Absa | Wealth And Investment Management



Legal terms

1. Definitions

1. BAGL   means Barclays Africa Group Limited and all its subsidiaries including us;

2. Business Day means any day of the week other than a Saturday, Sunday or a public holiday;

3. Cap/Capping means the decision to suspend the acceptance of further investments into an Investment;

4. FAIS Act   means the Financial Advisory and Intermediary Services Act;

5. Feeder Fund means a portfolio that invests in a single Unit Trust, which levies its own charges and which could result   in a higher fee structure for the feeder fund;

6. FICA means the Financial Intelligence Centre Act;

7. Form means the application form together with these Legal Terms;

8. General Terms means these legal terms;

9. Investment(s)  means the underlying financial instruments of the Products, where applicable;

10. Manager     means the appointed entity(s) managing the Investments;

11. Non-Business/ means the days that will be communicated to us by the Product Supplier of a Feeder Fund and which Dealing Days we will communicate to you as and when communicated to us;

12. Product(s) means any of the products made available by us to which these Legal Terms apply;

13. Product means any third party supplying the Investments;

Supplier

14. Representative means the authorised financial services provider you have appointed as your representative and shall   include its representatives;

15. Shell Bank means a credit institution or financial institution, or an institution that carries out activities equivalent to   those carried out by credit institutions and financial institutions, incorporated in a jurisdiction in which it   has no physical presence, involving meaningful mind and management, and which is unaffiliated with a   regulated financial group;

16. Legal Terms means these Legal Terms;

17. Trigger Event means the return by a bank of any income or repurchase payments made by us into your bank account   or the return by the post office or any communication sent by us to you or any other event which we   may deem to necessitate undertaking a trace for you;

18. Unit(s) means any interest, undivided share, interest share or participatory interest, whether the value of which   remains constant or varies;

19. Unclaimed Assets means any assets or benefits due to you as a result of investments placed through us and which remain   under our administration after the occurrence of a Trigger Event;

20. Unit Trust(s) means a collective investment scheme;

21. us/we/our means Absa Investment Management Services Proprietary Limited;

22. US Person means:

1. any citizen of the United States of America (“US”) or natural person resident in the US;

2. any partnership or corporation organized or incorporated under the laws of the US;

3. any estate of which any executor or administrator is a US Person;

4. any agency or branch of a foreign entity located in the US;

5. any trust of which any trustee is a US Person;

6. any non-discretionary account or similar account (other than an estate or trust) held by a dealer or other fiduciary organised, incorporated or resident in the US;

7. any partnership or corporation if:

a) organised or incorporated under the laws of any foreign jurisdiction; and

b) formed by a US Person principally for the purpose of investing in securities not registered under the Securities Act of 1933 of the US.

23. Wealth Series means the special class of Investments listed das such in the Form;

24. you means you, the investor who has completed and signed the Form and is bound by these Terms.

1. One Agreement

1. The Form together with the required supporting documents will form the basis of the contract between you, the Product Suppliers and us. Any quotation supplied to you prior to undertaking any Investment shall only be for illustrative purposes save for when supplied for the Guaranteed Plan.

2. Words defined in these Terms have the same meaning when used in the Form and our other forms.

3. We reserve the right to change the Terms when required by legislation, our operational or business needs.

4. Where the changes are relevant, we will advise you of the changes and how they affect you. You agree to check our Terms, on the applicable channels, from time to time.

5. You agree to be bound by the latest version of our Terms as amended.

6. In the event of any changes to your personal details, you agree to inform us as is required by the FICA.

7. We will not process your application unless we have received all of the required supporting documents, as set out in the Form. We reserve the right to request further documentation as we may require.

8. The address you have provided on the Form shall be used for all notices and processes to be given to you.

9. We may, on notice to you and subject to the relevant Product regulations, cede, assign, transfer and delegate any of our rights and obligations under the Terms to another entity or person without requiring your consent.

10. The Legal Terms should be applied to the extent applicable to a Product, its terms and regulations.

11. You acknowledge that obtaining initial and ongoing advice is a pre-condition for investment into the Products and your Representative is responsible for making sure that you receive appropriate advice and understand product and fee information that your Representative is obliged to give to you, including changes in our practices and procedures.

12. You confirm that in respect of Long Term Insurance Products underwritten by Absa Life , you will not be responsible for the payment of the ongoing advice fee to your Representative, but we will on a monthly basis deduct the ongoing advice fee as a cost against the Long Term Insurance product.

13. You undertake to inform us should I terminate your Representative’s mandate to provide ongoing advice to you or change the level of advice required from your Representative or appoint another Representative, in which event we shall be entitled to reduce or cease to make further monthly payments to your Representative or, if relevant, continue to make payments to your new Representative.

2. Our Role

1. Our role is to offer the opportunity to invest in the Investments through the Products, to administer the Products and to carry out any valid instructions you may give to us in relation to the Products.

2. We are part of BAGL and thus also administer Investments supplied by other entities forming BAGL.

3. Your Instructions

1. We will only accept written instructions from you. Your written instructions may be sent to us by facsimile, e-mail or any other means we may agree to in the future.

