• Section 86 (1) Every legal practitioner referred to in section 84(1) must operate a trust account.
• Section 86 (2) Every trust account practice must keep a trust account at a bank with which the Fund has made an arrangement as provided for in section 63(1)(g) and must deposit therein, as soon as possible after receipt thereof, money held by such practice on behalf of any person. – Interest accrued must, in the case of money deposited in terms of this subsection, be paid over to the Fund and vests in the Fund.
  • 100% of trust interest earned, less approved recoverable bank charges, will be paid monthly to the Fund as provided for by Rule 54.14.16.1 made under the authority of Section 95 (1) of the Legal Practice Act, 28 of 2014.

• Section 86 (4) A trust account practice may, on the instructions of any person, open a separate trust savings account or other interest-bearing account for the purpose of investing therein any money deposited in the trust account of that practice, on behalf of such person over which the practice exercises exclusive control as trustee, agent or stakeholder or in any other fiduciary capacity. – Interest accrued on money deposited in terms of this section must, in the case of money deposited in terms of this subsection, be paid over to the person referred to in that subsection: Provided that 5% of the interest accrued on money in terms of this paragraph must be paid over to the Fund and vests in the Fund.
• In terms of section 86(5)(b) and as provided for by Rule 54.14.16.4 made under the authority of Section 95 (1) of the Legal Practice Act, 28 of 2014, 5% of the interest accrued, on money deposited, during the course of a calendar month or on maturity shall be paid over to the Fund or its nominee on or before the last day of the next succeeding calendar month
• This was effective from 1 March 2019

• Section 86(6) – A legal practitioner referred to in section 84(1) may not deposit money in terms of subsection (2), nor invest money in terms of subsections (3) and (4) in accounts held at a bank which is not a party to an arrangement as provided for in section 63(1)(g), unless prior written consent of the Fund has been obtained.
• Section 86(7) – A legal practitioner referred to in section 84(1) must comply with the terms of an arrangement concluded between a bank and the Fund as provided for in section 63(1)(g.
• Click here to view the list of banks that have entered into a banking arrangement with the Fund.

1. Every trust account practice must keep a trust account at a bank with which the Fund has made an arrangement as provided for in section 63(1)(g) of the Legal Practice Act and must deposit therein, as soon as possible after receipt thereof, money held by such practice on behalf of any person.
2. In terms of rule 54.14.16.1 it is mandatory for trust account practices to pay over 100% of any trust interest accrued in terms of section 86(5), earned on section 86(2) trust bank accounts, less approved recoverable bank charges, monthly to the Fund on or before the last day of the next succeeding calendar month.

1. A trust account practice may, of its own accord, invest in a separate trust savings account or other interest-bearing account any money which is not immediately required for any particular purpose.
2. In terms of rule 54.14.16.3 it is mandatory for trust account practices to pay over 100% of trust interest accrued in terms of section 86(5), earned on section 86(3) trust bank accounts, less approved recoverable bank charges, annually to the Fund on or before the last day of May each year for any interest accrued for the 12-month period ending February.

1. A trust account practice may, on the instructions of any person, open a separate trust savings account or other interest-bearing account for the purpose of investing therein any money deposited in the trust account of that practice, on behalf of such person over which the practice exercises exclusive control as trustee, agent or stakeholder or in any other fiduciary capacity. – Interest accrued on money deposited in terms of this section must, in the case of money deposited in terms of this subsection, be paid over to the person referred to in that subsection: Provided that 5% of the interest accrued on money in terms section 86(5)(b) must be paid over to the Fund and vests in the Fund.
2. In terms of rule 54.14.16.4 it is mandatory that 5% of the interest accrued in terms of section 86(5), on money deposited during the course of a calendar month or on maturity shall be paid over to the Fund or its nominee on or before the last day of the next succeeding calendar month.

• Banks that have made an arrangement, as provided for in section 63(1)(g) of the Legal Practice Act, with the Fund are required to automatically sweep the 5% of trust interest accrued monthly to the Fund, within three working days of the month end.
• A trust account practice may only invest section 86(4) trust funds in a trust investment where the bank, automatically sweeps the 5% of trust interest accrued, monthly, to the Fund.
• This was effective from 1 March 2019

• The purpose of this communication is to remind the Legal Practitioners, Registered Auditors, and all relevant stakeholders about the requirements of section 86 of the Legal Practice Act, No. 28 of 2014 (LPA) and The South African Legal Practice Council Rules made under the authority of sections 95(1), 95(3) and 109(2) of the LPA (LPC Rules), pertaining to payment of trust interest accrued on section 86 trust accounts.
• Download Payment of trust interest accrued on trust accounts to the LPFF in terms of LPA and LPC Rules

1. The remaining Chapters of the Legal Practice Act, No. 28 of 2014 (LPA) came into effect on 1 November 2018, and the Legal Practitioners and all relevant stakeholders are reminded about the requirements of section 87(4)(a), which make it mandatory for Legal Practitioners to pay any unclaimed and unknown monies held in a trust account to the Legal Practitioners’ Fidelity Fund (LPFF).
2. Section 87(4)(a) and (b) of the LPA states that:
   1. Any money held in the trust account of a trust account practice in respect of which the identity of the owner is unknown, or which is unclaimed after one year, must, after the second annual closing of the accounting records of the trust account practice following the date upon which those funds were deposited in the trust account of the trust account practice, be paid over to the Fund by the trust account practice.
   2. Nothing in this subsection deprives the owner of the money contemplated in paragraph (a) of the right to claim from the Fund any portion as he or she may prove an entitlement to.

Please download Payment of Unclaimed and Unknown trust monies in terms of Section 87_4 of the LPA.