Asset Management Agreement Template for South Africa

An Asset Management Agreement is essential when establishing a professional investment management relationship in South Africa. This document is used when a client delegates investment authority to a licensed asset manager to manage a portfolio of assets on their behalf. The agreement must comply with South African financial sector regulations, particularly the FAIS Act, FICA, and Financial Sector Regulation Act. It details the investment mandate, risk parameters, fees, reporting requirements, and operational procedures. The document is crucial for both institutional and high-net-worth individual clients seeking professional portfolio management services, and it provides legal protection for both the asset manager and the client while ensuring regulatory compliance. The agreement typically includes specific investment guidelines, performance measurement criteria, and risk management protocols tailored to the client's investment objectives.

1. Parties: Identification of the Asset Manager and the Client, including registration details and addresses

2. Background: Context of the agreement and brief description of the parties' intentions

3. Definitions and Interpretation: Detailed definitions of terms used throughout the agreement and interpretation rules

4. Appointment and Authority: Formal appointment of the asset manager and scope of discretionary authority

5. Services and Obligations: Detailed description of asset management services and obligations of the asset manager

6. Investment Guidelines and Restrictions: Specific investment parameters, restrictions, and risk management guidelines

7. Fees and Expenses: Management fees, performance fees, expense allocation, and payment terms

8. Representations and Warranties: Standard and specific representations and warranties from both parties

9. Risk Disclosures: Mandatory risk warnings and acknowledgments as required by FAIS Act

10. Reporting and Valuations: Reporting obligations, frequency, content, and valuation methodologies

11. Compliance and FICA Requirements: Compliance obligations including FICA requirements and ongoing monitoring

12. Confidentiality: Confidentiality obligations and permitted disclosures

13. Duration and Termination: Term of agreement, termination rights and procedures

14. Liability and Indemnification: Limitations of liability and mutual indemnifications

15. General Provisions: Standard boilerplate clauses including notices, amendments, governing law