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South African Reserve Bank
 
 
     
 
 

Portfolio investments 

  • What is a foreign portfolio investment limit?

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

    (ii) Institutional investors are also allowed to invest an additional 10% of their total retail assets under management by acquiring foreign currency denominated portfolio assets in Africa directly through foreign currency transfers from South Africa or indirectly by acquiring approved inward listed investments, excluding inward listed shares, listed on the JSE Limited and classified as 'African'.
  • What are institutional and retail assets?

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

    (ii) 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 and 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 Sector Conduct Authority as a discretionary manager or a stockbroker 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 Sector Conduct Authority/JSE Limited documentation, i.e. proof of registration.
    (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.resbank.co.za. Follow the links: Regulation and supervision > Financial surveillance and exchange controls > Guidelines > General > Guidelines - South African Institutional Investors.
 
 
 
     
 
 
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