South African news sites have been flooded and we have had numerous enquiries following the Circular released by the South African Reserve Bank (SARB) which indicates that all locally listed Exchange Traded Funds (ETF’s) that mainly invest into offshore investment opportunities (rand denominated offshore ETF’s) will be classified as inward listings going forward. Investors interpreted this to mean that retirement vehicles  (subject to regulation 28 of the Pension Fund Act), will no longer be subject to the 30% offshore limit because one is now able to invest in offshore ETF’s that will be classified as domestic holdings. 

However, a media statement released this morning confirms the following:

“The Circular issued on 29 October 2020 dealing with the reclassification of inward listed instruments is therefore suspended with immediate effect, to reduce the scope for ambiguity related to compliance with the prudential framework for regulated funds. An amended Circular will be issued following a period of public consultations. All approvals granted on the basis of Circular 15/2020 are also suspended. The dispensation before Circular 15/2020 remains extant.”

We will continue to share updates with our clients as soon as we know more.

The links to the documents referred to are below: