By Ana Monteiro.
South Africa proposed rules that would allow local asset managers to oversee foreign investments from the country without being subject to their own offshore limits, advancing a plan to strengthen its position as a financial hub for the continent.
Approved institutions would be able to manage qualifying foreign portfolios and conduct related foreign-currency activity from South Africa under the first phase of the so-called Synthetic Financial Centre, the central bank said in a draft framework published on Wednesday.
The proposal, which is open for public comment until 30 November, would also allow qualifying private equity fund managers to take part.
An estimated R10 trillion ($610 billion) of South African savings is currently managed offshore, according to Operation Phumelela, a public-private initiative established in 2024 to find ways to boost financial-sector competitiveness through reforms. It includes National Treasury officials and leaders in the finance industry.
The proposed framework may allow more of the management to take place in South Africa, even when the underlying assets remain offshore. Investors would remain subject to their applicable prudential foreign-investment limits.
“Such reforms are a logical end point to improving competitiveness and match the capabilities of Mauritius, Dubai and latterly Rwanda, though we anticipate these will take longer to consolidate,” Operation Phumelela – which means succeed in isiZulu – said in February, when the National Treasury first announced the plan in its budget.
“These reforms are a major step forward for the South African financial sector,” Leila Fourie, then chief executive officer of JSE Ltd and chair of Operation Phumelela, said at the time. “They enable us to bring trillions of rands in South African savings – currently managed offshore – back home.”
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