# summary

- Link: https://dearsouthafrica.co.za/reg28/summary/
- Published: 2021-03-07T19:38:20+02:00
- Author: dearSA

[ Have your say on the Draft Amendments to Regulation 28](https://dearsouthafrica.co.za/reg28/)

### DOWNLOAD DOCUMENTS

 * [Draft Regulation 28 – Gazette](https://cdn.dearsouthafrica.co.za/wp-content/uploads/2021/03/20190739/2021030401-Draft-Regulation-28-Gazette-2021-For-Comments.pdf)
 * [National Treasury media statement 1](https://cdn.dearsouthafrica.co.za/wp-content/uploads/2021/03/20190738/2021030401-Media-Statement-Draft-Gazette-Regulation28-Amendmentss.pdf)
 * [National Treasury media statement 2](https://cdn.dearsouthafrica.co.za/wp-content/uploads/2021/03/20190738/2021030401-Media-Statement-Draft-Gazette-Regulation28-Amendmentss.pdf)

### DETAILS

**Recognition of infrastructure investment**_
 
The amendments to Regulation 28 
provide government’s response to calls for retirement fund investment in infrastructure
to bridge the infrastructure gap. The decision to invest in any asset class, including
infrastructure, remains that of the board of trustees of retirement funds. The draft
notice on amendments to Regulation 28:

    - Provides specific reference to investment in infrastructure through various
      asset classes already permitted through the Regulation and introduces an aggregate
      limit for infrastructure;
    - Inserts two new columns in Table 1 of Regulation 28 with limits applicable
      to infrastructure investments. Investment in infrastructure will be recognised
      within the various underlying asset categories specified in Regulation 28.
      This will also enable better and more accurate data for this form of investment;
    - Proposes that the overall investment in infrastructure across all asset categories,
      may not exceed 45% in respect of domestic exposure and an additional limit
      of 10% in respect of the rest of Africa; and
    - Limit aggregate exposure per issuer or entity to 25% of the total assets of
      the fund.

**Amendments to definitions**
 A definition of infrastructure is also added to clearly
specify and guide the meaning of the term used in the Regulation. Unrelated to the
infrastructure topic is an amendment to the definition of hedge fund. The proposed
amendment to the definition of hedge fund follows the Declaration of hedge fund 
business as a collective investment scheme in terms of Government Notice 38503 of
25 February 2015.

**Delinking of Item 8 in Table 1**
 To further enhance the financing of infrastructure,
the asset category related to “Hedge funds, private equity funds and other assets
not referred to in this schedule” is being delinked. This amendment would make private
equity an asset class on its own with its own specific limit. A number of studies
document the attraction of investment in private equity and infrastructure projects.
These studies find that private equity investments in infrastructure projects have
a positive impact and help in sharing project risk between the project sponsors.
It is for this reason that the asset category for private equity, hedge fund and
other assets in Regulation 28 is being delinked, with the limit applicable to private
equity being increased.

Currently, “Hedge funds, private equity funds and other assets not referred to in
this schedule” is a single asset class with a collective limit of 15%. Private equity
on its own has a limit of 10%; hedge funds also 10% and other assets not referred
to in this schedule is 2.5%. After delinking the asset class group, the limit for
private equity is proposed to be increased to 15%. Hedge funds and other assets 
not referred to in this schedule would remain unchanged at 10% and 2.5%, respectively.
The overall or collective limit is being removed.

**New principle Sub- regulation 28(2)(c)(x)**
 This sub-regulation is inserted to
ensure that retirement funds pay attention to due diligence in all investments including
for infrastructure investments.

**Sub-regulation 28(8)(a)**
 The sub-regulation on reporting and exclusions is also
being amended to remove the exemption on reporting of investments held by long-term
insurer and collective investment schemes on behalf of retirement funds, which investment
may include infrastructure investments.

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### IN THE MEDIA

 * Businesstech – [The projects your retirement money could help fund in South Africa](https://businesstech.co.za/news/finance/473954/the-projects-your-retirement-money-could-help-fund-in-south-africa/)
 * Moneyweb – [Changes to Regulation 28 expansive rather than restrictive](https://www.moneyweb.co.za/investing/changes-to-regulation-28-expansive-rather-than-restrictive/)
 * Moneyweb [listen] – [How the proposed amendments to Reg 28 will affect your retirement](https://www.moneyweb.co.za/moneyweb-radio/safm-market-update/how-the-proposed-amendments-to-regulation-28-will-affect-your-retirement/)
 * Moneyweb – [SA proposes Regulation 28 changes](https://www.moneyweb.co.za/mymoney/retirement/sa-proposes-regulation-28-changes/)