South Africa: FSCA submits draft CIS notice to Parliament on a determination relating to foreign collective investment schemes soliciting investments

On 6 February 2026, the Financial Sector Conduct Authority (FSCA) issued FSCA Communication 1 of 2026 announcing that a draft determination relating to foreign collective investment schemes (CISs) has been submitted to Parliament (draft Determination). The draft Determination follows the FSCA’s request for (and consideration of) written submissions from the public which were due on or before 11 October 2024.

The draft Determination sets out the requirements and conditions for foreign CISs soliciting investments in South Africa under the Collective Investment Schemes Control Act, 2002 (CISCA). It is intended to replace and repeal Board Notice 257 of 2013 (BN 257), which has governed these requirements and conditions since 13 December 2013. 

The draft Determination was created because:

• BN 257 has become outdated due to the shift from a predominantly rules-based to a principles-based regulatory approach; and
• the Financial Services Tribunal’s (FST) decision in Greenman Investments S.C.A., Sicav?Fis v FSCA Case No.: A2/2021 meant that a review of BN 257 was required. In this decision, the FST held that the FSCA has the discretion to categorise foreign CISs for the purposes of applying legislation that is not pre-stated as being applicable to foreign CISs, but such discretion is limited to a specific purpose (ie to apply the provisions of CISCA). 

The draft Determination retains the format of application for approval of a foreign CIS under section 65(1) of CISCA as contemplated under BN 257. However, it proposes to expand the conditions for approval under section 65(1) of CISCA. At a high-level, the draft Determination states that a foreign CIS applying for approval in terms of section 65(1) of CISCA will be required to satisfy the FSCA on an ongoing basis that, amongst others:   

• The manager of a foreign CIS will organise and control the foreign CIS in a responsible manner.
• The foreign CIS does not lend or advance any money, except that the foreign CIS may lend or offer to lend assets included in the foreign CIS in the manner, within the limits or on the conditions determined in the founding document or the instruments of incorporation or the prospectus.
• The investments that a foreign CIS proposes to offer for sale in South Africa have a risk profile that is not significantly higher when compared to the risk profile of similar investments in participatory interests offered for sale in South Africa by managers registered under CISCA.
• The solicitation of investments in the foreign CIS will not be contrary to the interests of investors, potential investors, the financial sector or the public interest. The FSCA will consider and apply this criterion based on the facts of each matter, its regulatory and supervisory insights and principles of fairness. The FSCA will, in due course, consider whether it is necessary to issue further guidance that informs the public interest criteria but it is not possible at this stage to confirm that such guidance will indeed be issued.
• The structure of the foreign CIS is one which is allowable in South Africa under CISCA.
• The liquidity of the securities of the foreign CIS will not compromise the liquidity terms of the foreign CIS. 

The draft Determination also proposes to impose the following conditions on foreign CISs:

• The manager of a foreign CIS may not, prior to approval in terms of section 65 of CISCA, include in or have part of the name of its business or in any description of its business any reference to a scheme approved under section 65 of CISCA without the approval of the FSCA.
• Prior to approval in terms of section 65 of CISCA, a foreign CIS or its manager may not perform any act to lead the public to believe that it has been approved to solicit investments in the foreign CIS from the members of the public in South Africa.
• A foreign CIS may not utilise any of the following investment strategies or approaches, or invest in the following assets or instruments in respect of and on behalf of its foreign scheme: (i) uncovered short selling; or (ii) a synthetic portfolio or synthetic exchange-traded fund that create synthetic exposure for an investor, excluding where such portfolio or fund is only promoted to any investor that is not a ’qualified investor’ as defined in Board Notice 52 of 2015 (Determination on the Requirements for Hedge Funds). 

In the FSCA’s view, the draft Determination is representative of a process of updating the existing BN 257 to better reflect international best practice and the supervisory experiences pertaining to applications by foreign CISs since its publication in December 2013. 

In terms of the draft Determination, an application for approval in terms of section 65 of CISCA submitted to the FSCA before the commencement of the draft Determination but which has not been finally determined will be considered by the FSCA based on BN 257. 

It is expected that the draft Determination, once implemented, will result in a stronger and more appropriate regulatory framework governing the advertisement and solicitation of foreign CISs in South Africa, thereby resulting in better protection for investors/ customers. 

The FSCA envisages that the cost implication, if any, of the draft Determination will not be significant as it is largely based on existing requirements contained in BN 257 and the associated guidance notices. The draft Determination is proposed to come into effect on the date of publication once it has been finalised. 

For ease of reference, a copy of draft Determination and the related supporting documents can be accessed here.