Deal execution gets most of the attention, but a fund’s legal exposure doesn’t end at financial close. Ongoing compliance, portfolio companies under distress, and increasingly digital asset exposure all carry their own legal demands, and they tend to arrive with less warning than a transaction does.
A few places where that ongoing exposure tends to sit.
An FSP licence is a standing obligation, not a one-time achievement
FAIS licensing carries reporting cycles and fit and proper requirements that need to be maintained, not just satisfied once, plus category-specific conditions that can change. Treat the licence as a completed task and you can fall out of compliance without noticing.
Collective investment schemes carry their own regime
Where a fund structure falls under CISCA, there’s a distinct set of requirements around scheme registration, manager obligations and investor protections, sitting alongside the fund’s broader formation and licensing requirements. Confirm this applies, or doesn’t, at formation – retrofitting it onto an existing structure is considerably harder.
Business rescue treats creditors and employees differently than liquidation does
Creditors typically have more say in a business rescue process, and employees retain specific protections during it. For an investor with governance rights or board representation, understanding this before a portfolio company is under pressure changes how that pressure gets managed.
A practitioner works alongside your legal team, not instead of it
Appointing a business rescue practitioner doesn’t replace the company’s existing legal counsel. The practitioner runs the statutory rescue process; the company’s own advisers keep handling everything that process doesn’t cover. Assume one displaces the other and you can end up with gaps in both.
Crypto tax positions age quickly
SARS guidance on how crypto assets are taxed has evolved, and a position that was correct eighteen months ago may not be current now. Where a portfolio company holds or transacts in crypto, check this periodically rather than treating one confirmation as permanent.
Moving crypto out of South Africa runs into exchange control
Exchange control rules extend to crypto assets, and the practical question of whether and how they can be moved out of the country is frequently asked and inconsistently answered. Get a specific, current answer before assuming crypto sits outside exchange control’s reach.
Payment processing needs its own authorisation
Businesses processing payments generally need authorisation under the Reserve Bank’s National Payment System framework, separate from broader financial services licensing. Confirm a fintech portfolio company holds the right payment authorisation specifically – don’t assume an FSP licence covers it.
Secondment or ad hoc brief
A fund managing ongoing compliance across several portfolio companies, or working through a distressed situation that will run for months, is usually better served by a secondment – a lawyer embedded with the fund – than by a series of ad hoc briefs that each start from zero context.
A practical way to use this
Most of the above sits after the deal closes, in the ongoing management of the fund and its portfolio, which is exactly the period where legal support tends to taper off just as the compliance obligations are settling in. A standing review of licensing status, portfolio risk and digital asset exposure, run on a periodic cycle, closes that gap.
For fund managers, the deal isn’t where legal risk ends. It’s where a different phase of it begins.