2. We will only accept instructions from your Representative if they have been approved as a financial services provider in terms of the FAIS Act and an approved mandate signed by you has been submitted to us, setting out the terms of your Representative's discretion if any.

3. We will not process any unclear, incomplete or ambiguous instructions sent to us and we shall revert to you with our requirements. This may result in a delay in processing your instructions.

4. Any instructions or documents sent via facsimile or e-mail these are at your own risk, including the risk of delay, non-receipt or third party interception. You hereby indemnify and hold us harmless for any direct losses or damages you may suffer as a result of sending instructions or documents by facsimile or e-mail or us acting on any purported faxed or e-mailed instructions or documents sent from your facsimile number or e-mail address.

5. We will use our reasonable endeavours to ensure that we carry out your instructions within a period reasonable to the nature of the instruction, and in accordance with our own timing standards set out in the Form. However, there may be circumstances beyond our control which might lead to us not being able to adhere to our timing standards.

6. Funds received through a debit order will only be invested after 21 days from the date of the debit order and only once the funds have been cleared and appear on our bank account.

7. We will only pay interest to you in respect of any new Investment only after the first Business Day after receipt of the funds by us. After the said first Business Day, interest shall become payable.

8. No interest shall be payable to you in respect of funds held during a period when you have instructed us to switch your Investments from one Investment to another.

Add section re adviser needing to be licensed appropriately and if not we will not be able to process instruction for FAIS categories

4. Investment Selection and associated risks

1. The choice of investing in the Products is always yours or as advised to us by your Representative. In selecting the Products and Investments, you acknowledge you made your selection on your own accord or upon the advice of your Representative and that you are aware of the nature and risks associated with the Investments including but not limited to risk of capital loss.

2. We do not guarantee the performance of the Investments and should any guarantee be available, this will be derived from the Product Supplier. We will not in any way be liable for the performance or non-performance of the Investments.

3. You or your Representative may select exchange traded funds we make available from time to time. The maximum number of whole securities that can be purchased with the available investment amount will be rounded down and any excess cash will be held in the client cash movement account. No securities will be purchased until the cash balance in your account is greater than R150.00 and sufficient to purchase at least one whole security.

4. If you have selected an Investment consisting of more than one class, we will assume that the non-Wealth Series or non-Premium Range class has been so selected, unless the column indicating "Wealth Series" or “Premium Range” has been marked in respect of such Investment.

5. You understand that the legal and tax environment is continually changing, and that we cannot be held responsible for any changes to legislation which might have an effect on your Investments or tax implications which did not exist at the time your Investment was made.

6. The Investments you have selected will be administered by us on your behalf but always subject to any terms and conditions of the Manager and the Product Supplier. These terms and conditions may be contained in a Unit Trust deed, or any other documentation which might be applicable, copies of which may be obtained from the Manager or Product Supplier.

5. Custody of Investments

1. Any Investments you are invested in will be held on your behalf, in the name of AIMS Nominees (RF) Proprietary Limited.

2. Your funds and Investments shall at all times be kept and remain separate from our own funds.

6. Distributions

1. Distributions on Investments will either be reinvested in order to purchase additional Units or paid out into your chosen bank account.

2. Where the AIMS Distribution Fund has been selected for fee deduction purposes but does not form part of your Investments, then we have the right to deduct the fees pro-rata from the current funds in your Investments.

7. Fees, charges and investment management fees

You acknowledge that you are aware that certain fees apply to your Investments. These fees could either be initial and/or on-going fees as set out in this Form.

Representative Fees

1. You acknowledge that your Representative is entitled to the fees as set out in the Form for advice provided and services to you. You hereby authorize us to deduct any such fees from your Investments and to pay the fees to your Representative.

2. We will continue to deduct and pay this fee to your Representative unless you provide us with a written instruction to stop such payment.

3. Should you make a full redemption of your Investments in the course of a month but before we make payment of the fees to your Representative, your Representative will not receive payment for the month in question. You confirm that you have advised your Representative of this fact.

Our charges

4. We will charge you an annual administration as set out in the Form. This charge is calculated on the market value of your Investments.

5. Where a Wealth Series Fund has been selected, the price of the Investment includes a total annual fee as disclosed in the Wealth Series list of Investments. This fee accrues daily and is deducted from the particular Investment by the Manager.

6. We may increase our charges after three months prior written notice to you by us.

Investment management and Product Supplier fees

7. Investment management fees will also be levied and these will vary and depend on the Manager and the Product Supplier.

8. Certain fees may be levied by the Product Suppliers and these will depend on the Investments and the Product Supplier.

8. Capping and closure of Investments

Capping

1. Should we Cap any Investment, we will inform you of the Cap and also request your instructions regarding which Investment we should invest your further contributions.

2. If we do not receive instructions from you about where to invest your contributions, we will invest the contributions in an Investment selected by us until the Cap is lifted or we receive your instructions.

