Finance Minister Enoch Godongwana says that the National Treasury is “evaluating” the impact of reforms introduced in 2022, which allowed South Africans and local funds to invest more money offshore., where he conceded that increasing this limit to 45% was a mistake, and there are major disagreements in the Treasury itself about the decision.
The purpose of Regulation 28 is to protect investors against poorly diversified investment portfolios and exposure to risky assets bythe amount funds can invest in local infrastructure , which asset classes are verboten , and how much money funds can invest offshore . “The reforms were aligned with the Organisation for Economic Co‐operation and Development best practice Code of Liberalisation of Capital Movements,” he said.
This was also the view of various local fund managers, who said that the regulation change made life more difficult for them, and that they could have been introduced more gradually.