Page 103 - Profile's Unit Trusts and Collective Investments 2021 issue 2

Legislation and Guidelines

In terms of both the Constitution and PAIA, therefore, all people in South Africa, including
non-nationals, can request information from public and private bodies.
The ostensibly conflicting objectives of POPI and PAIA can be summarised as follows:
POPI requires organisations to safeguard information they collect and ensure data is not
misused
PAIA requires organisation to provide certain defined information both on request and in
published documents
The POPI and PAIA requirements are unrelated and have to be dealt with separately, although
POPI caused the requirement of Section 51 of PAIA, which defines the contents of every
organisation's PAIA manual, to be amended. PAIA manuals have to be posted on websites and
made available at each organisation's place of business (note that an earlier requirement that PAIA
manuals were to be lodged with the Human Rights Commission was removed). The PAIA manual
deadline is 31 December 2021.
CRISA and TCF
Code for Responsible Investing
The Code for Responsible Investing in South Africa (CRISA) was launched in July 2011.
The code, a product of the Committee on Responsible Investing convened by SA’s Institute of
Directors, aims to encourage sound governance by major investors in their business activities.
CRISA applies to institutional investors as asset owners. The definition of “institutional
investor” includes pension funds, insurance companies, collective investment schemes, and other
financial institutions as defined under Section 1 of the FSB Act of 1990. CRISA also applies to the
service providers of institutional investors, such as fund managers and consultants. CRISA is
endorsed by ASISA.
CRISA, which is designed to work hand in glove with the King code, gives direction as to how
asset owners should carry out their activities in order to act responsibly and achieve sound
governance. The code pays particular attention to the manner in which financial institutions
perform investment analysis and exercise their rights, as asset owners, in order to deliver value in
its broadest possible definition. In this sense, value is measured against the long-term
sustainability of activities, not just the financial benefits accruing to direct beneficiaries of the
investment business.
CRISA embraces five key principles, which should be encapsulated in formal policies adopted
by institutions:
1. The institutional investor should incorporate sustainability considerations, including
environmental, social and governance (ESG), into its investment analysis and investment
activities. CRISA acknowledges that sustainability must be applied within the context of
delivering the best possible
risk-adjusted returns to investors.
2. The institutional investor should
accept the responsibilities
associated with asset ownership. In
practice, this means that
institutions are encouraged to
engage with companies in which
they invest, to attend and vote at
shareholder meetings in
accordance with CRISA policies,
and to promote transparency in
communication. Under CRISA,
these responsibilities still attach to
the institution even if some
functions are outsourced to
third-party service providers.

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Profile’s Unit Trusts & Collective Investments — Understanding Unit Trusts