IN THIS ISSUE

The Financial Services Board (FSB) has set up six internal workstreams tasked with reviewing stakeholder comments received in response to the Retail Distribution Review discussion document. As part of the review process, workshops are being scheduled with industry bodies that have submitted comments to ensure that the tenor of the written submissions is correctly interpreted and to clarify any ambiguous feedback.

Three workshops have thus far been scheduled: Workstream 1 – Adviser Categorisation, Workstream 3 – Long-term Risk and Workstream 5 - Sales Execution & Other Intermediary Services. ASISA is represented at the various workshops by senior policy advisor Rosemary Lightbody and various industry representatives who were involved in the development of the holistic ASISA position. ASISA has set up feedback sessions to take place after the workshops for the relevant ASISA Working Group representatives.

The FSB intends to issue an RDR Roadmap and Next Steps document by the end of 2015. Consideration is also being given to the possible early implementation of Phase 1 proposals.

National Treasury published draft regulations under the Pension Funds Act that require retirement funds to provide members with default investment portfolios for the investment of retirement savings, default annuity strategies for members upon their retirement, and default preservation rules for members on termination of membership before retirement. These proposals form part of National Treasury’s broader retirement and savings reforms initiated in 2011 and outlined in the document “2014 Budget update on retirement reforms”.

Comment is due by 30 September 2015. The ASISA structures that responded to the various earlier National Treasury retirement reform discussion papers will drive our response.

Since transfers between product providers will be permitted from 1 March next year, National Treasury is aiming to identify and resolve any operational issues in advance. National Treasury has scheduled a workshop with affected parties for September and ASISA has been requested to submit a list of concerns by 14 August 2015.

The full version of the 2015 draft TLAB has been released by National Treasury. It gives effect to the following key proposals announced in the 2015 Budget Review, which might be of interest to members:

• Closing a loophole to ensure consistent tax treatment on all retirement funds;

• Closing a loophole to avoid estate duty through excessive contributions to retirement funds;

• The tax implications of the outright transfer of collateral;

• Transitional tax issues resulting from the regulation of hedge funds; and

• Withdrawal of special foreign tax credits for service fees sourced in South Africa.

The 2015 draft TALAB gives effect to the following key proposals, which might be of interest to members:

• Medical scheme tax credits to be taken into account for PAYE; and

• Collection of information by South African financial institutions and an associated obligation on the financial institutions to register with SARS.

At a workshop on 31 July 2015, National Treasury and the FSB provided ASISA members with feedback on comments received during the public consultation process on the Draft Insurance Bill. Workshop participants were also informed of key changes to the Bill arising from public comments.

The Draft Insurance Bill was published for comment on 17 April 2015. In line with the Twin Peaks model, the Bill deals with the prudential regulation of both life and non-life insurers. National Treasury has confirmed that the Financial Sector Regulation Bill will proceed to Parliament before the Insurance Bill.

National Treasury approved the following two Government employee payroll deduction facilities for the insurance industry:

•Electronic policy applications via iPads and other tablets.

•An innovative solution whereby premium refunds and other payments can be made directly into the bank account of a Government employee via an external service provider.

The ASISA Performance Fee work group has revised the current ASISA Performance Fee Standard, widening its scope from a pure disclosure standard to a broader standard that addresses all the various components and methodologies of a performance fee. 

The new ASISA CIS Performance Fee Standard has been approved by the Investments Board Committee and will be presented to the ASISA Board for ratification in August with a proposed implementation date of 1 January 2017.  Once ratified, it will be discussed with National Treasury and the FSB.  The working group will also continue its work to extend the standard to other product types, including life products, segregated funds and hedge funds.

The local Collective Investment Schemes (CIS) industry statistics for the quarter and year ending June 2015 were released in the last week of July.

At the end of the second quarter this year, the industry managed assets of R1.8 trillion and offered investors 1 225 portfolios.

Net inflows of R21 billion in the second quarter of this year brought the total net inflows for the 12 months ended June 2015 to R77 billion. South African Multi Asset portfolios continued to attract the bulk of the net inflows.

SA Multi Asset portfolios held 49% of assets, Equity portfolios 22%, Interest Bearing portfolios 25% and Real Estate 4%.

The fifth group of TSiBA students commenced its year-long investment administration learning journey at the Academy in July. This coincided with the exciting news that one of the past TSiBA graduates from this course, Andile Dyonase, has been awarded his Masters in Finance (cum laude) at the Lausanne Business School where he has been studying on a Kofi Anna Foundation scholarship. He has also successfully passed Level One of the CFA exam and plans to return to South Africa in 2016.

Demand has been steadily increasing for the Academy’s Retirement Fund Trustee Education workshops that are run in partnership with the ASISA Foundation at no cost to retirement funds. On average we have delivered a workshop every month for the past nine months throughout the country. Some 143 trustees have benefitted from these workshops, which cover a range of topics from Investment Fundamentals and Active Ownership to Ethics and Governance.

On the Life Insurance front we successfully commenced, for the third year running, the UCT Life Insurance Claims Assessors Short Course in Cape Town.

During August the Academy launches two new programmes. The four-day “Corporate Communicators Bootcamp” sees key members of Sanlam’s communications teams being taught by the best in the industry. The three-day Discounted Cash Flow Valuation and Decision Modelling (DCF & DM) Course will provide experienced investment analysts and corporate finance teams with the latest thinking around optimal investment and project decision making. Spaces are still available on this course. Click here for more information.

On Friday, 7 August, the ASISA Board of Directors will elect a new Chair to replace Johan van Zyl who resigned after stepping down as CEO of Sanlam at the end of June.

The new Chair will be introduced to media representatives at a luncheon following the Board meeting. We will also announce the new Chair to our stakeholders via a special edition of Dispatches.

Kind regards