Trust current account banking is regulated by section 78(1) of the Attorneys Act 53 of 1979. The Attorneys Fidelity Fund (“the Fund”) and the profession have negotiated special arrangements on a national basis with most of the commercial banks.
Practitioners should note the information which follows and ensure that the applicable interest rates and bank service fee structures are correctly applied to their trust current accounts. If practitioners find that their existing arrangements provide a better return, they should endeavour to maintain those arrangements. NB: Practitioners are urged to seriously consider electronic payment systems as costs can be significantly reduced in this way.
To click through to a regularly updated page containing the trust current account details for ABSA, First National Bank, Nedbank and Standard Bank, click here.
Trust Investments Accounts
Trust investments are made for the benefit of the Fund in terms of section 78(2)(a) of the Act, or for the benefit of clients in terms of section 78(2A). The choice of a bank is at the discretion of the practitioner, who should at all times take into account a particular bank’s credit rating before investing trust funds. Kindly note that the Fund cannot offer assistance to practitioners in the event of the failure of a bank in which funds are invested. The following section has more information in this regard.
The Fund has received numerous enquiries from practitioners regarding investments made at financial institutions which have been placed under curatorship. Invariably, the Fund has been requested to provide financial assistance to practitioners who have invested trust funds in such financial institutions. Although the Fund shares practitioners’ concerns as to the plight of depositors, the provisions of the Attorneys Act do not empower the Fund to assist in this regard, more particularly since the primary function of the Fund is to reimburse loss consequent upon the theft of trust monies or property.
The Fund has nevertheless indicated its willingness to provide assistance to statutory provincial law societies by funding the cost of legal opinions in regard to the liability of practitioners towards their trust creditors in such circumstances.
In order to put the position of practitioners beyond any doubt, the Fund has also made representations to the Department of Justice with a view to an amendment to the Attorneys Act in order to provide an indemnity to practitioners against claims by their trust creditors consequent upon the failure of banks at which they may have deposited trust monies. The Fund strongly supports the establishment of a deposit insurance scheme to cover investors against loss upon the failure of a bank.