FSB concerned about hedge funds’ failure to register
If you are invested in a hedge fund in South Africa, it is at risk of regulatory and enforcement action by the Financial Services Board (FSB) if it does not register as a collective investment scheme, in line with new legislation.
The registrar of collective investment schemes at the FSB is concerned that, to date, no applications have been received from hedge fund operators, almost three months since the declaration to register came into effect.
In February, the Minister of Finance declared hedge funds as collective investment schemes with effect from April 1. All South African hedge fund operators are thus required to apply for registration as a hedge fund in accordance with the Collective Investment Schemes Control Act, in order to continue operating, the FSB says.
“The closing date for applications is September 30, 2015, and anyone who continues operating hedge funds after this date without authorisation will be doing so in contravention of the regulation, and will be subject to regulatory and enforcement action by the FSB,” Jurgen Boyd, the deputy registrar of collective investment schemes, warns.
The development to classify hedge funds as collective investment schemes places the oversight and supervision of these financial products under the jurisdiction of the FSB, and operators were given six months to apply for registration as hedge funds. This is good for both investors and the local hedge fund industry, because it means that South Africa has one of the most regulated hedge fund industries in the world, Boyd says.
Be careful when dealing with Leon Lincoln and BrownLinc Consulting of Eldorado Park, the FSB warned this week. Neither Lincoln nor BrownLinc are authorised to render any financial advice and intermediary services, the regulator says.
The FSB says Lincoln and BrownLinc are helping consumers to claim pension fund surpluses, register for Unemployment Insurance Fund benefits and apply for personal loans. “It is the FSB’s view that the two are conducting an unregistered business and providing advisory and intermediary services without the necessary authorisation. This means that the public is not protected,” the FSB says.
You can check whether an entity or person has been authorised by the FSB to provide financial services by phoning 0800 110 443 or going to www.fsb.co.za – Staff Reporter