3. After lifting the Cap, we will reinvest your contributions into the relevant Investment.

Closing

4. Should we close any Investment or the Product, we will inform you of the closure and also request your instructions regarding which financial product we should invest your further contributions.

5. If we do not receive instructions from you about where to invest your contributions, we will invest the contributions in an Investment selected by us until we receive your instructions.

9. Unit Trust Disclosures

You acknowledge that you are aware of the following:

1. there are risks associated with investments in Unit Trusts;

2. investments in Unit Trusts are generally medium-to long-term investments;

3. the value of Units may go down as well as up. Past performance is not necessarily a guide to future performance;

4. fluctuations or movements in exchange rates may cause the value of underlying  international investments in Unit Trusts to move up or down;

5. Unit Trusts are traded at ruling prices;

6. a Manager may borrow up to ten percent of the market value of a Unit Trust to accommodate insufficient liquidity;

7. securities in a Unit Trust may be lent to borrowers subject to such conditions as are  imposed by the deed of a Unit Trust;

8. income from Unit Trusts is distributed monthly, quarterly and half-yearly and may only be paid out into an account as nominated by you;

9. Unit Trusts are financial products and not investments in insurance policies with an  insurer and therefore cooling-off periods do not apply;

10. Managers do not provide any guarantee either with respect to the capital or the return of a Unit Trust;

11. directors and personnel of a Manager may be invested in our Unit Trusts;

12. in respect of Unit Trusts that derive their income primarily from interest-bearing  instruments, the yield may be   historic or   current at a given date;

13. investments in Unit Trusts with foreign securities may involve various material risks which include, potential   constraints on liquidity and the repatriation of funds, macroeconomic, political, foreign exchange, tax and   settlement risks and potential limitation ns on the availability of market information;

In respect of money market Unit Trusts, you acknowledge that you are aware that:

14. the money market is not a bank deposit account;

15. a constant Unit Price of R1,00 (one Rand) will be maintained although, owing to  circumstances, it may be changed to a   lower amount;

16. your total return is made of interest received and any gain or loss made on any  particular instrument;

17. in most cases the return will merely have the effect of increasing or decreasing the  daily yield but in cases of abnormal   losses it can have the effect of reducing the capital value;

18. the yield is calculated using an annualised seven day rolling average; and

19. excessive withdrawals may place liquidity pressures and in such circumstances a process of ring-fencing of withdrawal   instructions and managed pay-outs over time may be followed.

If you are invested in the Feeder Fund, you acknowledge that you are aware that:

20. the Feeder Fund is a feeder fund;

21. a feeder fund is a Unit Trust that invests in a single Unit Trust of a collective investment scheme, which levies its own charges and which could result in a higher fee structure for the feeder fund;

22. there may be Non-Business and Non-Dealing days which may be applicable to the Feeder Fund;

23. income is declared annually in December and distributed in January of the following year;

24. the Feeder Fund does not invest in bearer shares unless such bearer shares are deposited with a regulated financial institution which is subject to anti-money laundering and counter-terrorist financing requirements equivalent to those of the Financial Action Task Force and whose compliance with such requirements is supervised by the relevant regulator; and

25. the Feeder Fund does not offer shares or accept orders to acquire shares, directly or indirectly, from Shell Banks.

10. Disclosures on Unclaimed Assets

You acknowledge that you are aware of the following:

1. your right to your Unclaimed Assets will remain intact until they have been paid to you, regardless of the timeframe.

2. upon the happening of a Trigger Event, we will take the following steps in an attempt to contact or trace you:

1. within 6 months of the happening of a Trigger Event, we will contact you in order to advise you of your Unclaimed Assets, using both internal and external information available to us;

2. within 3 years after the happening of a Trigger Event, we will contact you in order to advise you of your Unclaimed Assets, using both internal and external information available to us. Should we reach you and inform you of your Unclaimed Assets and you do not act on our information, we will not take any further steps; and

3. within 10 years after the happening of a Trigger Event, we will contact you in order to advise you of your Unclaimed Assets, using both internal and external information available to us. Should we not be able to reach you, we will request an external tracing company to trace you.

3. You are and will remain responsible for ensuring that your contact information with us is at all times kept up to date.

4. There will be direct administrative, tracing and management costs associated with Unclaimed Assets and which may   change from time to time and such changes will be communicated to you in writing during the existence of your   relationship with us.

5. As a condition of your investment, we are entitled to recover any reasonable direct administrative, tracing and   management costs from you by deducting these costs from the value of your Unclaimed Assets once we have located you.

6. Where applicable, your Unclaimed Assets will be invested in a money market fund selected by us until such time as we   have been able to trace you and you give us different instructions.

7. For the purpose of facilitating your tracing in the future, you hereby consent to us sharing your personal information with   our appointed external tracing company, in compliance with legislation relating to the sharing of personal information.

11. Taxes and Payment

1. You acknowledge that income tax and/or capital gains tax or other withholding taxes may be levied on certain of the benefits accruing to you from certain of the Investments in the Products. We may be required to deduct or withhold and pay over to the authorities any such tax before paying any balance to you.

