THIS QUARTER SAW revisions to regulations impacting the South African pension funds industry. A quick outline is included below.


On 8 March, in a move to improve governance in our industry, Dube Tshidi, the registrar of pension funds at the (then) Financial Services Board, issued Directive PF No. 8. It limits the giving or receiving of gifts or gratuities between parties in the industry to no more than R500 per year. Effective immediately, the aim is to combat corruption in a clear and consistent manner and prevent parties from soliciting business through gratification, or receiving any material gratification. An equivalent obligation has existed in the FAIS General Code for Financial Service Providers and their representatives since April 2010.

The directive is comprehensive, both in defining what it means by ‘gratification’ and in listing all parties in the service of retirement funds who are now subject to a ‘gratification’ limit. The definition incorporates any gratification:

  • which creates a conflict of interest with a stakeholder’s fiduciary duties towards the fund;
  • which exceeds the annual R500 limit from any one service provider;
  • which relates to local or international due diligence, including but not limited to subsistence, travel or accommodation;
  • which relates to local or international entertainment or sporting events, including subsistence, travel or accommodation; and
  • including conference costs or expenses of funds’ governing boards.

An exception to the rule is remuneration paid by a sponsor of a retirement fund to a board member appointed by the sponsor – thus potentially opening the route to having more independent trustees on pension fund boards. 

The directive reiterates that all stakeholders have a duty to report violations of this new rule.  In effect, every industry participant has a role in protecting the hard-earned savings of South Africans.


On 21 February, following the 2018 Budget, the SA Reserve Bank issued Exchange Control Circular No. 7/2018, detailing the upward revision of foreign investment limits.

For retirement funds this meant an increase in the total amount that can be invested outside South Africa by 10% – a 5% increase in allocation to foreign and an additional 5% increase in allocation to Africa excluding South Africa. Total foreign assets will have a maximum exposure of40% (instead of 30%). The increased flexibility opens up more opportunities for retirement funds to maximise risk-adjusted returns on behalf of members. The revision allows for greater diversification within portfolios, increasing possible exposure to global companies and themes while improving overall risk management.


On 1 April 2018, the Financial services board (FSB) was transformed into the Financial Sector Conduct Authority, marking the formal implementation of the Twin Peaks model of financial sector regulation that has been in process since 2011.

As a reminder, the Twin Peaks model looks to divide the regulatory architecture into a Prudential authority – located in the South African Reserve Bank, and a separate Financial sector conduct authority. Sections of the FSR act will come into operation in a phased manner over the course of this year. As a start though, look to use the new website for all key regulatory information previously housed under the FSB.

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In a panel discussion at our recent Talking Investments with Coronation conference, industry experts discussed regulatory changes, transformation and sustainability.

We’re up for the challenge