Form MA 1

Manager Application

APPLICATION FOR APPROVAL TO OPERATE A COLLECTIVE INVESTMENT SCHEME IN HEDGE FUNDS
FULL NAME OF MANAGER:
FULL NAME OF PERSON COMPLETING APPLICATION:
CONTACT DETAILS OF PERSON COMPLETING THE APPLICATION
TELEPHONE: EMAIL:
Please send the completed form, supporting documents and prescribed fee (see the Financial Services Board Fees available on the Board’s website) to the address below.
Financial Services Board
Riverwalk Office Park
Block B
41 Matroosberg Road
Ashlea Gardens, Extension 6
Pretoria
0181
South Africa / Telephone: 012428 8000
Website:

SECTION A

GENERAL DETAILS OF MANAGER AND PROPOSED ACTIVITIES

  1. NAME OR PROPOSED NAME OF MANAGER
  1. NAME OR PROPOSED NAME OF SCHEME
  1. CATEGORY OF HEDGE FUND APPLIED FOR:

QUALIFIED INVESTOR HEDGE FUND (QIHF)
RETAIL HEDGE FUND (RHF)
  1. LEGAL STRUCTURE OF SCHEME(S):

QIF / RIHF
COLLECTIVE INVESTMENT SCHEME (CIS) TRUST
EN COMANDITE PARTNERSHIP
  1. Is the Manager currently registered with the FSB as a manager under the Collective Investment Schemes Control Act 45 of 2002?

YES / NO
  1. If yes, provide the name of the FSB registered entity and relevantregistration number.

NAME OF ENTITY
REGISTRATION NUMBER
  1. If the answer to 5 above is ‘’yes’’, does the Manager intend using the manager named in 6 above, to register a scheme in hedge funds?

YES / NO

Note: If the answer to 7 above is ‘’yes’’, complete numbers 18 to 20 only.

  1. Has the Manager registered a company that will apply for registration as a CIS manager in hedge funds?

YES / NO

Note: If the answer to 8 is “no”, the application cannot be taken any further.

  1. Is the company making the application already operating?

YES / NO
  1. If “yes” to 9, what is the registered name of the company?
  1. With respect to 10 above, what is the registration number of the company?
  1. What is the address of the registered office or proposed registered office of the manager?

Tel: / Fax: / E-Mail: / (This address will be used by the FSB for future contact)
  1. What is the income tax reference number of the company?
  1. What is the date of incorporation of the company?
  1. If the answer to 9 is “no”, when does the company intend commencing operations as a CIS manager in hedge funds?
  1. Have certified copies of at least the CM1 and CM2 (or their equivalent) and any other CM forms received from CIPRO pertaining to the registration of the manager, attached as part of the application?

YES / NO

SCHEDULE REFERENCE:

  1. Have original copies of the Manager’s tax clearance certificate been submitted as part of the application?

YES / NO

SCHEDULE REFERENCE :

  1. Has the Manager submitted one or more scheme deeds as part of the application?

YES / NO

SCHEDULE REFERENCE:

  1. In respect of each scheme, please provide a 3 year business plan including an outline of the nature and scale of the proposed regulated activities, plans for the future development of that business and particulars of the arrangements for the management of that business. The operational structure outlined in the business plan should include, inter alia, adequate operational policies and procedures, internal control procedures and appropriate oversight of the Manager’s activities including management of the Manager’s risk. The operational structure should reflect the scope and degree of sophistication of the proposed regulated activities of the Manager. Any proposals to outsource functions should be set out, to include the functions to be outsourced, the service provider(s) who will undertake the functions together with details of the proposed oversight programme to be undertaken by the Manager in order to ensure that the Manager’s responsibilities in terms of these outsourced functions are discharged in a manner that does not result in any loss to the investor.

SCHEDULE REFERENCE:

  1. Please provide a business risk assessment for the Manager which evidences that the business has considered the financial crime risks, including but not limited to money laundering, to which it may be exposed once its business activities commence, and how it will address them. The risk assessment should consider the risk profile of each scheme where applicable.

