IN THIS ISSUE

The CIS industry statistics for the quarter and year ending March 2015 showed that for the first time in a number of years quarterly net inflows into SA Equity portfolios exceeded net inflows into South African Multi Asset portfolios by more than double. SA Equity portfolios attracted R8.8 billion in net inflows for the first quarter of this year, with the bulk of the money flowing into SA General Equity portfolios, while SA Multi Asset portfolios recorded R4.3 billion.

At the end of the first quarter 2015, SA Multi Asset portfolios held 49% of assets, Equity portfolios 23%, Interest Bearing portfolios 24% and Real Estate 4%.

The local CIS industry managed assets of R1.8 trillion at the end of the first quarter this year compared to R1.7 trillion at the end of December 2014. The industry offered investors 1 211 portfolios.

Net inflows of R16.4 billion in the first quarter of this year brought to R98 billion the total net inflows for the 12 months ended March 2015.

ASISA requested National Treasury to clarify regulations 9 and 11 of the Income Tax Act regarding the transfer between tax free saving accounts and permissible fee structures, including performance fees in underlying funds. The guidance provided by National Treasury has been communicated to ASISA members. If you have not received the National Treasury communication, please e-mail Rosemary Lightbody.

ASISA submitted comment on the draft Financial Intelligence Centre Amendment Bill on Friday, 29 May 2015. 

Broadly, the Bill provides for the implementation of the United Nations Security Council Resolutions relating to the freezing of assets, the adoption of a risk-based approach to customer due diligence measures and the enhancement of customer due diligence requirements.  The Bill also introduces the concepts of beneficial ownership, ongoing due diligence, and foreign and domestic prominent influential persons.

This discussion paper was published by the FSB at the end of April with a deadline for comment of 1 June. ASISA requested an extension due to comments on the Insurance Bill being required during the same comment period.  The FSB granted ASISA an extension until 12 June 2015 to submit comments on those aspects of the paper that are not contained in the Insurance Bill.

In summary the paper:

• • Outlines the results of the reinsurance regulatory review carried out by the FSB;
   
• • Sets out the challenges present in the current regulatory framework relating to reinsurance;
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• • Puts forward a number of proposed reforms aimed at mitigating these challenges; and
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• • Invites feedback from industry regarding the above (specifically on the proposed reforms which are contained in Chapter 3).

The FSB released for comment a draft tax proposal under the Solvency Assessment and Management (SAM) project for life insurers. ASISA and the Actuarial Society of South Africa are represented on the FSB’s SAM tax working group.

Once finalised the proposal will be submitted to the SAM Steering Committee for approval in June 2015. The proposal supports alignment with the International Financial Reporting Standard (IFRS) and makes some proposals on how to value liabilities for income tax purposes.

The Davis Tax Review Committee terms of reference include looking at VAT. ASISA made a submission to the Committee in May 2015 setting out some of the concerns our members have raised regarding VAT as it currently applies to financial services especially life insurers and retirement funds. ASISA requested to further engage with the Davis Tax Review Committee in this regard.

ASISA is the country sponsor for the Global Investment Performance Standards (GIPS) in South Africa.  At the end of 2014 a new requirement was introduced requiring firms claiming GIPS Compliance to notify the CFA Institute of their status.

ASISA members that claim compliance with GIPS are reminded that their notification as at 31 December 2014 is due by 30 June 2015.  The online notification form can be downloaded from www.gipsstandards.org.

The Fund is excited to announce the launch of the Broker Development Programme for the Insurance Sector Education and Training Authority (INSETA). Through this initiative the Fund aims to support the growth and development of SME brokerages to expand the pool and quality of skills within SA’s Insurance sector. Having screened more than 50 nominations, the pilot programme will develop eight black owned insurance brokers over 12 months targeting increases in turnover, retention, skills and jobs.

The Academy’s six month UCT Life Insurance Underwriters’ Short Course kicked off for the second time in Johannesburg in May. In total this course has been presented four times in the past five years. Dalene Allen, the new Programme Champion for the course, pulled together some of the best minds in the industry to present on the programme, which runs from May to October. In May the Academy also ran the UCT CIS Short Course in Johannesburg under the guidance of CIS Programme Champion Russell du Bois.

The Claritas and CFA Exam Readiness Programmes also completed in May.

We are exceptionally proud of the achievements of the ASISA Academy/ TSiBA Education partnership, which has just produced the fourth group of students starting their industry internships with ASISA members. This is an inspiring example of delivering on much needed skills development in an industry where there is a chronic shortage of specialised skills. 

The 13 candidates successfully completed the 12-month Investment Management Administration & Client Servicing (IMACS) course in May, which is offered by the Academy in partnership with TSiBA Education. We wish them well as they put to the test the hard practical work of the last twelve months.

Kind regards