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South African regulators have announced a new financial framework that permits fund managers to allocate 100% of their portfolios to foreign assets. This move effectively eliminates the previous 45% offshore investment cap for qualifying investment vehicles. The policy shift, part of a comprehensive overhaul of the nation's exchange control regime, was unveiled following a joint briefing by the South African Reserve Bank (SARB), the National Treasury, and the Johannesburg Stock Exchange (JSE).
The transition to a 100% foreign asset allocation applies specifically to ring-fenced mandates. By removing the long-standing restrictions, the government aims to position South Africa as a more competitive hub for managing global investment portfolios. Authorities believe that enabling domestic managers to operate without the constraints of local investment quotas will encourage the growth of the financial services sector and allow for more diversified strategies from within South Africa's borders.
The proposed changes are currently in the consultation phase, with regulators inviting public comments on the draft framework until November 30. Financial industry stakeholders have expressed optimism about the reform, viewing it as a significant shift toward modernizing South Africa’s investment landscape. Proponents argue that the move could attract substantial investments and bolster the country's reputation as a sophisticated financial gateway, potentially attracting significant capital in the future.