In this newsletter:
Benchtest 08.2012, company news, interesting snippets from a recent investment conference, the final (?) version of Regulation 29, media clippings and more...
News from the market
IMN Africa Cup of Investments conference
This annual conference focusing on institutional and retail investments, took place in Cape Town on 6 and 7 September. In the next few issues we will report back on some of the more interesting observations, trends and discussions presented at this conference:
How the industry has changed over past 50 years:
News from Namfisa
New quarterly reporting requirements
Namfisa recently arranged a meeting with pension funds on the topic of its new reporting requirements that was well attended. An industry meeting was scheduled for 25 September, starting at 8h30. We encourage our clients to ensure that their fund is represented.
The new reporting is to be submitted as at the end of every calendar quarter, within 90 days thereof. Where a fund’s financial year does not end on a calendar quarter, the provision of information to Namfisa will become very cumbersome and undoubtedly more costly as two sets of records will effectively have to be maintained. We suggest that funds consider and discuss with their service providers changing their year end to a calendar quarter end.
FIM Bill: 90 day reporting timeline
The Institute of Chartered Accountants of Namibia identified two main concerns about the FIM Bill being the 90 day reporting timeline and new reporting obligations of the fund’s auditors which were taken up with Namfisa. The Institute expressed its concern about the lack of capacity in the profession and about the bottle necks that currently already exist around certain periods of the year that would be further exacerbated by such tight reporting timelines.
In its response Namfisa confirmed the legislator’s (and Namfisa’s) resolve to stick to the 90 day period and to retain this in the body of the Bill, and made reference to jurisdictions where the timeline is even shorter (60 days). Namfisa indicated however that transitional arrangements could be considered, to facilitate adjustment to the 90 day period. It was also confirmed that the Bill was handed to the Minister and that the matter was now out of Namfisa’s hands.
In the meantime a new initiative has been started by local actuary, Carmen Foster, to engage all key role players in all industries to be regulated by the FIM Bill, in order to make a last attempt of providing the legislator with meaningful contributions on the Bill.
Law and legal snippets
Regulation 29 final version (?)
The latest and possibly final version of Regulation 29 contains a few interesting changes to the previous version reported on in our May newsletter that may be indicative of a mind change at Namfisa.
The following is a summary of some of the other key stipulations of the regulation:
The asset managers association has taken the initiative to set up an industry Special Purpose Vehicle (SPV). It appears that most consultants support this notion. However, this SPV has to be managed by an Unlisted Investment Manager (UIM) as the regulation currently reads. This impairs the ability of pension funds to steer the business in its own bests interests and militates against the principle of ownership, considering that the pension funds are the owners of all investment in any unlisted investments, whereas the UIM only manages these assets for the industry.
We suggest that principal officers should table this idea as soon as possible, with the view to funds taking an early decision that will guide their principal officer and investment managers on how they need to respond to this challenge.
Interesting media snippets
10 good reasons why to invest in money market funds
In the Particia Holburn Money Marketing newsletter
A disabled child could cost you your job
In this article
Financial Advisers to pay up for losses of their clients
The liability of brokers and financial advisers for losses suffered by their clients is a very topical subject in South African media currently. It appears that SA’s new proliferating quasi-courts have singled out the service provider as first port of call for any person who has incurred a loss. Namibia is following the same route and service providers will have to brace themselves for what is likely to come their way too!
In this article by Professor Robert Vivian which appeared in Cover Magazine, the author laments the proliferation of ‘quasi-courts’ in SA in the form of a whole host of new institutions (ombudsmen, adjudicators and tribunals) that multiply and grow and are de facto replacing the judiciary. A second article by same author on the same topic can be accessed here...
A financial adviser has been held liable by the South African High Court for losses incurred by a client in the Sharemax debacle. The FAIS ombud first ruled the adviser liable, whereupon the adviser referred the ruling to the High Court arguing that the FAIS ombud did not have the jurisdiction to rule on this matter and that his actions in terms of the FAIS Act were unconstitutional, as is also argued in the preceding article. The High Court rejected the adviser’s argument for having failed to prove that the relevant section in the Act was indeed unconstitutional. Read the article here...
Pension fund curatorship: Valuation of underlying assets a concern
Yet another debacle in the financial services industry hit SA media headlines, when 3 Rockland group companies were placed under curatorship. The FSB is questioning the fact that a piece of land has appreciated by 2,125% in just 3 years. Apparently this piece of land represents some R 600 million of total asset of just over R 800 million of the Rockland TDI Fund. Access this case study article here...