2. You acknowledge that you are aware that you are liable for all taxes payable by you to the relevant authorities.

12. Compliance with Applicable Law

1. As part of BAGL, we are committed to complying with national and international law, rules and regulations and policies regarding the combating of criminal activities, money laundering and terrorist financing.

2. Your application and all information concerning you are subject to verification, processing, screening and profiling against internal and external data sources. We may be obliged to decline your applications or may request additional documents such as financial statements and asset and liability statements if you fall in a certain risk category.

3. After acceptance of your application, all information, instructions and transactions on your behalf will be subject to continuous screening and profiling which may prohibit, limit or delay the execution thereof and which may oblige us to terminate our relationship with you.

4. To the extent allowed by law, we will inform you of any prohibitions or limitations on your application, instructions or transactions.

5. We, our respective affiliates, employees, officers and directors will not be liable for any special, punitive, indirect or consequential losses or damages, including, without limitation, loss of profits or any anticipated savings.

13. Quarterly Statements

1. As is required by legislation, we will send you your monthly via electronic means unless you have advised us otherwise.

2. You may request a statement from us at any time, detailing the composition of your Investments, any changes, the market values and any changes.

3. You hereby authorise us to make any such report available to your Representative.

4. You may also access such information as contained in the report on a continuous basis via our contact centre on 0860 000 005 or from our internet site, at absainvestments.co.za.

5. Should we not receive any notification within 30 (thirty) days of the statement having been sent out to you, that the statement contains errors, or is not a true reflection of your Investment, then we shall be entitled to regard the statement as being correct in every way.

6. The values shown on statements reflect the latest information available as at the statement date.

14. US Person

1. You confirm that you are not a US Person and agree and promise to inform us as soon as you become a US Person during your relationship with us.

2. If you become a US Person during your relationship with us, we have the right to end the relationship with immediate effect.

3. If you are a US Person, we have the right to decline your application.

GUARANTEED SERIES

1. Definitions

1. Absa Life means Absa Life Limited, the long-term insurer underwriting the Policy;

2. Act means the Long-term Insurance Act;

3. Growth Plan means the Absa Guaranteed Growth Plan made of a five-year linked endowment policy together with a     death benefit policy;

4. Guaranteed Plan means the Absa Guaranteed Investment Plan made up of either the Guaranteed Income Plan and the   Guaranteed Growth Plan or a combination of both;

5. Guarantor means Absa Bank Limited;

6. Income Plan means the Absa Guaranteed Income Plan made up of a five-year linked annuity policy;

7. Policy means the policy issued by us and to you and underwritten by Absa Life; and

8. Policyholder means you, the person who has completed and signed the Form and is bound by the Terms.

2. Guaranteed Plan Requirements

1. You have applied to invest in the Guaranteed Plan subject to the Terms.

2. The Policy is issued by and underwritten by Absa Life. The Policy will only come into force when the fully completed Form all documentation and the investment amount have been received by us and Absa Life has accepted the Form.

3. We reserve the right to cap further investments into the Guaranteed Plan should the investment limit threshold set by the Guarantor be reached and in such instances, we will not accept further applications.

4. The investment performance of the Policy is directly linked to the future market performance of the Growth Plan and the Income Plan.

5. Tax on the Growth Plan shall be payable in terms of your relevant Pay As You Earn scale unless legislation provides otherwise.

6. We do not guarantee the performance of your choice of investments and should any guarantee be available, this will be provided from the Guarantor. Together with Absa Life, we shall not in any way be liable for the performance or non-performance of the investment.

7. You have the right to cancel this Policy by written notice to us within a period of 30 (thirty) days from the date of receipt of the Policy summary. You may cancel the Policy provided you have not lodged a claim or have had a benefit paid under the Policy. On cancellation of the Policy, you will be refunded all amounts paid to Absa Life in respect of the Policy, less the cost of any risk benefits actually enjoyed, and less any market loss where the market value of the investments has declined due to market conditions.

8. Upon maturity of the Policy, we will send you a communication requesting details of the bank account into which we should pay the proceeds of the Policy or such other instructions you may wish to give us. Should we not receive the requested bank details or any instructions from you before the date of maturity of the Policy, on the date of maturity of the Policy, we will transfer the proceeds of the Policy into a money market portfolio authorised by us until such time as you furnish us with instructions.

2. Fees and Charges

You acknowledge that you are aware that certain fees apply to your investments as set out in the Form.

