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South African Reserve Bank
 
 
     
 
 

Portfolio investments 

  • What is a foreign portfolio investment allowance?

    It is the amount of funds institutional investors are allowed to invest offshore. This allowance is calculated as a percentage of the institution’s total retail assets under management. The portfolio investment allowance may not exceed 30% of retail assets in the case of retirement funds and the underwritten policy business of long term insurers and 40% of retail assets in the case of investment managers (registered), collective investment scheme management companies and the investment linked business of long term insures.

    Institutional investors are allowed to invest an additional 10% of their total retail assets by acquiring foreign currency denominated portfolio assets in Africa through foreign currency transfers from South Africa or by acquiring approved inward listed investments, excluding inward listed shares based on foreign reference assets or issued by foreign entities, listed on the JSE Limited.
  • What are institutional and retail assets?

    Institutional assets refer to assets held or managed on behalf of other institutional investors.

    Retail assets refer to assets received from individuals and other entities such as companies, trusts, etc. and include assets received indirectly through an intermediary, such as a linked investment service provider (LISP), nominee company or investment manager not registered as an institutional investor with the Financial Surveillance Department of the South African Reserve Bank. All assets sourced from an intermediary must be identified as either institutional assets or retail assets applicable to the underlying client.
  • Who are the institutional investors eligible for the foreign portfolio investment allowance?

    All retirement funds, long term insurers, collective investment scheme management companies are treated as institutional investors for exchange control purposes.
  • Is registration required for investment managers?

    Yes. Registration is required for all investment managers wishing to invest funds offshore directly. To register with the Financial Surveillance Department of the South African Reserve Bank as an institutional investor, an investment manager must be registered with the Financial Services Board as a discretionary manager or be a stock broker with a discretionary mandate registered with the JSE Limited.

    A formal application must be submitted to the Financial Surveillance Department of the South African Reserve Bank through a bank or alternatively an email must be sent to SARBPORTFOLIO@resbank.co.za.

    Documentation that must be submitted:
    (i) All relevant Financial Services Board/JSE Limited documentation, i.e. proof of registration; and
    (ii) the latest quarterly asset allocation report.
  • Where can I get more information applicable to Institutional Investors?

    Refer to the guidelines document which is available on our website: www.reservebank.co.za. Follow the links: Regulation and supervision > Financial surveillance and exchange controls > Guidelines > General > Guidelines - South African Institutional Investors.
 
 
 
     
 
 
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