These accounts, according to the circular, are predominantly provided by Investec and Nedbank.
The CMS Account is similar to a trust account maintained by professionals for the purpose of holding money on behalf of third parties “on account” for a specified purpose. The account is used by corporate entities and persons to accelerate the collection of deposits, facilitate investments, manage cash efficiently and control payments to trade creditors. The account usually combines a money market fund from which interest is paid and a brokerage or investment account.
There is some confusion in the industry as to whether a section 19(3) audit report is required from FSPs who operate a CMS account or not. To clarify this issue and state the Registrar’s position, it was deemed necessary to clarify the matter in the circular.
In my view, this is an excellent explanation from the regulator, not only for those who currently use these accounts, but also for others who may benefit from it.
Please click here to access the four-page document.
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