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March 2019

Dear stakeholder

ASISA joined the Public-Private Growth Initiative (PPGI) in March. The PPGI was convened last year by Dr Nkosazana Dlamini Zuma, Minister in the Presidency responsible for Planning, Monitoring and Evaluation, and is facilitated by Dr Johan van Zyl, CEO of Toyota Europe and Chairman of Toyota South Africa, together with Roelf Meyer, who heads up the In Transformation Initiative (ITI).

The aim of the PPGI is to foster a closer relationship between government and the private sector to ensure alignment of plans and objectives as well as implementation of agreements reached at the Presidential Summits held last year.

Accelerating infrastructure investment

Renewed efforts are being made by government to prioritise infrastructure investment in collaboration with private sector funders. The Government Technical Advisory Centre (GTAC), a National Treasury agency, is in the process of setting up an infrastructure investment preparation support facility with the aim of accelerating government’s infrastructure investment program. The budget for this facility was announced by the Minister of Finance in February.

ASISA serves on the GTAC task team and has also been working with the Development Bank of Southern Africa (DBSA) on developing a funding platform for infrastructure assets such as student accommodation, water and broadband. Industry has been providing active input into the development of these concepts via ASISA, the banks and contracted expertise. The GTAC will require sign off on the facility from the private sector, which means obtaining input from ASISA members as well as the Banking Association South Africa (BASA).

ASISA is also actively working with the Independent Power Producers (IPP) Unit on supporting finance mechanisms. Members and banks will be invited onto the technical task team which will commence its work shortly. ASISA senior policy adviser, Gill Raine, will lead the initiative from industry.

Technical Assistance and Mentorship Development (TAMDEV)

TAMDEV was one of the initiatives proposed during the Presidential Job Summit held in October 2018 and is an intervention whereby experienced individuals from the private sector are placed in government-directed roles to assist in the improvement of service delivery. The aim is for private sector participants to partner with government to identify areas of need as well as potential solutions and then to find the human resources from within the private sector for deployment into the identified area of need.

ASISA has assembled a broad group of private sector stakeholders interested in assisting in this initiative. The grouping, which includes members from Business Unity South Africa (BUSA), the South African Institute of Chartered Accountants
(SAICA), Business Leadership South Africa (BLSA) and various private sector partners, will operate from within the National Business Initiative (NBI). NBI aims to commence pilot projects in the second half of 2019.

Capital versus income in portfolios

In the 2018 Taxation Laws Amendment Bill, National Treasury proposed a time-based rule whereby all financial instruments bought and sold within 12 months in a collective investment scheme portfolio would have the gains and losses taxed as ordinary income.

ASISA and many other commentators opposed this proposal. The proposal was withdrawn pending further analysis and consultation. In the 2019 Budget, National Treasury indicated that the 2019/20 tax year will be used to complete research directed at identifying an appropriate response to what is seen as excessive churn in portfolios.

It has since been confirmed that this process will commence late in April 2019 and will include a broad forum of tax professionals. No proposal will be included in the 2019 Taxation Laws Amendment Bill.

In addition to research and analysis being completed by ASISA, PwC were appointed to provide a review on how other jurisdictions have dealt with this issue. True South Actuaries and Consultants is providing empirical analysis.

Tax Directives and Recognition of Transfers (ROT)

A constructive ROT workshop was held on 15 March, which was attended by representatives from the South African Revenue Service (SARS), ASISA and the Institute of Retirement Funds Africa (IRFA). The aim of the workshop was to:

  • Get a common understanding of the root causes of current problems resulting in a large number of outstanding ROTs;
  • Look at possible solutions offered by both industry and SARS;
  • Resolve the current backlog of ROTs, which pose a reputational risk for our industry; and
  • Find ways to make the process more efficient.

A meeting note for the workshop is available on request from Peter Stephan.

Orphan Funds and unclaimed retirement fund benefits

National Treasury and the Financial Sector Conduct Authority (FSCA) have invited ASISA to submit views on how orphan funds and unclaimed benefits can be dealt with better. This follows the Constitutional Court judgment in Rosemary Therese Hunter v Financial Sector Conduct Authority and Others handed down in September last year.

ASISA has established a working group with representatives nominated by the ASISA Regulatory Affairs Board Committee. Regulatory proposals were submitted to National Treasury and the FSCA during March 2019.

Exemption granted for prescribed drawdowns for living annuities

On 7 November 2018 the FSCA published a Draft Conduct Standard on the Criteria for Living Annuities in a Default Annuity Strategy. Comments from ASISA members were submitted to the FSCA, which included a motivation for an exemption in respect of the prescribed drawdowns for living annuities until such time as the Conduct Standard was finalised. We were pleased to see that this exemption was granted in PFA Notice No. 2 of 2019 published by the FSCA on 20 February. The FSCA has indicated that a revised Conduct Standard will be published in due course.

ASISA Foundation

Following the Foundation’s combined Annual General Meeting and Stakeholder Event held in February in Johannesburg, the Foundation hosted a second event on 12 March 2019 to share with Cape Town based stakeholders what has been achieved to date. The various highlights were detailed in the previous edition of Dispatches.

The ASISA Foundation is a non-profit industry initiative, which delivers effective and objective financial literacy and micro-enterprise development programmes to South Africa’s most vulnerable groups. The Foundation prides itself on the independent and objective monitoring and evaluation applied to all projects to assess the impact of programmes. Learnings are implemented across all projects to enhance implementation, reach, methodologies and content.

All programmes qualify as consumer financial education and socio-economic development spend as per the Financial Sector Code and at least 85% of activities are carried out for the benefit of black South Africans (at least 40% must benefit black women).

ASISA Enterprise and Supplier Development

The new ASISA ESD website is live and we would like to encourage you to browse through it. Our stakeholders who are subscribed to the SME Database can now access this supplier portal from the new website.

The supplier portal enables subscribers to monitor the growth of SMEs supported by our funder’s contributions. The portal also provides useful insights and impact metrics for reporting purposes.

ASISA Academy

Three southern African countries enrolled delegates in the Academy’s popular
Collective Investment Schemes (CIS) Short Course as well as the Investment Management Administration and Client Servicing (IMACS) Short Course. Both courses are endorsed by the University of Cape Town (UCT) and were presented in Cape Town from 13 to 19 March.

Both courses were developed by the Academy in collaboration with a group of industry professionals in order to support employees who are new to investment management firms. All sessions are presented as interactive workshops, drawing deeply on the expertise of experienced investment professionals.

Local delegates from ASISA member companies were joined by employees of the Central Bank of Eswatini (formerly Swaziland), the Namibia Financial Institutions Supervisory Authority (NAMFISA), Namibia Asset Management (Coronation) and  Botswana Insurance Company.

In December 2018, the Academy presented a bespoke CIS Bootcamp in Accra for the Ghanaian Securities and Exchange Commission (SEC). The SEC previously sent  employees to attend the UCT CIS Short Course in Cape Town and felt that it would be worthwhile having the rest of the management team in Accra benefit from a bespoke CIS course.

Kind regards

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