Trust Account Exemptions

Business Property Practitioners that Qualify for Trust Account Exemptions

The following business property practitioners qualify for exemption from keeping a trust account in terms of section 23(2) of the Act:
a business property practitioner that has never received any trust monies;
a business property practitioner that no longer receives any trust monies;
a business property practitioner is a managing agent and all funds of the bodies corporate under its management are held in bank accounts opened in the names of the bodies corporate concerned in terms of section 21(4) of the Sectional Titles Schemes Management Act 8 of 2011.
a business property practitioner that has mandated a Payment Processing Agents, provided:
the mandated payment processing agent is registered as a business property practitioner and is in possession of a valid Fidelity Fund Certificate issued by the PPRA;
the mandated payment processing agent operates a trust account environment that complies with the Act and the Regulations;
the trust account environment is audited annually and the trust accounts operated by the mandated payment processing agent are audited annually in compliance with the Act and the Regulations;
the audit report on the trust accounts is submitted to the PPRA by the auditor, annually on the Auditors Portal accessible on the PPRA website, within six months of the financial year-end of the payment processing agent; and
the business property practitioner mandating the payment processing agent holds no trust monies other those held by the payment processing agent.
The trust account exemption is not automatic and the business property practitioner who qualify for a trust account exemption must apply to the PPRA and be issued with a trust account exemption letter that indicates the effective date of that exemption.

Application Process for Trust Account Exemptions

Category A

A business property practitioner who meets all of the following requirements must only submit (through email to audit@theppra.org.za ) to the Authority a completed and sworn affidavit in order to be granted an exemption from keeping a trust account:

who has never been registered as an estate agency under the provisions of the Estate Agency Affairs Act (EAAA);
who has never been issued with a Fidelity Fund Certificate under the provisions of the EAAA;
who has never held trust monies;
who does not intend to mandate any payment processing agent; and
who intends to be granted an exemption from keeping a trust account

Category B

A business property practitioner who was previously registered and issued with a Fidelity Fund Certificate under the provisions of the EAAA, who is not a managing agent, who does not intend to mandate any payment processing agent and who intends to be granted an exemption from keeping a trust account must adhere to the following process, in chronological sequence,  in order to be granted an exemption from keeping a trust account:

Disbursement of all trust monies held, if any, to the persons entitled to the money and in accordance with the requirements of the law;
Closure of all trust accounts currently held;
Submission by the auditor to the PPRA, using the Auditors Portal accessible on the PPRA website, a winding up audit report on the closed trust accounts;
Submission to the PPRA, by emailing audit@theppra.org.za, of a completed and sworn affidavit; and
Submission to the PPRA, by emailing audit@theppra.org.za, of letter(s) from the bank confirming closure of all trust accounts.

Category C

A business property practitioner who was previously registered and issued with a Fidelity Fund Certificate under the provisions of the EAAA, who is not a managing agent, who intends to mandate a payment processing agent and who intends to be granted an exemption from keeping a trust account must adhere to the following process, in chronological sequence,  in order to be granted an exemption from keeping a trust account:

Transfer of all trust monies held, if any, to the payment processing agent; 
Closure of all trust accounts currently held;
Submission to the PPRA, by emailing audit@theppra.org.za, of a completed and sworn affidavit;
Submission to the PPRA, by emailing audit@theppra.org.za, of a letter(s) from the bank confirming closure of all trust accounts; and
Submission to the PPRA, by emailing audit@theppra.org.za, of a letter from the payment processing agent confirming receipt of trust monies and mandate to handle future trust monies.

Category D

A business property practitioner who was previously registered and issued with a Fidelity Fund Certificate under the provisions of the EAAA, who is a managing agent and who intends to be granted an exemption from keeping a trust account must adhere to the following process, in chronological sequence, in order to be granted an exemption from keeping a trust account:

Transfer of all trust monies held, if any, to the bank accounts in the name of the bodies corporate and opened in terms of the Sectional Title Schemes Management Act;
Closure of all trust accounts currently held;
Submission by the auditor to the PPRA, using the Auditors Portal accessible on the PPRA website, a winding up audit report on the closed trust accounts;
Submission to the PPRA, by emailing audit@theppra.org.za, of the full list of the managing agent’s bodies corporate clients;
Submission to the PPRA, by emailing audit@theppra.org.za, of letter(s) from each of the body corporate client on the list in 7.29.4 of this Guideline, in a format that is in accordance with Annexure 7 of this Guideline.
Submission to the PPRA, by emailing audit@theppra.org.za, of a completed and sworn affidavit; and
Submission to the PPRA, by emailing audit@theppra.org.za, of a letter(s) from the bank confirming closure of all trust accounts.
Business property practitioners exempted from keeping a trust accounts under this category must obtain the following documents from the Payment Processing Agent, which must be available to their auditors/independent reviewers or the PPRA on request or during an inspection;
a copy of the valid Fidelity Fund Certificate of the payment processing agent;
a copy of the audit report of the trust account environment of the payment processing agent
a copy of the PPRA email confirming the receipt of the submission of the audit report on the trust account of the Payment Processing Agent

Granting Trust Account Exemption Letters by the PPRA

On successful submission of documents and compliance with the procedures above, the PPRA must consider and, if satisfied, issue the business property practitioner with a trust account exemption approval letter and this letter serves as confirmation of the exemption from keeping a trust account and also confirmation of the effective date of the exemption.

Requirements Applicable to Payment Processing Agents

Payment processing agents must be registered with the PPRA as property practitioners and be in possession of valid Fidelity Fund Certificates issued by the PPRA before accepting any mandates from other property practitioners relating to the handling of trust monies and must provide a copy of the valid Fidelity Fund Certificate to each of their mandating client business property practitioners. 

In addition, payment processing agents must either be authorised by or registered with the Payments Association of South Africa (PASA) as System Operators (SO) and/or Third Party Payment Providers (TPPP). PASA is the payment system management body recognised by the South African Reserve Bank in terms of the National Payment System Act to organise, manage and regulate the participation of its members in the national payment system.

Payment processing agents must either:
open and keep open one trust account with a bank opened in the name of the payment processing agent in terms of section 54(1) of the Act; or 
open different trust accounts or sub accounts with the same bank in the name of the payment processing agent in terms of section 54(1) of the Act,
Provided the payment processing agent operates a trust accounting environment and a digital bookkeeping or accounting system that:
Include a record all pertinent information regarding trust accounts and movements of trust monies for not only each mandating client business property practitioner but also all pertinent information regarding the movement of trust monies for all the individual parties dealt with by each mandating client business property practitioner;
Include the general and subsidiary ledgers, cash books, mandates and all other documents and books of entry required for the proper maintenance of trust accounts, maintained for each of its mandating client property practitioner businesses;
Include all safeguards to protect the records from unauthorised access, alteration, destruction or manipulation;
Is in a format readily retrievable should the PPRA, the auditor, the client business property practitioner or any other person entitled to the records require access to the bookkeeping system.
Payment processing agents must ensure that their mandating client business property practitioners are in possession of a valid Fidelity Fund Certificate issued by the PPRA at all times.

The payment processing agent must annually submit to each of its mandating client business property practitioners:
a copy of the valid Fidelity Fund Certificate of the payment processing agent
a copy of the audit report of the trust account environment of the payment processing agent
a copy of the PPRA email confirming the receipt of the submission of the audit report on the trust account of the Payment Processing Agent

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