South Africa proposes mandates invested 100% in foreign assets

The South African Reserve Bank proposes to allow approved managers to run mandates from within the country that can be invested 100% in foreign assets, according to a draft framework published on 21 October and open for comment until 30 November.

The scheme, dubbed the synthetic financial centre, would not remove the limits applicable to South African investors. When a local institution entrusts funds to an approved manager, its foreign exposure would continue to count towards its prudential limit, currently set at 45% according to Reuters.

South African portfolios hold about 5,000 billion rand of assets abroad, according to Reuters. The new framework seeks to bring part of their management and associated financial jobs back home, without requiring the capital to return to the country.

The exemption would apply to the manager for assets administered on behalf of an eligible investor. The portfolios would have to be kept separate from the rest of its activities, funded through authorised sources of foreign currency and reported to the central bank each quarter.

The project targets in particular life insurers, collective investment managers, certain discretionary financial service providers and private equity managers that meet the licensing conditions. Non-residents could invest without restriction, while resident individuals would remain subject to their foreign exchange allowances.

The Johannesburg Stock Exchange estimates that the reform could attract up to 10,000 billion rand of additional assets over time, without giving a timeline.

A second phase could allow the issuance, listing and trading in South Africa of securities denominated in foreign currencies. The central bank says this step would still require regulatory assessments and a further consultation.

Trading floor at the Standard Bank headquarters in Johannesburg, photographed on 18 March 2010. Archive photo used to illustrate financial portfolio management, unrelated to the October 2026 consultation. Shi Zhao / Wikimedia Commons, CC BY-SA 2.0. Dedicated WebP variant.