IN THIS ISSUE

The postponement of the annuitisation of provident fund retirement benefits until 1 March 2018 was confirmed in the Budget Speech on 24 February 2016. On this day, Finance Minister Gordhan also tabled the Revenue Laws Amendment Bill 2016. This Bill introduces these changes and postpones the tax-free transfer of pension to provident funds until 1 March 2018. The Bill will need to go through the Parliamentary process before it becomes effective.

The intention to postpone the effective date for transfers of tax free investment products between product providers from 1 March 2016 to 1 November 2016 was announced as part of the 2016 Budget Review. An urgent amendment to the regulations governing tax free investment products to bring about this change is expected.

There were some positive developments announced in the National Budget on some tax issues that ASISA had taken up with National Treasury, the Financial Services Board (FSB) and the South African Revenue Services (SARS) relating to:

The Parliamentary Standing Committee on Finance (SCoF) gave further opportunity for written submissions on this Bill and more public hearings were held during February 2016. In the interim, the respective legal counsels of ASISA and National Treasury liaised on the constitutional aspects of the Bill.

Consensus in principle was reached on the relevant provisions. ASISA's legal counsel briefly presented the consensus view to the SCoF, while ASISA presented on the Significant Owner issues in the Bill. The SCoF will next address the Bill between 12 April and the third week of May.

In November last year the Financial Services Board (FSB) published their Status Update: RDR Phase 1 document for comment by 1 February 2016. In December 2015 they published their General Status Update: RDR.

ASISA held a workshop with members who submitted comments, and the final ASISA submission on the Phase 1 Update was sent to the FSB on the due date. ASISA is liaising with the FSB to set up discussions on various aspects of RDR and the Phase 1 implementation.

SCoF is currently considering this Bill. ASISA has submitted comments and has made two presentations. ASISA has also participated in stakeholders meetings on the Bill arranged by National Treasury.

Draft amendments to the FAIS Fit and Proper Requirements for Financial Services Providers, their key individuals and representatives were published on 18 December 2015. An ASISA working group is currently considering comments received from members and will finalise the ASISA submission by the due date of 15 March 2016.

ASISA signed up to become a UNPRI Network Supporter at the end of January this year.  PRI Network Supporters are non-profit peer organisations that publicly express support for the PRI within their constituencies. This partnership enables Network Supporters to work with the PRI to raise awareness of responsible investment and the PRI within the investment community in different regions and sectors.

The GIPS Executive Committee issued the exposure draft for the Guidance Statement on Broadly Distributed Pooled Funds for public comment. The purpose of this guidance statement is to address the application of the GIPS standards from the perspective of pooled unitised investment vehicles with broad distribution, where there is typically no or minimal contact between the firm managing the pooled fund and prospective pooled fund investors. The GIPS Standing Committee will prepare comments for submission by 29 April 2016.

ASISA hosted its annual media conference in Cape Town and Johannesburg early in February. The following topics were covered:

Investors had almost R1.9 trillion invested with the local Collective Investment Schemes (CIS) industry at the end of December 2015. This represents a healthy increase of around R200 billion from the R1.7 trillion in assets under management at the end of 2014.

The CIS industry statistics for 2015 also show that the local CIS industry attracted net inflows of R101 billion in 2015, only slightly less than the R109 billion recorded in the previous year.

The South African hedge fund industry grew its assets under management by R5.1 billion in the 12 months to 31 December 2015, ending the year with assets of R62.1 billion.

To date the Fund has deployed R50 million in financial and acceleration support to more than 200 industry-aligned SMEs, resulting in an average growth in revenue of 36% across the supported SMEs.

The Fund is privileged to have raised R203 million to date and has received additional investment commitments of R90 million expected to be concluded by June 2016.

The Academy started the year with graduation ceremonies for the four short courses run in partnership with UCT, celebrating learning success with 23 graduates from the Claims Assessors, CIS and IMACS Short Courses in Cape Town and 22 graduates from the CIS and Underwriters Short Courses in Johannesburg.

Adding to the excitement, two deserving graduates from the Underwriters and Claims Assessor courses were selected and sponsored by the industry to attend the International Congress of Life Assurance Medicine (ICLAM) in the Netherlands in May 2016.

The Academy’s second CIS@UJ programme was presented from mid-January to mid-February in partnership with the University of Johannesburg (UJ). This work-readiness/internship programme for B.Com (Investment Management) graduates was successfully piloted in 2015.  The Academy has received resoundingly positive feedback about the quality and effectiveness of the programme and all of the interns from the 2015 group have now been permanently employed.

Following on the success of this UJ programme and in response to an identified need for more black independent financial advisers (IFAs) in South Africa, the Academy extended its collaboration with the university by piloting an IFA internship programme for UJ’s B.Com (Financial Planning) graduates.  With the work-readiness component of both programmes completed in February, all of the interns have now commenced their 12-month workplace internships.

The IMACS@TSiBA programme continues steadily with the 2015/2016 candidates having passed the first component of their IMACS course in 2015.  There has been a strong demand from employers for both the 2016/2017 intake and even the 2017/2018 intake.

Following on the success of the Academy’s Retirement Fund Trustee Education Workshops in 2015, two workshops were delivered in February to trustees in Johannesburg and in Cape Town.

Toward the end of February the ASISA Academy also ran an in-house Equity Analysts’ Bootcamp for the Old Mutual Investment Group in Cape Town.

It is evident from this summary of headline activities that the ASISA team hit the road running at the start of 2016. We are pleased that a number of exciting foundations have been laid in a relatively short period of time, and we look forward to implementing these meaningful interventions with urgency for the greater good of the citizens of this country.

Kind regards