Representative Fees

On-going fees shall only be payable on the Income Plan and not on the Growth Plan

3. No loans against the Policy

1. No loans will be granted by Absa Life against the value of the Policy.

2. The Growth Plan may be used as security.

4. Appointment of Beneficiaries

In terms of appointment of beneficiaries and lives assured under the Policy, the following will apply:

1. you may appoint one beneficiary for ownership to become the owner of the Growth Plan and/or the Income Plan;

2. one or more beneficiary for proceeds may be appointed to receive any death benefits under  the Growth Plan upon your death where the beneficiary is also the last dying life assured;

3. you may appoint your spouse or your deceased estate to receive the proceeds (commuted value) of the Income Plan upon your death, prior to the termination date of the Policy;

4. you may revoke a beneficiary’s appointment or appoint another beneficiary, but such  revocation or nomination shall only be valid if it is in writing, and is received and acknowledged by us;

5. in respect of the Growth Plan, no beneficiaries for proceeds may be appointed if  a life assured other than you is selected;

6. if no beneficiary has been validly appointed at time of your death, any death benefit due under the Policy will become payable into your deceased estate; and

7. where more than one life assured is appointed under this Policy, no death benefits shall become payable until the death of the last dying of such lives assured.

5. Death Benefit

The death benefit as provided for in the death benefit policy applies as follows:

1. where you are the only life assured, on your death, the Growth Plan shall terminate. The death benefit, where applicable, shall be paid to the nominated beneficiary for proceeds or where no beneficiary for proceeds has been nominated, to your deceased estate.

2. where there is a single life assured who is not the Policyholder:

1. upon the death of the life assured, the Growth Plan shall terminate and the death benefit, where applicable, shall be paid to the Policyholder;

2. upon the death of the policyholder, ownership of the Growth Plan shall change to the beneficiary for ownership, should one have been appointed, or the deceased estate of the policyholder should no beneficiary for ownership have been appointed and the death benefit policy shall continue until the earlier of the death of the life assured or until maturity.

3. where there is more than one life assured;

1. upon the death of any life assured other than the policyholder, the policy shall continue;

2. upon the death of the policyholder, ownership of the Growth Plan shall change to the beneficiary for ownership, should have one been appointed, or the deceased estate of the Policyholder should no beneficiary for ownership have been appointed, and the death benefit policy shall continue until the earlier of the death of the last surviving life assured or until maturity.

6. Surrender of the Policy

In respect of surrenders of the Policy the following will apply:

1. in respect of the Growth Plan, in terms of the Act, only one surrender is permitted during the five year term. The amount that may be paid out in terms of such surrender is limited to a return of all amounts paid into the Policy, together with five  percent interest thereon compounded annually. Any excess will be paid out to you on the maturity of the Policy. Upon surrender of the Growth Plan, Absa Life reserves the right to levy a penalty of up to five percent of the surrender value of the Policy. You may not apply to surrender an amount less than R25 000; and

2. the Income Plan may be commuted in full prior to the termination date of the Policy. The amount that may be paid in terms of a full commutation is limited to a return of the premium paid into the Policy plus 5% p.a. interest compounded annually, less the aggregate of all annuity payments made in respect of the Policy. Any excess will be paid out to you as an annuity until the termination date. Absa Life reserves the right to levy a penalty of up to five percent of the commutation value of the Policy. You may not apply to commute an amount less than R25 000.

LIFE SERIES

1. Definitions

4. Absa Life means Absa Life Limited, the long-term insurer underwriting the Policy;

5. Act means the Long-term Insurance Act;

6. Policy means the issued to you by us and underwritten by Absa Life;

15. Policy Requirements

1. You have applied to invest in the Policy subject to these Terms. The Policy will not come into force until the fully completed Form, all documentation and the investment amount is received by us and Absa Life has accepted the application.

2. The Policy is a linked endowment policy underwritten by Absa Life and administered by us.

3. The Policy has a restriction period of 5 (five) years. This is a period imposed by the Act in terms of which, there are restrictions on the withdrawals you may make from the Policy. The restriction period applies to the first five years of your Policy or five years from the first day of any month during which the 120% rule takes effect.

4. The 120% rule takes effect when your contributions in any policy year are greater than 120% of the higher of any of the previous two policy year’s total contributions. In the second policy year when your contributions are greater than 120% of the first policy year’s total contributions, we will accept these contributions into the same policy and extend the restriction period or start a new five year restriction period on the Policy.

5. In terms of the Act, only one full or partial surrender is permitted during the restriction period, or any subsequent term that is by law regarded as being a restriction period. If you elect a full surrender, the amount that may be paid out in terms of such surrender is limited to a return of all amounts paid into the Policy, together with five percent interest thereon compounded annually. Any excess will be paid out to you at the end of the restricted period of the Policy.

6. You have the right to cancel this Policy by written notice to us within a period of 30 (thirty) days from the date of receipt of the Policy summary. You may cancel the Policy provided you have not lodged a claim or have had a benefit paid under the Policy.

7. On cancellation of the Policy, you will be refunded all amounts paid to Absa Life in respect of the Policy, less the cost of any risk benefits actually enjoyed, and less any market loss where the market value of the Investments has declined due to market conditions.

8. Should you cede the Policy to another person, that person may become liable for capital gains tax.

9. In respect of commission payable to your Representative under the Policy, same shall not exceed 1% (one percent) in relation to investments into the Wealth Series. There shall be no recurring commission on lump sum investments.

10. Tax under the Policy shall be payable in terms of the four funds form of taxation and you will thus receive your benefits under the Policy after the tax has already been deducted.

