Regulatory Alerts2020-06-30
Conduct Standard for Smoothed Bonus Policies in Default Investment Portfolios
The Financial Sector Conduct Authority has published a consultation report finalizing conditions that smoothed bonus policies must satisfy to qualify as default investment portfolios under South African pension regulations. The standard mandates operational transparency through a capped two percent annual bonus rate, a twenty-four-month spreading period for excess reserves, and strict compliance with Regulation 28 asset allocation limits. Following extensive industry feedback, the Authority incorporated a nine-month transitional period and clarified disclosure requirements for fees, guarantees, and strategic asset changes to ensure fair policyholder treatment.
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