The South African Reserve Bank (SARB) opened a consultation Oct. 21 on proposed rules that would let qualifying institutions manage foreign portfolios locally, aiming to attract investment management activity to South Africa.
Under the proposed Synthetic Financial Centre, approved firms could oversee qualifying overseas portfolios from South Africa and carry out associated investment activity in foreign currencies. Resident investors’ foreign exposure would remain subject to their applicable limits or allowances. Nonresidents could invest through the framework without restriction.
Individuals would still have to use their existing foreign investment allowances. The framework would be a regulatory arrangement rather than a physical district or a separate legal jurisdiction. Firms would need the required licenses and registration with SARB’s Financial Surveillance Department. They would also have to keep assets and transactions handled under the framework separate from their other business.
National Treasury’s 2026 budget review proposed broadening the HoldCo concept to investment managers. SARB’s proposal builds on earlier corporate arrangements but sets out a separate framework for qualifying investment institutions. An existing HoldCo or Domestic Treasury Management Company approval would not itself authorize a firm to participate.
Treasury wants to attract more foreign-asset management work to South Africa and strengthen the country’s role in investment flows into Africa. Operation Phumelela, a financial sector task force, welcomed the budget proposal in a Feb. 25 statement. Citing competition from offshore financial centers, it said moving work now handled abroad to South Africa could create jobs and tax revenue.
SARB said a possible second phase could consider allowing South African markets to issue and trade shares and debt in foreign currencies. That step would require further review and consultation, and no date has been set for it. Comments on the current draft are due Nov. 30, 2026. SARB plans to review the responses and revise the proposal where necessary.
