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Companies Act, 2008 (Act No. 71 of 2008)

Chapter 2 : Formation, Administration and Dissolution of Companies

Part E : Securities registration and transfer

56. Beneficial interest in securities

 

 

1) Except to the extent that a company’s Memorandum of Incorporation provides otherwise, the company’s issued securities may be held by, and registered in the name of, one person for the beneficial interest of another person.

 

2) A person is regarded to have a beneficial interest in a security of a public company if the security is held nomine offıcii by another person on that first person’s behalf, or if that first person—
a) is married in community of property to a person who has a beneficial interest in that security;
b) is the parent of a minor child who has a beneficial interest in that security;
c) acts in terms of an agreement with another person who has a beneficial interest in that security, and the agreement is in respect of the co-operation between them for the acquisition, disposal or any other matter relating to a beneficial interest in that security;
d) is the holding company of a company that has a beneficial interest in that security;
e) is entitled to exercise or control the exercise of the majority of the voting rights at general meetings of a juristic person that has a beneficial interest in that security; or
f) gives directions or instructions to a juristic person that has a beneficial interest in that security, and its directors or the trustees are accustomed to act in accordance with that person’s directions or instructions.

 

3) If a security of a public company is registered in the name of a person who is not the holder of the beneficial interest in all of the securities in the same company held by that person, that registered holder of security must disclose—
a) the identity of the person on whose behalf that security is held; and
b) the identity of each person with a beneficial interest in the securities so held, the number and class of securities held for each such person with a beneficial interest, and the extent of each such beneficial interest.

 

4) The information required in terms of subsection (3) must—
a) be disclosed in writing to the company within five business days after the end of every month during which a change has occurred in the information contemplated in subsection (3), or more promptly or frequently to the extent so provided by the requirements of a central securities depository; and
b) otherwise be provided on payment of a prescribed fee charged by the registered holder of securities.

 

5) A company that knows or has reasonable cause to believe that any of its securities are held by one person for the beneficial interest of another, by notice in writing, may require either of those persons to —
a) confirm or deny that fact;
b) provide particulars of the extent of the beneficial interest held during the three years preceding the date of the notice; and
c) disclose the identity of each person with a beneficial interest in the securities held by that person.

 

6) The information required in terms of subsection (5) must be provided not later than 10 business days after receipt of the notice.

 

7) A company that falls within the meaning of ‘‘regulated company’’ as set out in section 117(1)(i) must—
a) establish and maintain a register of the disclosures made in terms of this section; and
b) publish in its annual financial statements, if it is required to have such statements audited in terms of section 30(2), a list of the persons who hold beneficial interests equal to or in excess of 5% of the total number of securities of that class issued by the company, together with the extent of those beneficial interests.

 

8) Subsections (9) to (11) do not apply in respect of securities that are subject to the rules of a central securities depository.

 

9) A person who holds a beneficial interest in any securities may vote in a matter at a meeting of shareholders, only to the extent that-
a) the beneficial interest includes the right to vote on the matter; and
b) the person's name is on the company's register of disclosures as the holder of a beneficial interest, or the person holds a proxy appointment in respect of that matter from the registered holder of those securities.

 

10) The registered holder of any securities in which any person has a beneficial interest must deliver to each such person-
a) a notice of any meeting of a company at which those securities may be voted on within two business days after receiving such a notice from the company; and
b) a proxy appointment to the extent of that person's beneficial interest, if the person so demands in terms of subsection (11).

 

11) A person who has a beneficial interest in any securities that are entitled to be voted on at a meeting of a company's shareholders, may demand a proxy appointment from the registered holder of those securities, to the extent of that person's beneficial interest, by delivering such a demand to the registered holder, in writing, or as required by the applicable requirements of a central securities depository.