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CURRENCYSHARES SOUTH AFRICAN RAND TRUST - 10-Q - Management's Discussion and Analysis of Financial Condition and Results of Operations

June 9, 2014



Cautionary Statement Regarding Forward-Looking Information

This report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as "anticipate," "expect," "intend," "plan," "believe," "seek," "outlook" and "estimate" and other similar words. Forward-looking statements are based upon our current expectations and beliefs concerning future developments and their potential effects on us. Such forward-looking statements are not guarantees of future performance. Various factors may cause our actual results to differ materially from those expressed in our forward-looking statements. These factors include fluctuations in the price of the South African Rand, as the value of the Shares relates directly to the value of the South African Rand held by the Trust and price fluctuations could materially adversely affect an investment in the Shares. Readers are urged to review the "Risk Factors" section contained in the Trust's most recent annual report on Form 10-K for a description of other risks and uncertainties that may affect an investment in the Shares.

Neither Guggenheim Specialized Products, LLC d/b/a Guggenheim Investments (the "Sponsor") nor any other person assumes responsibility for the accuracy or completeness of forward-looking statements contained in this report. The forward-looking statements are made as of the date of this report, and will not be revised or updated to reflect actual results or changes in the Sponsor's expectations or predictions.

Trust Overview

The CurrencyShares® South African Rand Trust (the "Trust") is a grantor trust that was formed on August 7, 2008. The Trust issues shares (the "Shares") in blocks of 50,000 (a "Basket") in exchange for deposits of South African Rand and distributes South African Rand in connection with the redemption of Baskets.

The Trust is a passive investment vehicle. The Trust does not have any officers, directors or employees. The investment objective of the Trust is for the Shares to reflect the price of the South African Rand plus accrued interest, if any, less the expenses of the Trust's operations. The Trust does not engage in any activities designed to obtain profit from, or ameliorate losses caused by, changes in the price of the South African Rand.

Definition of Net Asset Value

The Trustee will calculate, and the Sponsor will publish, the Trust's Net Asset Value ("NAV") each business day. To calculate the NAV, the Trustee will add to the amount of South African Rand in the Trust at the end of the preceding day accrued but unpaid interest, if any, South African Rand receivable under pending purchase orders and the value of other Trust assets, and subtract the accrued but unpaid Sponsor's fee, South African Rand payable under pending redemption orders and other Trust expenses and liabilities, if any. The NAV will be expressed in U.S. Dollars ("USD") based on the "Closing Spot Rate," which is the South African Rand/USD exchange rate as determined by The WM Company, as of 4:00 PM (London time/London fixing) on each day that NYSE Arca is open for regular trading. If, on a particular evaluation day, the Closing Spot Rate has not been determined and announced by 6:00 PM (London time), then the most recent Closing Spot Rate will be used to determine the NAV of the Trust unless the Trustee, in consultation with the Sponsor, determines that such price is inappropriate to use as the basis for the valuation.

The Trustee will also determine the NAV per Share, which equals the NAV of the Trust, divided by the number of outstanding Shares. The NAV of the Trust and the NAV per Share will be published by the Sponsor on each day that NYSE Arca is open for regular trading and will be posted on the Trust's website, www.currencyshares.com.

Movements in the Price of South African Rand

The investment objective of the Trust is for the Shares to reflect the price in USD of the South African Rand plus accrued interest, less the expenses of the Trust's operations. The Shares are intended to provide institutional and retail investors with a simple, cost-effective means of gaining investment benefits similar to those of holding South African Rand. Each outstanding Share represents a proportional interest in the South African Rand held by the Trust. The following chart illustrates recent movements in the price of South African Rand in USD as reported by the Bloomberg Professional service.

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Table of Contents [[Image Removed: LOGO]] Liquidity



The Sponsor is not aware of any trends, demands, conditions or events that are reasonably likely to result in material changes to the Trust's liquidity needs. The Trust did not have any Authorized Participant creation activity during the fiscal quarter ended April 30, 2014. The balance reflected in the financial statements is seed capital from the Sponsor.

Critical Accounting Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires the Sponsor's management to make estimates and assumptions that affect the reported amounts of the assets and liabilities and disclosures of contingent liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the period covered by this report.

In addition to the description below, please refer to Note 2 to the financial statements for further discussion of our accounting policies.

The functional currency of the Trust is the South African Rand in accordance with ASC 830, Foreign Currency Translation.

Results of Operations

No additional Shares were created or redeemed during the year ended October 31, 2013 or the six months ended April 30, 2014. As of October 31, 2013, the number of South African Rand owned by the Trust was 1,000 resulting in a redeemable capital share value of $100. As of April 30, 2014, the number of South African Rand owned by the Trust was 1,000 resulting in a redeemable capital Share value of $95.

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