Is tide turning on SA exchange control, offshore investing?

Recently the South African Reserve Bank (Sarb) went unnoticed when it released Exchange Control Circular Number 15/2020 – with the exception of someone with a keen eye for detail at financial services firm Sygnia. Magda Wierzycka’s team wasted no time in unpicking how it would affect investors, confirming with the central bank and Johannesburg Stock Exchange that the change will have massive implications by effectively facilitating 100% offshore investment.

She noted, too, (see Wierzycka’s article), that the ability to expand exposure to international assets through low-cost index-trackers will not please many of SA’s asset managers who sell ‘active’ funds. ‘Only two significant providers of ETFs reference foreign assets on the JSE: Sygnia and Satrix. Active asset managers cannot launch these products, as it would be seen as an acknowledgement of the failure of active management.’

So, it’s perhaps not surprising that there might be kick back and this might be a temporary state of affairs. Independent financial advisor Magnus Heystek, founder of Brenthurst Wealth Management, told his 33k Twitter followers on Thursday: ‘Looks like a turf war has broken out between Sarb/Treasury and the FSCA re offshore inward listings. Sarb says you can now have 100% offshore, FSCA says “waggebietjie”. We need clarity on this soonest.’

You can discuss the changes with Heystek, and financial advisor Gareth Leonard of Netto Invest, at today’s BizNews Finance Friday webinar. Free to attend, but you must register:

PS: Looking at the northern hemisphere, where lockdowns continue even though vaccine roll-out is in sight, it is possible SA could see a tightening of Covid-19 restrictions. Debating the pros and cons at Monday’s debate, chaired by BizNews founder Alec Hogg, are two of SA’s sharpest minds on data and health policy:

  • Professor Alan Whiteside, OBE, Chair of Global Health Policy, BSIA, Waterloo, Canada & Professor Emeritus, University of KwaZulu-Natal and PANDA’s Nick Hudson, who is strongly opposed to lockdowns.

Here’s the link to register for the Monday noon webinar debate:

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