National Treasury’s tax-free savings product
The draft Taxation Laws Amendment Bill, published on 17 July 2014, includes provisions for a tax-free savings product. ASISA has participated in several engagements with National Treasury on this and we are satisfied with the proposals made, in particular that long-term insurers and linked investment services providers (LISPs) will also be permitted as providers of the product, along with collective investment schemes (CIS) and banks.
We also support the workable, pragmatic structure put in place to discourage consumers from exceeding the permitted contributions to the tax-free savings product.
Comments on the draft Bill are due by 17 August 2014 and ASISA is collating comment from representatives on the Red Book Standing Committee, with input from the Tax Standing Committee. National Treasury is expected to publish draft regulations governing the provision of the tax-free savings accounts by the various institutional licence categories by the end of October 2014.
Tax changes on the horizon
The draft Taxation Laws Amendment Bill referred to above also proposes changes to the following, which may impact on ASISA members:
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The transfer of the risk business from the Life Offices Individual Policyholder’s Fund to the Corporate Fund;
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Contributions to defined benefit retirement fund and the calculation for fringe benefit tax purposes;
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Clarification of the tax position of employer-owned contingent liability policies;
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Clarification of the accrual date of retirement fund benefits;
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The proposed R100 de minimis dividend withholding tax exemption;
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Exclusion of certain long-term policies retroactively from being instruments under Section 24J of the Income Tax Act;
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Deductible interest limitation in respect of debts owed to persons not subject to tax under Section 23M of the Income Tax Act;
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Clarification that employer-owned income replacement policy benefits will be tax-free for the employee recipients from 1 March 2015; and
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Clarification that the tax-free concession in respect of the offshore sourced component of retirement fund benefits applies to annuity and lump sum benefits.
Draft Regulations for the OTC Derivatives Market
National Treasury early in July published draft regulations under the Financial Markets Act for the OTC derivatives market. The deadline for submissions is 3 September 2014. ASISA has requested comment from the relevant working groups by close of business on 11 August 2014. The OTC Working Group will then prepare the final ASISA submission.
Some of the areas covered under the draft regulations are:
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The licensing of OTC derivative providers;
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The reporting of OTC derivative transactions to either a SA licenced trade repository (TR) or a recognised external TR;
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The clearing of OTC derivatives through a central counterparty (CCP); and
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The duties and functions that may be undertaken by non-SA clearing houses, CCPs and TRs.
Technical Report on the Consumer Credit Insurance Market (CCI) in SA
National Treasury and the FSB published this report on 3 July 2014 for comment by 30 September 2014. The report provides a review of the market structure as well as the current policy and regulatory framework and sets out findings on poor market practices. The key focus areas set out for public comment are:
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Regulating the pricing of CCI;
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Regulating market conduct non-pricing practices; and
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Protecting consumers through insurance cover for credit providers.
ASISA has requested comments from members and will work through the Credit Life Standing Committee to prepare our submission.
Guidance for Divorce Lawyers on Pension Fund Interest
The ASISA Retirement Fund Operations Standing Committee has produced comprehensive material providing guidance to legal professionals as well as consumers on what the law requires before a retirement fund can be legally bound to pay a Pension Fund Interest to the non-member spouse.
This material includes a note aimed at the legal profession on what wording a correct final divorce order should contain and also an article that could be used for consumer education. Both the note and article are available for download here: http://tinyurl.com/pc87x5h.
ASISA has also drafted a consumer education media release to coincide with Women’s Day to ensure that this important message reaches a wide audience.
ASISA Foundation
In May the ASISA Foundation, in partnership with the ASISA Consumer Financial Education Standing Committee, started rolling out its first financial education pilot project in Hammanskraal. It has been very exciting to witness, experience and learn from the implementation of the different financial literacy communication tools and methodologies currently being deployed in the Hammanskraal community.
By the end of July the radio drama series had been completed and 104 workshops had been hosted with 19 of these including industrial theatre. Some 4 415 community members have participated in the Saver Waya Waya programme. The pilot project is scheduled to end around October this year.
The first ASISA Foundation AGM is scheduled for Tuesday 26 August 2014 in Johannesburg. All our funders and stakeholders are invited to attend. For more information please e-mail Nasleen Williams on nwilliams@asisa.org.za.
ASISA Enterprise Development (ED) Fund
An exciting development for the ASISA ED Fund is the decision by the INSETA to commit funding for the skills development of black independent intermediaries. The project has commenced and is in the planning and scoping phase.
Academy Update
Following on from the ASISA Employment Equity and Skills Development Survey, the Academy is increasingly engaging with ASISA members to explore ways to strengthen the pipeline of young black work ready graduates and to connect high calibre candidates with ASISA members. Our partnership with TSiBA is one example of such an initiative.
In July we welcomed the fourth group of 13 TSiBA students on the year-long IMACS@TSiBA programme, which the Academy runs as an elective on TSiBA’s Bachelor in Business Administration degree programme. This group will be engaging with more than 40 industry professionals during their time at the Academy and then continue their learning via a five-month workplace internship with their sponsors during their final year of study.
We would like to remind ASISA members who would like to sponsor students on the 2015/2016 intake that the primary sponsorship window opened on Monday 4th August and closes on Friday 29th August 2014. There is strong demand for TSiBA students so we recommend emailing Zubeida Ebrahim on zebrahim@asisaacademy.org.za as early as possible in August to secure your sponsorship.
July also saw the second Compliance Monitoring and Reporting Blitzcamp take place in Cape Town and spaces on our UCT CIS & IMACS Short Courses in August and September are selling out fast.
Keep an eye out for the next few ASISA Academy snapshot videos, which will include “The role of the Compliance Officer” and “CISCA in Summary”. Follow us on LinkedIn, Twitter, Facebook and YouTube to be kept informed of our latest video releases and all our other learning offerings.
In conclusion
We expect the next four months to be particularly busy on the regulatory front with several submissions due to National Treasury and the FSB in the coming weeks. We would like to thank our member representatives who continue to tirelessly and without reward volunteer their time to help us prepare meaningful and expert submissions in response to draft regulations and legislation published for comment.
Kind regards
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