The Financial Sector Conduct Authority (FSCA) has imposed an administrative penalty of R30 000 on Prime Collective Investment Schemes Management Company Prime CIS (RF) for contravening the Collective Investment Schemes Act.
Prime had established a co-named portfolio with 10X Investments called the 10X Prime High Equity Fund. From February 1 to November 14 last year, when marketing its financial products on its website, 10X made a misleading statement that the fund had shown a 10-year performance return of 11.3% a year.
The FSCA says this performance figure was inaccurate and misleading in that it related to a retirement product offered by 10X.
The fund incepted in December 2015 and its performance in 2016 and 2017 was 4% and 6.1% respectively.
In mitigation, the FSCA considered that Prime accepted responsibility for its actions, co-operated during the processes, rectified the contravention, and implemented measures to prevent such a contravention from re-occurring.