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Definition

This Act replaces the Unit Trust Control Act and the Participation Bonds Act and it came into effect in 2003. It regulates any scheme where members of the public invest in a portfolio and share in its risks and returns. It ensures proper disclosure and protects the investor. In terms of the Act, unit trust management companies no longer have to disclose a buying and selling price. Instead consumers are told what their commissions and other fees are. The price paid for a unit trust will then be its net asset value. On-going management fees and marketable securities tax on trades in the unit trust portfolio must be deducted in the calculation of net asset value. There is also some relaxation of the restrictions applied to fund managers. In the year to 31st December 2022, investors piled R108bn into collective investment schemes (CIS). The total amount in these schemes to R3,14 trillion split roughly equally between multi-asset portfolios and the rest in interest-bearing protfolios and property. Obviously, the value of CIS investments have been impacted by the major correction taking place on world markets since the peak in the S&P500 index on 3rd January 2022.

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