Unit Subscription Agreement Template for South Africa

The Unit Subscription Agreement is a fundamental document in South African investment management, used when investors wish to participate in a collective investment scheme (unit trust). It serves as the primary contractual framework governing the relationship between the management company and the investor, ensuring compliance with the Collective Investment Schemes Control Act and other relevant South African financial sector regulations. The agreement is essential for both retail and institutional investors, containing crucial information about the investment terms, unit pricing, redemption rights, fees, and regulatory requirements including FICA compliance. This document is particularly important in the South African context due to specific regulatory requirements and investor protection measures mandated by local legislation.

1. Parties: Identification of the parties to the agreement - typically the unit trust scheme/management company and the investor

2. Background: Context of the agreement, including brief description of the unit trust scheme and purpose of the subscription

3. Definitions and Interpretation: Definitions of key terms used in the agreement and rules of interpretation

4. Subscription and Payment: Details of the subscription amount, unit allocation, and payment terms

5. Issue of Units: Process and timing for issuing units, pricing mechanism, and confirmation of ownership

6. Representations and Warranties: Statements of fact and assurances from both parties, including investor eligibility and compliance with laws

7. Investor Obligations: Ongoing obligations of the investor, including providing information for FICA compliance

8. Management Company Obligations: Duties and responsibilities of the management company

9. Risk Acknowledgment: Investor's acknowledgment of investment risks and disclaimers

10. Fees and Charges: Details of all applicable fees, charges, and expenses

11. Redemption Rights: Terms and procedures for redeeming units

12. Notices: Communication procedures and contact details for notices between parties

13. Confidentiality: Obligations regarding confidential information

14. Termination: Circumstances and procedures for terminating the agreement

15. General Provisions: Standard legal provisions including governing law, jurisdiction, and entire agreement

16. Execution: Signature blocks and execution requirements