3 Liquidity

No loans will be granted by Absa Life against the value of the Policy, however the Policy may be used as collateral security for loans from other parties, in accordance with their own credit policies.

4 Beneficiaries

You may appoint one or more beneficiaries to receive any benefits under the Policy upon your death. No beneficiaries may be appointed if a life assured other than you is selected. You may revoke a beneficiary's appointment or appoint another beneficiary, but such revocation or nomination will only be valid if it is in writing, and is received by us or Absa Life.

5 Death Benefit

If you have selected a death benefit option under the Policy, the following shall apply:

5.1 only one of the death benefit options set out in the Form may be selected;

5.2 the death benefit option may only be selected if the life assured under the Policy is not older than 70 (seventy) years of age at the commencement date of the Policy. The death benefit option will in all cases lapse after the life assured has turned 76 years of age, and upon the death of the life assured thereafter, only the market value of the Investments at time of death will be payable;

5.3 if the Initial Capital Guarantee Option has been selected, upon the death of the life assured under the Policy, the benefit that will become payable will be the greater of the gross amounts invested in the Policy up to date of death, and the market value of the selected Investments under the Policy as at the date of death; and

5.4 if the High Watermark Option has been selected, upon the death of the life assured under the Policy, the benefit that will become payable in terms of the Policy will be the greater of the highest market value attained by the selected Investments under the Policy as at the last day of the month preceding the death of the life assured, or any of the month ends preceding that, and the market value of the selected Investments under the Policy as at the date of death of the life assured. For the period from the commencement date of the Policy to the end of the first month thereafter, the death benefit payable will be the gross amount invested, less any fees and commissions.

LIVING ANNUITY

1. Definitions

1. Absa Life means Absa Life Limited, the long-term insurer underwriting the Policy;

2. Annuity means the Absa Living annuity;

3. Applicable Legislation means the Long-Terms Insurance Act, the Income Tax Act and practice notes issued by   South African Revenue Services and all other legislation;

2. Annuity Requirements

1. The annual payments may decrease from the level chosen by you and therefore you are aware that the Annuity might not be suitable for you if you have to rely on the annual payments to provide you with a substantial part of your planned retirement income.

2. Due to the nature and structure of the Annuity, your capital may be eroded under certain circumstances.

3. You must select a level of income annually, ranging between any minimum and maximum level set out by the South African Revenue Services. Where the Absa Protected Accumulator Portfolio has been selected, then such annual level of income payable from it may not be more than 9%.

4. You may only change the level of income on the anniversary dates of the Annuity. We will send you a revision letter 3 (three) months prior to the anniversary date of your Annuity. You will have until the 15th of the anniversary month to indicate a change of income. If we do not receive a fully completed and signed revision instruction from you, we will retain existing percentages and these will be based on the asset value as at anniversary date.

5. Where you select a monthly income frequency, your income shall be paid in arrear at the end of each month. Where a quarterly, half-yearly or annual income frequency is chosen, income shall only be paid in advance at the beginning of each such period, and may not be paid in arrear at the end of each such period. Where the Absa Protected Accumulator Portfolio has been selected then such income frequency may only be payable monthly in arrears.

6. The full value of the Annuity may be paid as a lump sum when the value of Investments at any time is less than:

1. R 50 000, if any of the value of the Annuity or any part of the retirement interest was previously commuted for a single payment; or

2. R 75 000 in any other case.

3. Taxes and Payment

1. You acknowledge that income tax at the applicable Pay As You Earn rate may be levied on payments to made to you.

2. If you hold more one living annuity with us, we will aggregate your liability for tax purpose although you will remain responsible for ensuring that all your tax liabilities are fully paid up.

4. Beneficiaries

You may appoint one or more beneficiaries to receive any benefits under the Annuity upon your death. You may at any time revoke a beneficiary's appointment or appoint another beneficiary, but such revocation or nomination will only be valid if it is in writing, and is received and confirmed by us. No divorce orders are allowed or will be implemented against your Annuity.

RA AND PRESERVATION FUND

1. Definitions

1. Applicable means the Income Tax Act and practice notes issued by SARS and all other legislation;

Legislation

2. Fund(s) means the Absa Pension Preservation Fund or the Absa Provident Preservation Fund or the   Absa Retirement Annuity Fund, as applicable;

3. Fund Rules means rules of the respective Funds;

2. Product Requirements

1. You apply to become a member of the Fund and upon acceptance of your application, you acknowledge to be bound by the

Applicable Legislation, the Terms and the Fund Rules. You are bound by the Fund Rules which are available to you upon request from us.

2. Where the selected Investment is the Absa Protected Accumulator Fund, investment into it will be as part of a wrap fund with up to 1.5% being invested into the Absa Money Market Fund and 98.5% into the Absa Protected Accumulator. Absa Life shall provide a guarantee on the Unit price of the Absa Protected Accumulator Fund as calculated and set on a monthly basis.

