FINAL AMENDMENTS TO REGULATION 28 OF THE PENSION FUNDS ACT
Following two rounds of public comment during 2021, National Treasury has published the final amendments to Regulation 28 of the Pension Funds Act, 24 of 1956.
Notable amongst the amendments include, but are not limited to:
A limit of 45% for exposure in infrastructure investment. “Infrastructure” is defined as “any asset that has or operates with a primary objective of developing, constructing and/or maintaining physical assets and technology structures and systems for the provision of utilities, services or facilities for the economy, businesses, or the public.”
To further facilitate the investment in infrastructure and economic development, the limit between hedge funds and private equity has been split. There will now be a separate and higher allocation to private equity assets, which is 15% increased from 10%.
The continued prohibition of investment in crypto assets, including in respect of other assets not referred to in Table 1.
Only investments in CISCA approved hedge funds will be permitted. The reporting exclusion on look-through of CIS and insurance policies has been removed to enable the regulators to collect important statistics on underlying exposures, as part of understanding and monitoring linkages in the financial system and for proactive supervision.
The amendments will take effect on 3 January 2023, to enable regulators and fund managers to comply with the new regulations.
The Financial Sector Conduct Authority (FSCA) is in the process of finalising the standard on reporting requirements aligned to the revised Regulation 28 and will issue it for public comment soon.