OCTOBER 2014

Welcome

Dear Stakeholder

A high-powered South African delegation attended the second South Africa Tomorrow Conference in New York at the beginning of October. The conference, hosted by the Johannesburg Stock Exchange (JSE), National Treasury, UBS and Standard Bank, is a joint initiative by the South African public and private sector to present South Africa as an investment destination and as a gateway to the African continent. Major asset managers in the US attended the event.

The South African delegation consisted of senior representatives from the financial services sector, mining, Transnet, Eskom and Government. ASISA was represented by Leon, who described the conference as very well organised and worthwhile.

During the morning session of the conference Finance Minister Nhlanhla Nene presented investors with South Africa’s economic outlook and provided an overview of the National Development Plan (NDP). Deputy Governor of the Reserve Bank, Daniel Mminele, addressed investors on South Africa’s recent monetary policy developments.  Both had to field some tough questions from investors in the question and answer session, which they handled extremely well.

The following key points were raised during the morning session:

• Foreign investors view the South African regulatory environment as favourable. They are also very complementary of South Africa’s financial markets and like the fact that the World Economic Forum’s (WEF) Global Competitiveness Index (GCI) for 2014-15 ranks South Africa first for its auditing and reporting standards.
• Foreign investors like the NDP, but have concerns around the implementation in light of South Africa’s pedestrian GDP growth, lack of power generation abilities, growing debt ratios and twin deficits.
• Potential investors are concerned about South Africa’s labour productivity and strikes especially in the mining sector.
• There was general agreement that there should be greater collaboration between the private sector and Government to address these issues and to make the National Development Plan a reality.

For the remainder of the conference, Leon participated in 11 one-on-one meetings requested by investors. He reports that these investors were particularly interested in South Africa’s financial markets and fund management capabilities, infrastructure development in South Africa and Africa, as well as South Africa as an entry point to the rest of Africa.

Delay in the implementation of the retirement tax reforms

ASISA has taken note of the decision by Government to delay the implementation of the retirement tax reforms, which were meant to come into effect on March 1 next year. Our members have been preparing for the original implementation date and this delay is impacting on them.

Retirement fund rules that have not yet been approved to accommodate the new regime can be withdrawn but unfortunately a new rule amendment to restore the status quo will be required if these new rules had already been approved.
 
The following will still apply from 1 March 2015:

• The changes to the tax regime for income protection policies (IPP).
• The introduction of a tax-free investment vehicle. The draft regulations setting out the product rules are expected by the end of October 2014.
• The ability to delay retirement from a retirement fund so that accrual for tax purposes is when you elect to take the benefits.
• The premiums on employer-owned contingency liability policies are not tax deductible.

ASISA is liaising with National Treasury on the way forward regarding the implementation of the retirement tax reforms and we will keep members informed.

Treating Customers Fairly (TCF) Complaints Management Discussion Document

The Financial Services Board (FSB) published this discussion document for comment on 21 October 2014. The deadline for submissions is 1 December 2014 and ASISA member comment is being coordinated through the ASISA TCF Standing Committee.

Academy Update

The high point for the Academy in October was the graduation of 16 Claims Assessors from the UCT Life Insurance Claims Assessor Short Course in Johannesburg. This course is one of four Academy short courses endorsed by the University of Cape Town.

During the month the Academy also delivered a sold-out UCT Investment Management and Client Services (IMACS) Short Course, completed the second Claritas Exam Readiness Programme for the year and commenced the second CFA Exam Readiness workshop series for 2014 in both Cape Town and Johannesburg.

The Academy’s drive to educate trustees continued with an engaging ethics workshop presented to the members of Batseta Council of Retirement Funds for SA. This vital relationship will assist the Academy in marketing its three trustee education workshops to South Africa’s retirement fund trustees. The Academy’s partnership with the ASISA Foundation is making it possible to offer these workshops for free to trustees. Please email David Morris on dmorris@asisaacademy.org.za if you know of any retirement funds that would benefit from these workshops.

Looking ahead to November, we are excited to be launching the Academy’s Financial Journalists Bootcamp for the first time in Johannesburg. There is strong demand from the media houses to place staff on this pioneering programme, which will be repeated in Cape Town in March 2015.

We encourage you to consult the Academy 2015 learning calendar by clicking here to assist you in planning your team’s learning for next year.

In conclusion

November is traditionally one of the busiest months at ASISA with Board Committee meetings scheduled for most of the month ahead of the last ASISA Board Meeting for 2014, which takes place on 28 November. We therefore expect our last Dispatches for the year, scheduled for release in the first week of December, to be filled with news.

Kind regards