CAPE TOWN, Feb 17 (Reuters) – South Africa will implement financial regulatory reforms in line with G-20 recommendations, including better management of foreign risk exposure of banks and institutional investors, the National Treasury said on Wednesday.
“As of March 2010, South African banks will be able to acquire direct and indirect foreign exposure of up to 25 percent of their total liabilities (excluding equity), covering all foreign exposure but excluding FDI (foreign direct investment).
“The initial limit of 40 percent has been adjusted downwards in light of recent international developments,” the Treasury said in its 2010 Budget Review.
It said research was underway to complete the move from rules-based to principles-based regulation of foreign exposure for institutional investors and to finalise the definition of ‘foreign asset’ that captures the underlying risks.
The Treasury said it would consult on these matters during 2010. The existing inward listing policy and definition of foreign assets for companies remained in place for now.