3. Where you have selected the RA Core Portfolio as the underlying Investment, the following shall apply:

1.   you will be invested through the life-stage model in terms whereof there is a passive investment strategy whose aim will be to meet your saving requirements working towards either your normal retirement age or your planned retirement age; and

2.   in light of the nature of the life-stage model, you specifically agree that you will not have the choice to make a selection in respect of the Investments contained in the ETF and furthermore, you will not have a discretion to exercise nor have a choice with regards to the investments being switched from one ETF to another in accordance with the life-stage except where you have changed your planned retirement age.

4. In terms of Applicable Legislation, only one full or partial withdrawal is permitted prior to retirement under a preservation fund.

5. In respect of a retirement annuity, Applicable Legislation does not permit any withdrawal prior to retirement unless the Fund value is equal to or less than R 7 000.00 or in the event that the member is emigrating from the Republic of South Africa, in which case a 100% withdrawal is permitted.

6. Your chosen Investments shall be subject to Regulation 28 of the Pension Funds Act (Regulation 28), the details of which are available upon request from us. In respect of compliance of your Investments with Regulation 28, the following shall apply:

1.   we will not process any instructions which are not compliant with Regulation 28. We will inform you of the non-compliance and require that you immediately make the necessary adjustments in order to be compliant with Regulation 28. We will not be responsible for any losses suffered as a result of the delays in effecting the said adjustment; and

2.   should your chosen Investments, at any time, become non-compliant with Regulation 28 due to market movements, we will advise you of such non-compliance on a quarterly basis. Should you not correct the position before or by the end of the third quarter we will switch the non-compliant portion into a Money Market Unit Trust before the end of the fourth. You can furnish us with instructions on how the switched portion must be dealt with in compliance with Regulation 28.

3. Taxes and Payment

1. On withdrawal from a preservation fund prior to retirement, we will apply for a tax directive. Once the tax directive is received from SARS, only then can payment be made to you. A tax directive usually takes 2 (two) days to be received from SARS. In total, withdrawals from preservation funds can take up to 10 (ten) Business Days to be paid out, provided that the tax directive received from SARS has not been declined.

2. On withdrawal from a retirement annuity by reason of migration or any other reason allowed under Applicable Legislation, we will apply for a tax directive. Once the tax directive is received from SARS, only then can payment be made to you. A tax directive usually takes 2 (two) Business Days to be received from SARS. In total, retirement annuities can take up to 10 (ten) business days to be paid out, provided that the tax directive received from SARS has not been declined.

4. Death and Beneficiaries

1. On your death, your Investments shall be switched into the Money Market Unit Trust where it shall remain until it is paid in accordance with the provisions of section 37C of the Pension Funds Act or the trustees may direct to where such investments should be moved. Should you die before your withdrawal or retirement from the Fund, the benefits that accrue in terms of the rules of the Fund shall be dealt with in terms of the provisions of the Pension Funds Act, specifically section 37C thereof.

2. You may appoint in writing one or more nominees to receive any benefits referred to above, or may also change any such appointment from time to time in writing, provided that any such appointment shall be of no force or effect until it has been delivered to us.

3. You acknowledge that section 37C referred to above requires the trustees of the Fund to apply their own discretion when making a distribution of the death benefits of the Fund between any nominees and your dependents, as defined in the Pension Funds Act. Any nomination of beneficiaries will therefore not necessarily mean that such beneficiaries will receive the benefits in the proportion stated by you but such proportion will assist the board in making their decision.

INVESTMENT ACCOUNT

1. Definitions

Investment Account means the AIMS Investment Account;

2. Death

Upon your death, the funds held in your Investments shall be dealt with in accordance with your instructions as furnished and acknowledged by us prior to your death until they are paid in accordance with the laws relating to the administration of deceased estates.

3. Tax

1. You acknowledge that income tax and/or capital gains tax or other withholding taxes may be levied on certain of the benefits accruing to you from certain of the Investments in the Investment Account. We may be required to deduct or withhold and pay over to the authorities any such tax before paying any balance to you.

2. You acknowledge that you are aware that you are liable for all taxes payable by you to the relevant authorities.

OFF-SHORE INVESTMENT ACCOUNT

1. Definitions

Off-Shore Account means the AIMS Off-Shore Investment Account;

2. Account Requirements

You can only invest in the Off-Shore Account if you meet the following requirements:

1. you must be a natural person older than 18 (eighteen) years;

2. with respect to investment amounts, the following shall apply:

1.   A minimum lump sum of R100 000 is required;

2.   If you already have at least R50 000 invested in any of our other investments, the minimum investment shall be R50 000;

3.   a minimum of R25 000 shall be invested in respect of each Investment selected.

3. Before being allowed to invest offshore and in order to comply with the requirements of the South African Reserve Bank (SARB) and the South African Revenue Services (SARS), you are required to complete the SARB Exchange Control MP 1423 and the SARS Application for Tax Clearance Certificate-FIA001.

4. We undertake to convert the rand amount invested into the appropriate foreign currency through the International division of BAGL and to transfer the converted amount to the offshore funds and/or companies selected by you. The rand amount will be converted to the appropriate foreign currency at the exchange rate ruling on the date of conversion, which date shall be determined by us.