SCHEDULE REFERENCE:

SECTION B

MANAGEMENT AND CONTROL

Directors:

  1. Please list all current or proposed directors of the Manager. Identify, as applicable, the Chairperson, Chief Executive, Managing Director, Finance Director, Non-Executive Director, Independent Non-Executive Director and any other Directorwith specific duties.

Full name of individual / Identity Number / Country of Residence / Title/duties / Executive/
Non-Executive / Date of appointment

NOTE: Each Director listed is required to complete form PQ.

  1. Where the response to questions 9 is “yes”, please give details of any changes to the Manager’s board of directors (including the removal of any director) during the last 5 years if applicable. In each case, please give the name of thedirector,identity number, the date of and the reason for the change/removal:

Full name of individual / Identity Number / Change and reason / Date of change
  1. Please give details of any financial guarantees given to or in respect of the Manager by any of its directors:

Company Secretary:

  1. Please give the name and company registration/identity number of the company secretary of theManager:

Name / Company Registration Number/ Identity Number

Compliance Officer:

  1. Please give the name of the compliance officer of the Manager (if the compliancefunction is to be outsourced to another party, please advise the name of the individual in the managerresponsible for the oversight of the compliance function.

Full name of Individual / RSA Identity Number

SECTION C

GROUP STRUCTURE/OWNERSHIP STRUCTURE

  1. Is the Manageris part of a group.

YES / NO
  1. If “yes”, please provide a group structure diagram including details of any company or partnership in which the Manager or its holding company has an equity interest or is a partner. Please also include all related companies connected by commonownership, trading name, partnership or special trading arrangement. In relation to each company other than the Manager, please state the place of incorporation, principal activities and registered office.

Please also provide details of the percentage interest which the Manager or its holding company has in each such company or partnership.

SCHEDULE REFERENCE:

  1. Where the Manager is not part of a group, please provide the names, identity numbers and addresses of the beneficial owners of the Manager’s share capital, showing the percentage interest of each beneficial owner:

Full name of Individual / Identity Number / Address / Percentage interest
  1. Where the beneficial owner of the Manager’s share capital is a trust or company, please complete the table below. Where more than one trust/company is the holder of shares in the Manager, complete a table for every such trust/company.

Name of beneficiary/
shareholder / Identity Number / Address / Percentage Benefit/
Shareholding
  1. Please identify any other controller[1]of the Manager not named above:
  1. Please identify any other registration /approval / licence granted by the FSB to the Manager or any group company of the Manager and the name(s) of the licensee(s) and relevant licence number:

MANAGER:

SCHEDULE REFERENCE:

SECTION D

STAFFING

  1. Please state below the number of staff (including directors and managers), who areto beengaged in the regulated activities of the Manager. If any are part-time/non-executive,please express in terms of full-time equivalents:

On start date:

Number of staff / Employer (if not the Manager – for example, if staff are employed by a separate services company or similar)

Planned after 1 year:

Number of staff / Employer (if not the Manager)
  1. Please attach a staff “organogram” detailing directors, managers and all other staff and reporting lines within the Manager.

SCHEDULE REFERENCE:

SECTION E

FINANCIAL INFORMATION

  1. Please state the Manager’s year end or proposed year end:
  1. For existing companies who replied “yes” to question 9, please supply a copy of the Manager’s latest audited financial statements, including directors’ and auditors’ reports. If they are for anaccounting periodending more than 6 months before the date of this applicationplease also supply a balance sheet and profit and loss account to the last 6 months. If the Manager is part of a group thelatest audited group accounts must also be supplied.

Attached: / Yes / No / N/A
Schedule Ref : ______
Group
Attached: / Yes / No
Schedule Ref : ______
  1. If the Manager has not yet commenced business or has done so within the 12 months previous to the date of application please supply a business plan for 3 years that includes a capital adequacy projection. The business plan will be that of the manager and will include the effect of the business plan of the individual schemes referred to under number 19. Details of proposed target market, marketing strategy, product mix, resource commitments inter alia must be included. All assumptions should be clearly articulated and demonstrably incorporated into the business plan.

