HOW MUCH CAN A SOUTH AFRICAN AS­SET FUND OR PORT­FO­LIO IN­VEST OFF­SHORE?

Finweek English Edition - - FUND FOCUS -

Ac­cord­ing to Trad­ing Eco­nom­ics, all Reg­u­la­tion 28-com­pli­ant port­fo­lios and funds in any of the South African unit trust cat­e­gories may in­vest off­shore, but are only per­mit­ted to in­vest 25% of their as­sets in this way. Push­ing the lim­its of this bound­ary be­comes com­plex in an en­vi­ron­ment of ex­treme cur­rency fluc­tu­a­tions, be­cause funds that were al­ready at or near this limit would be pushed be­yond it if the rand falls. Both the Col­lec­tive In­vest­ment Schemes Con­trol Act (CISCA) and Reg­u­la­tion 28 state that when this hap­pens for mar­ket move­ment rea­sons, in­vestors have 12 months to get back in line. This is to en­sure that man­agers don’t be­come forced sell­ers, which could po­ten­tially prejudice in­vestors. There are also ex­change con­trol lim­its that ap­ply to an as­set man­ager’s en­tire re­tail unit trust book. They are al­lowed 30% of their as­sets un­der man­age­ment to be held any­where out­side of SA, with an ad­di­tional 5% al­lowance for in­vest­ments in the rest of Africa.

Newspapers in English

Newspapers from South Africa

© PressReader. All rights reserved.