Explanatory notes

Discretionary financial services providers

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. Note that assets obtained offshore by an individual investor in terms of the single discretionary allowance or foreign capital allowance for individuals, and registered in the name of the individual investor, must not be included in total assets under management. Assets managed offshore on behalf of non-resident clients should also be excluded.

3.

Assets held through collective investment schemes, insurance policies, and other investment products should be disaggregated according to the relevant categories in A through D, 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 D, 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.

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 to 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.

7.

Cash and deposits (A) includes: deposits with approved institutions; money market instruments; money market collective investment schemes.

8.

Bonds (B) includes: bonds carrying a government guarantee; bonds issued by local authorities and specified organisations; corporate bonds and debentures which are not compulsorily convertible; and any other bonds.

9.

Property (C) includes: property based collective investment schemes, property shares and direct property.

10.

Equities (D) includes: listed and unlisted equities (ordinary and preference shares); compulsorily convertible debentures; depository receipts, equity-based collective investment schemes; and equity index-linked financial instruments (e.g., SATRIX). The sum of D.1 to D.5 should equal the total in D. Compulsorily convertible debentures and depositary receipts should be included under D.1, D.2, D.3 or D.4 as relevant. Private equity funds should be included in D.4 (unlisted equities).

11.

Assets not specified in categories (A) to (D).

12.

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

13.

Subset of total portfolio assets (as reported in row F). Not necessary to specify the precise asset classes. Eligible African assets are included in the foreign assets reported under each class i.e. rows A – E.

14.

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

15.

Institutional assets deemed African for statistical purposes is calculated as the sum of rand-denominated foreign assets (reported in row F1, column (2) and foreign-currency denominated assets (reported in row F1, column (3).

16.

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

17.

Retail assets deemed African for statistical purposes is calculated as the sum of rand-denominated foreign assets (reported in row F1, column (5) and foreign-currency denominated assets (reported in row F1, column (6).

18.

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

19.

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

20.

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

21.

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