Page 100 - Profiles's Unit Trusts & Collective Investments - September 2024

CHAPTER 5

CRISA applies to asset owners, asset
managers and service providers. In other
words, institutional investors such as
pension funds, insurance companies,
collective investment schemes, and other
financial institutions. Service providers
include consultants to pensions funds.
CRISA is endorsed by the Association for
Savings and Investment South Africa
(ASISA), the FSCA, Batseta (the organisation
of principal officers, trustees and fund
fiduciaries), the Government Employees
Pension Fund and the Institute of Directors
in South Africa.
CRISA, which is designed to work hand
in glove with the King code, gives direction as to how asset owners should carry out their activities
in order to act responsibly and achieve sound governance. The code pays particular attention to the
manner in which financial institutions perform investment analysis and exercise their rights, as
asset owners, in order to deliver value in its broadest possible definition. In this sense, value is
measured against the long-term sustainability of activities, not just the financial benefits accruing
to direct beneficiaries of the investment business.
CRISA embraces five key principles, which should be encapsulated in formal policies adopted
by institutions:
1. The institutional investor should incorporate sustainability considerations, including a systemic
approach to integrating material environmental, social and governance (ESG), into its investment
analysis and investment activities.
2. The institutional investor should demonstrate the acceptance of the rights and responsibilities
of asset ownership diligently to enable effective stewardship. In practice, this means that
institutions are encouraged to engage with companies in which they invest, to attend and vote
at shareholder meetings in accordance with CRISA policies, and to promote transparency in
communication. Under CRISA, these responsibilities still attach to the institution even if
some functions are outsourced to third-party service providers.
3. Where appropriate, institutional investors should consider a collaborative approach to promote
acceptance and implementation of the principles of CRISA and other codes and standards applicable
to institutional investors and targeted capacity building throughout the investment industry.
4. The institutional investor should have sound governance structures and processes in place so
that investment structures and activities reflect and promote responsible investment and
diligent stewardship and proactively manage conflicts of interest.
5. Investment organisations should ensure disclosures are meaningful, timeous and accessible to
ensure stakeholders can make informed assessments of progress towards positive outcomes.
The code requires that institutional investors fully and publicly disclose at least once a year to
what extent the code has been applied. Reasons must be given if any of the principles of the code
have not been followed.
Although CRISA is a voluntary code it has become the standard for investment activities in
South Africa. The full code is available on the CRISA website (www.crisa2.co.za)
Treating Customers Fairly (TCF)
One of the responsibilities of the FSCA is to protect consumers of financial products offered by
regulated entities. As part of this objective, the FSCA released a Treating Customers Fairly discussion
paper in May 2010 based on the TCF initiative of the UK Financial Services Authority (FSA) started
in 2001. In November 2011 ASISA published a TCF Best Practices Guideline for its members.
The TCF principles aim to ensure that customers enjoy good service, straightforward
communication, informed advice and appropriate products from providers of financial services and

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