3. Death

Upon your death, the funds held in your Investments shall be dealt with in accordance with your instructions as furnished and acknowledged by us prior to your death until they are paid in accordance with the laws relating to the administration of deceased estates.

TAX FREE SAVINGS ACCOUNT

1. Definitions

1. Account means the Absa Tax-Free Savings account;

2. Annual Limit means the annual contribution of R30 000 as calculated during any year of assessment;

3. Contribution means the Annual Limit and the lifetime Contribution collectively;

Limit(s)

4. Lifetime Limit means the lifetime contribution limit of R500 000 as calculated over your lifetime;

2. Limitations on contributions and withdrawals

1. You may withdraw, in whole or part, at any time from your Investments. However, amounts which have been previously withdrawn shall form part of the Contribution Limits.

2. You may not roll over any unused annual tax deductible contribution allowances. The Annual Contribution Limit remains as is regardless of the amount invested in the particular year.

3. You will be responsible for managing your overall annual tax deductible contributions and ensuring you remain within the prevailing Contribution Limits.

4. You accept that the Contribution Limits are gross amounts before any applicable fees and may not necessarily match the full stated amounts of the Contribution Limits. It is therefore your responsibility to ensure that you receive the full benefit of the Account by making further contributions into the Account in order to match the Contribution Limits.

5. Transfers of tax free investments between different service providers will not count towards the Contribution Limits although such transfers are not permitted until such time as the law provides otherwise.

3. Taxation of the Account

1. In accordance with the Account, you will not pay tax on income earned from the proceeds of the Account including all dividends, interest or realised capital gains.

2. If you exceed the applicable Contribution Limit, a penalty shall become payable by you. The penalty payable will be an amount equal to 40% of the amount by which the applicable   Contribution Limit has been exceeded.

3. Despite the above, it is your responsibility to ensure that you are compliant with the Contribution Limits and any other rules applicable to the Account.

4. Death

Upon your death, the funds held in your Investments shall be dealt with in accordance with your instructions as furnished and acknowledged by us prior to your death until they are paid in accordance with the laws relating to the administration of deceased estates.

PERSONAL SHARE PORTFOLIOS

1. Definitions

1. PSP Manager means the investment manager appointed to manage your PSP; and

2. PSP means your Personal Share Portfolio.

2. Once we have accepted your application and have created a PSP investment for you, we will pay the PSP investment amount to the PSP Manager.

3. The PSP Manager will contact you once the cash has been paid. If the investment is a share transfer, kindly request the PSP Manager’s process.

4. A minimum of 5% of the total investment value must at all times be invested in a Unit Trust under our administration to provide for fees. We will deduct such fees as are indicated in clause 8 of the Legal Terms.

5. If there is not enough money in the abovementioned Unit Trust, we will give the PSP Manager an instruction to pay the fees from the PSP. This may result in shares being sold to fund the fee payments.

6. If there is any tax to be paid for transactions in the PSP, we will request the PSP Manager to pay it from the PSP.

7. For a Living Annuity you must have an income drawdown account (from where it can be paid) to the value of at least one year’s expected drawdown.

8. If there is not enough money in the income drawdown account we will first sell from your Investments other assets before we give the PSP Manager instruction to pay you from the PSP, for as long as the income drawdown account does not have enough funds to pay your income. This may result in shares being sold to fund the drawdown.

9. The PSP Manager must always process instructions we have submitted. At no time may you cancel or change such instruction with the PSP Manager.

10. The PSP Manager is responsible for the portfolio management of all Investments in the PSP.

11. We have given the PSP Manager an investment mandate in terms of which the PSP Manager may include listed shares, listed debt instruments like bonds, listed property, cash and other specifically agreed securities. These terms will be in your agreement with the PSP Manager.

12. We allow you to provide input to the PSP Manager on the management of your PSP. Your input is limited to the investment mandate you have agreed to with the PSP Manager and the mandate we have with the PSP Manager.

13. The PSP Manager may not process any request that falls outside our investment mandate with them.

14. We may withdraw your ability to provide input to the PSP Manager.

15. The PSP is subject to the PSP Manager’s standard business rules, procedures and timing standards, which will be provided to you by the PSP Manager when you sign their mandate. The PSP Manager will give you share portfolio statements, it may exclude the administration fee, adviser fee and tax that has not yet been processed on their trading platform.

16. We will use the information PSP Manager sends us for your PSP holdings to calculate a unit price for reporting on our statements.

17. If we cannot price a PSP for any reason beyond our control, a transaction in progress will only be confirmed once the pricing has resumed. This may delay us in completing your instruction.

18. If your investment in the PSP is less than the PSP Manager’s minimum at any time during the duration of the agreement, the PSP Manager may switch the current PSP investment to another investment component like a Unit Trust. The PSP Manager will continue to manage your Investment in that chosen investment component.

................
................

In order to avoid copyright disputes, this page is only a partial summary.

Google Online Preview   Download