The business of a hedge fund has been declared to be a collective investment scheme ‘CIS’ in terms of the Collective Investment Schemes Control Act ‘CISCA’. Taxand South Africa discusses further.
A person that conducts the business of a hedge fund must, within 6 months from 1 April 2015, lodge with the registrar of the Financial Services Board an application for registration as a manager to operate a hedge fund in accordance with section 42 of CISCA.
Hedge funds may comply with the CISCA provisions in one of the following ways:
It seems that in practice most hedge funds that are currently constituted as partnerships will opt for a transfer of the assets to a Hedge Fund CIS. This makes it even more important that real tax relief is provided.