Attached: / Yes / No
Schedule Ref : ______
  1. If the Manager’s financial position has changed materially between the date of the financial statements supplied and the date of the application please give details:
  1. Please state whether the Manager has any sources of external finance (including

facilities unused at the time of application):

YES / NO
  1. If Yes, please give the following details (If the sources of external finance are disclosed in the accounts supplied, details given can be restricted to any changesin the situation since thedate of the accounts):

Lender: (in the case of a subordinated loan please submit a copy of the loan

agreement)

Loan agreement Attached: / Yes / No
Schedule Ref : ______

Amount:

Nature (e.g. secured or unsecured):

Repayment terms:

Interest payable: (quoted rate, amount paid in current year, payable in next 3 years)

  1. If the finance is secured, please give details of the nature of the security (includingthe type of security) and a brief description of assets pledged as security and their value:
  1. Please state whether the Manager has any other pledgeagainst its assets not disclosed above and, if so, please give details:
  1. Please state whether the Managerhas given, in writing, any financial guarantees, indemnities or other commitments, including letters of comfort which are in effect at the date of the application including those relating to other group companies. If such financial guarantees etc. have been given, please give details. Use a separate schedule if necessary.

SCHEDULE REFERENCE:

  1. Please state whether any financial guarantees, indemnities or other commitments,including letters of comfort, have been given to the Manager including those received from other group companies. If there are such financial guarantees etc.,please give details. Use a separate if necessary.

SCHEDULE REFERENCE:

SECTION F

AUDITORS

  1. Please state:

The name of the Manager’s auditor:

Theaddress of the auditor:

The telephone number of the auditor:

The partner to be responsible for the audit:

  1. Please provide a copy of the auditor’s acceptance to act as auditor of the Manager(on an official letterhead of the auditor)

Attached: / Yes / No
Schedule Ref : ______
  1. Please provide details of any experience of the auditor with the auditing of hedge funds.
  1. Please providethe IRBA registration number of the auditor.

SECTION G

INSURANCE AND INDEMNITY

  1. Please give details of the Manager’s insurance cover against liabilities incurred in carrying on regulated activities or proposed regulated activities. This should include an indication of whether the Manager has, or proposes to have, any cover in respect of the following together with the amounts for each:

  • Professional Indemnity Insurance
/ Yes / No / R
  • Employee Fidelity Insurance
/ Yes / No / R
  • Insurance against theft or other loss of negotiable instruments, warrants or other property belonging to the Manager or to its clients/customers.
/ Yes / No / R
  1. Where any part of the above cover is under a group policy, please provide details of that policy.

SCHEDULE REFERENCE:

  1. Please give details of any claims brought against and/or made by the Manager which were(or, according to the policy terms, should have been) notified to its insurer under these or any similar policies in the last three years precedingthe date of this application (whether or not any payment was made by the insurer):

SECTION H

ANTI-MONEY LAUNDERING PROCEDURES

  1. Please supply a copy of the Manager’s procedures for complying with the Financial Intelligence Centre Act 38 of 2001.

Group
Attached: / Yes / No
Schedule Ref : ______

SECTION I

DISASTER RECOVERY

  1. Please attach a summary of the Manager’s plans, procedures and/or agreements for succession and disaster recovery/business continuity.

Group
Attached: / Yes / No
Schedule Ref : ______

SECTION J

OTHER INFORMATION

  1. Where the Manager is an existing company referred to under number 9, please give full details of any of the following. If none, please state “none”.

(a)Any application to wind up the Manager or any Group Company

(b)The winding up of any subsidiary of the Manager at any time in the previous 10 years.

(c)Civil legal proceedings lost (including by default) or settled on terms involving payment by the Manager (including payment of another party’s costs) within the last 3 years. This should include details of whether the Manager has agreed as a result of any such legal proceedings to an out of Court settlement:

(d)Please state whether the Manager is involved in any such proceedings as referred to in (c) at the time of the application:

(e)Please give details of any criminal convictions of the Manager or any group company:

(f)Please state whether the Manager at any time prior to the date of application, had been subjected to proceedings that may have affected or affected the status of the manager in any way such as winding up, liquidation, business rescue and statutory management proceedings or are there any such proceedings pending.

