Secondary

Another Investment Scheme under Provisional Curatorship

The total assets under management of the Rockland Targeted Development Investment Fund was placed under provisional curatorship on Tuesday after an ex parte application by the FSB. Bert Chanetsa of the FSB said that such an application is brought if there is a strong suspicion that the assets of a business requires urgent protection, according to an article in Sake24.

Following complaints from one of the pension funds (who allegedly battled for 20 months to get their funds back), the FSB launched an investigation in May which led to the application for curatorship this week, says the article.

It is alleged that Rocklands managed an unregistered collective investment scheme called Rockland Targeted Development Investment Fund. It appears that six pension funds were the main investors in the scheme.

The curatorship covers the collective investment and financial services of two private companies – Rockland Asset Management and Consulting, and Rockland Group holdings – and also extends to the Rockland Targeted Development Investment Fund, according to Moneyweb. Total funds, according to this report, amounts to R848 000 million.

A search on the FSB website shows that Rockland Investment Management, the trading name of FSP number 834, is a private company, operating as a one person business. Advocate Wentzel Oaker is listed as key individual, representative and compliance officer.

The Sake24 report says that the regulator was concerned about the fact that everything in the business centred around Oaker, as the Collective Investment Schemes Act requires a clear distinction between assets held and managed on behalf of different funds.

The FSB indicated that progress with the curatorship will be made known through the media from time to time. Whilst more information will, in time, provide greater clarity on the matter, one question that arises concerns the issue of compliance monitoring.

Under current legislation, acting as one’s own compliance officer is no problem, provided you comply with the requirements, and your application is approved by the FSB. We have, for a long time, questioned the ability of an internal compliance officer to act truly objectively.

In a sense, the compliance officer is the eyes and ears of the FSB, with an obligation to report untoward behaviour to the regulator for investigation.

Whilst no fingers can be pointed at anybody in the case referred to above until the legal process has been concluded, we have to ask if the current arrangement regarding an internal compliance officer is not due for serious re-consideration.

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