some instances establish formalities (e.g. formalisation and standardising the format of notification forms). However, the absence of a specific Determination does not suspend the underlying obligation to comply. Consequently, CIS managers are required to ensure compliance with the substantive requirements of the Conduct Standard unless the FSCA has specifically accommodated and communicated an exception.

3. DETERMINATIONS RELATING TO REQUESTS FOR APPROVALS AND NOTIFICATIONS – SECTIONS 8, 9 AND 14

3.1. The Conduct Standard enables the FSCA to determine the form, manner and content of a request for approval of the head of a compliance function, and notifications relating to the appointment of the head of a risk management function; the intended termination of a head of a control function; and the outsourcing of a control function.

3.2. Industry has queried whether in the absence of the relevant Determinations it will be possible to give effect to and comply with all the relevant requirements come 14 August 2026.

3.3. In this regard, it is the FSCA’s view that the absence of standardised approval and notification forms – given that a Determination has not been made - does not create a material barrier to implementation. It simply means that in the period from 14 August 2026 until the time these matters may be confirmed by Determination, a manager must submit such a request/notification in the form and manner of its choice. As such, managers must comply with the relevant requirements.

4. DETERMINATION RELATING TO PROSPECTUS REQUIREMENTS – SECTION 16

4.1. Section 16(1) of the Conduct Standard states that a collective investment scheme manager (manager) must have a prospectus for all its approved collective investment schemes and portfolios, and section 16(4) states that a prospectus referred to in subsection (1) must—

(a) provide a holistic and transparent view of the collective investment scheme and all its approved portfolios;

(b) provide a disclosure of relevant material matters, including matters that may require a ballot from the investors;

(c) include an indication of the reports that the investor is entitled to receive and the frequency of such reports; and

(d) provide for any other matters determined by the Authority.

4.2. In this case, industry concerns run deeper than mere uncertainty regarding how to execute an administrative application. The concerns highlighted that if it is the FSCA’s intention to determine further matters that must be provided for in a prospectus, there is a risk that managers will formulate prospectuses that are based on subjective assumptions of what the FSCA will in due course require, and it is possible that these assumptions might be incorrect, which will have unintended and costly consequences. For example, it could necessitate substantial revisions after implementation, resulting in avoidable costs and operational inefficiencies. A further potential risk is that it might result in inconsistent approaches emerging across the industry, as different managers seek to interpret and anticipate requirements that have not yet been published.

4.3. Considering the nature of the concerns raised, especially those surrounding costs and operational inefficiencies, the FSCA has, through the publication of the Notice, extended the period to comply with section 16 of the Conduct Standard until 31 August 2027.

5. NEXT STEPS

The FSCA will in due course publish a draft Determination, to be made under sections 8; 9; 14 and 16 of the Conduct Standard, for public consultation.

6. ENQUIRIES

For more information regarding this Communication please contact the Regulatory Frameworks Department of the FSCA for the attention Andile Mjadu and Nkateko Nkhwashu at Andile.Mjadu@fsca.co.za and Nkateko.Nkhwashu@fsca.co.za.

KATHERINE GIBSON
DEPUTY COMMISSIONER
FINANCIAL SECTOR CONDUCT AUTHORITY

Date of publication: 14 AUGUST 2026