(g)Has the manager had any judgement given against it in any civil or criminal proceedings, in South Africa or elsewhere or are there any proceedings pending which may lead to such a judgement.

(h)Please state whether, at any time in the last 10 years, the Manager has been refused or had withdrawn any licence, recognition or authorisation under the legislation of any country or whether the Manager has ever been refused or had revoked any authorisation to carry on investment related activities in any country:

(i)Please provide details of the imposition of any non-standard conditions on any licence or authorisation of the Manager to carry on business within the last 10 years:

(j)Please state whether the Manager has ever been subject to any enforcement action by any regulatory body in any country in relation to its activities:

(k)Please state whether the Manager’s affairs have ever been investigated by any regulatory body in any country in relation to its activities, other than investigations conducted in the course of normal monitoring and surveillance procedures where there were no material adverse findings:

(l)Please state whether the Manager or any of its senior management or shareholders have been disciplined in the Republic of South Africa or elsewhere in the previous 10 years by any regulatory or supervisory organisation or professional body:

(m)Please state whether the Manager has ever been refused or had revoked membership of any Stock Exchange or related association or body:

(n)Please provide details of and reasons for any changes in the bankers, auditors or legal advisers to the Manager within the last 3 years:

.

  1. Please provide any additional information, which should be brought to the attention of the Registrar, which may have an impact on the evaluation by the Registrar of this application

SCHEDULE REFERENCE:

SECTION K

DECLARATIONBY MANAGER

We declare that all the information submitted with and as part of this application is complete and correct to the best of our knowledge and belief and that we are not aware of any other facts which should be brought to the attention of the FSB. We undertake to inform the FSB within 21 days of any material changes to the application.

We undertake that if and for as long as the Manager is approved under CISCA or under any subordinate legislation, we will notify the FSB or its successors of any material changes in the answers to the questions above.

Name of first signatory:
Position:
Signature:
Name in block capitals:
Date:
Name of second signatory:
Position:
Signature:
Name in block capitals:
Date:

NOTES

Note 2:“Controller” means:-

(a)In relation to a body corporate, a person who, either alone or with any associates, is entitled to exercise, or control the exercise of, 15% or more of the voting power at any general meeting of the body corporate or another body corporate of which it is a subsidiary; and

(b)In relation to an unincorporated association:-

(i)Any person in accordance with whose directions or instructions, either alone or with those of any associate or associates, the officers or members of the governing body of the association are accustomed to act (but disregarding advice given in a professional capacity); and

(ii)Any person who, either alone or with any associate or associates, is entitled to exercise, or control the exercise of, 15% or more of the voting power at any general meeting of the association;

“Associate” in relation to any person means that person’s wife, husband or minor child or stepchild, any body corporate of which that person is a director, any person who is an employee or partner of that person and, if that person is a body corporate, any subsidiary of that body corporate and any employee of any such subsidiary.

SECTION L

APPLICATION FOR SCHEME MANAGER

CHECKLIST

ITEM / REF / Attached
Original Tax Clearance Certificate / 17
Certified copies of CIPRO Registration documents / 16
Scheme Deed(s) / 18
Certified copies of ID documents of directors / 21
Certified copy of regulated certificates/identity documents of company secretary / 24
Group Structure diagram / 27
Certified copies of ID for beneficial shareholders/ beneficiaries / 28 & 29
Staff Organogram / 33
Audited Financial Statements / 35
Group Audited Financial Statements / 35
Management Accounts / 35
Business Plan of Scheme / 19
Business Plan of Manager / 36
Sources of External Finance / 38
Subordinated loan agreement/s / 39
Details of guarantees given / 42
Details of guarantees received / 43
Insurance and Indemnity / 48
FICA Compliance Procedures / 51
Disaster Recovery Plan / 52
Other

Page 1 of 26

[1] “ Controller” is defined under “Notes” at the end of this form.