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The Discretionary Management Agreement is essential for establishing professional investment management relationships in South Africa's financial services sector. It is used when a client wishes to delegate investment decision-making authority to a licensed investment manager, allowing the manager to make investment decisions without seeking prior approval for each transaction. The agreement must comply with the FAIS Act, Financial Markets Act, and other relevant South African legislation. It typically includes detailed provisions on investment strategy, risk management, fees, reporting, and regulatory compliance. This document is particularly important for institutional investors, high-net-worth individuals, and entities requiring professional portfolio management services, providing a comprehensive framework for the investment management relationship while ensuring regulatory compliance and client protection.

1. Parties: Identification of the investment manager and the client, including registration details and regulatory status

2. Background: Context of the agreement, including the manager's authority to provide discretionary investment services and the client's intention to appoint the manager

3. Definitions and Interpretation: Key terms used throughout the agreement and rules of interpretation

4. Appointment and Authority: Formal appointment of the manager and scope of discretionary authority

5. Investment Objectives and Strategy: Agreed investment objectives, strategy, and any specific investment restrictions

6. Services and Obligations: Detailed description of services to be provided and obligations of the investment manager

7. Risk Disclosures: Mandatory risk warnings and disclosures as required by FAIS Act

8. Fees and Charges: Fee structure, calculation methods, and payment terms

9. Client's Warranties and Undertakings: Client's representations regarding their capacity and authority to enter into the agreement

10. Manager's Warranties and Undertakings: Manager's representations regarding licensing, competence, and regulatory compliance

11. Reporting and Communications: Frequency and content of reports, communication methods, and record-keeping requirements

12. Confidentiality and Data Protection: Obligations regarding confidential information and compliance with POPIA

13. Duration and Termination: Term of agreement, termination rights, and consequences of termination

14. Liability and Indemnification: Extent of manager's liability and mutual indemnifications

15. General Provisions: Standard clauses including notices, amendments, governing law, and jurisdiction