Explanatory notes

CIS managers

1.

Fair value, determined according to the Financial Reporting Standards applicable to the entity, e.g., South African Statements of Generally Accepted Accounting Practice or IFRS, should be used to report all portfolio asset holdings as at the end of the calendar quarter. The fair value of foreign assets should be converted to South African rands, using the exchange rate prevailing at the end of the calendar quarter.


2.


Institutions are required to report on the allocation of assets under management, i.e., portfolio assets only.


3.


Assets held through collective investment schemes should be disaggregated according to the relevant categories in A through E, and the disaggregated portions of such investments should be reflected within those categories.


Assets held through foreign-registered collective investment schemes should be disaggregated according to the relevant categories in A through E, and the disaggregated portions of such investments should be reflected within those categories. Where disaggregation is not feasible, such schemes should then be classified according to their dominant asset class.

Derivative products should be included in the underlying asset class to which they relate.

Loan stock should be split between the equity component and the loan component and reflected accordingly.

The following principles should apply to scrip lending: Where scrip is lent and an asset is ceded in its place and is registered in the name of the lender, then the lent scrip should be deducted from the corresponding asset class and the ceded asset should be aggregated into its corresponding asset class. Where scrip is lent and there is no such cession, the value of the transaction should be reflected under ‘Other portfolio assets’ as the lender has only a claim against the counterparty.


4.


Institutional assets include assets received from: (i) pension funds; (ii) life insurers; (iii) CIS managers; and (iv) discretionary financial services providers registered with the Financial Surveillance Department as institutional investors.


Discretionary financial services providers are required to declare their status with respect to registration with the Financial Surveillance Department when they invest with another domestic institutional investor.

All assets sourced from an intermediary, such as an administrative financial services provider, nominee company or a discretionary financial services provider not registered as an institutional investor with the Financial Surveillance Department, identified as institutional assets applicable to the underlying institutional investor should be included as institutional assets in the quarterly asset allocation report of the managing institutional investor.


5.


Retail assets refers to assets received from individuals and other entities such as companies, trusts as well as assets received indirectly from retail clients through an intermediary, such as an administrative financial services provider, nominee company or a discretionary financial services provider not registered as an institutional investor with the Financial Surveillance Department. All assets sourced from an intermediary identified as retail assets applicable to the underlying retail client should be included as retail assets in the quarterly asset allocation report of the reporting institutional investor. Retail assets excludes all assets received from pension funds, life insurers, CIS managers, and discretionary financial services providers registered with the Financial Surveillance Department as institutional investors.


Discretionary financial services providers are required to declare their status with respect to registration with the Financial Surveillance Department when they invest with another domestic institutional investor.

All assets sourced from an intermediary, such as an administrative financial services provider, nominee company or a discretionary financial services provider not registered as an institutional investor with the Financial Surveillance Department, identified as retail assets applicable to the underlying retail client should be included as retail assets in the quarterly asset allocation report of the reporting institutional investor.


6.


Rand denominated foreign assets refers to foreign assets that are held indirectly through a domestic intermediary, policy, or fund. For instance, assets invested with a domestic-registered collective investment scheme (denominated in rands) should be disaggregated into the underlying asset categories and that portion of the asset category that is held in foreign currency or assets should be reported in column (2) or (5). This includes African assets acquired directly and is limited to 10% of total assets under management.


7.


Cash and deposits (A) includes: assets in liquid form which can be liquidated within 7 days and money market instruments.


8.


Loans (B) includes: unsecured notes (whether or not they have inherent option rights or are convertible); money borrowed to bridge insufficient liquidity in portfolios; loans contracted by a fixed property company, the shares of which are included in the portfolios.


9.


Bonds (C) includes: corporate and government bonds; and debentures (excluding compulsorily convertible).


10.


Property (D) includes: immovable property held by a collective investment scheme in property through wholly owned unlisted fixed property companies.


11.


Equities (E) includes: ordinary shares; compulsorily convertible debentures; and depositary receipts. The sum of E.1 to E.5 should equal the total in E. Compulsorily convertible debentures and depositary receipts should be included under E.1, E.2, E.3 or E.4 as relevant.


12.


These assets should be specified in a schedule, which should be attached to the report, where they exceed 2,5% of the total fair value of assets under management. In the case of electronic reporting via the Portfolio Investment Reporting System details of other portfolio assets must be reflected in the comments field.


13.


Total portfolio assets is the sum of categories (A) to (F), including African assets.


14.


Subset of total portfolio assets (as reported in row G) that qualifies for 10% African allowance. Not necessary to specify the precise asset classes. Eligible African assets are included in the foreign assets reported under each asset class i.e. row A - F.


15.


Institutional assets deemed foreign is calculated as the sum of rand-denominated foreign assets (reported in row G, column (2)) and foreign-currency denominated assets (reported in row G, column (3)) less row G1, columns (2) and (3).


16.


Institutional assets deemed African is calculated as the sum of rand-denominated foreign assets (reported in row G1, column (2) and foreign-currency denominated assets (reported in row G1, column (3)).


17.


Retail assets deemed foreign for is calculated as the sum of rand-denominated foreign assets (reported in row G, column (5)) and foreign-currency denominated assets (reported in row G, column (6)) less row G1, columns (5) and (6).


18


Retail assets deemed African is calculated as the sum of rand-denominated foreign assets (reported in row G1, column (5) and foreign-currency denominated assets (reported in row G1, column (6)).


19


This is calculated as the rand amount in row H divided by the sum of columns (1), (2) and (3) in row G expressed as a percentage.


20


Calculated as the rand amount in row I divided by the sum of columns (1), (2) and (3) in row G expressed as a percentage.


21


This is calculated as the rand amount in row J divided by the sum of columns (4), (5) and (6) in row G expressed as a percentage.


22


Calculated as the rand amount in row K divided by the sum of columns (4), (5) and (6) in row G expressed as a percentage.