Regulatory Alerts2024-04-02
FSCA Prudential Standard 1 of 2024 on Regulation 28 Quarterly Reporting Requirements for Pension Funds
The Financial Sector Conduct Authority published Prudential Standard 1 of 2024 to align pension fund quarterly reporting requirements with the July 2022 amendments to Regulation 28 asset spreading rules. The standard establishes high-level reporting obligations for non-compliance while granting the Authority flexibility to specify reporting formats through a separate notice. It comes into operation immediately upon publication on 2 April 2024, ensuring continued protection of retirement fund member savings through accurate and timely regulatory disclosures.
FSCA COMMUNICATION 12 OF 2024 (RF) Publication of FSCA Prudential Standard 1 of 2024: Regulation 28 Quarterly Reporting Requirements for Pension Funds
- PURPOSE The purpose of this Communication is to inform stakeholders that, today, the Financial Sector Conduct Authority (FSCA) published the following documents: 1.1 FSCA Prudential Standard 1 of 2024: Regulation 28 Quarterly Reporting Requirements for Pension Funds (Prudential Standard); 1.2 Statement supporting the Prudential Standard; 1.3 FSCA RF Notice 8 of 2024: Determination of Format and Manner of Regulation 28 Quarterly Reports; and 1.4 Consultation Report.
- SUMMARY 2.1 Regulation 28 protects retirement fund member savings by limiting the extent to which funds may invest in a particular asset or asset classes and requires funds to report instances of non-compliance with Regulation 28 on a quarterly basis. 2.2 In July 2022, the asset spreading requirements in Regulation 28 were amended, which amendments came into effect on 3 January 2023 and necessitated the urgent revision of the quarterly reporting requirements for pension funds to ensure alignment with the amendments. The Prudential Standard aligns the reporting requirements with the amendments. 2.3 To ensure more flexibility the Prudential Standard itself only includes a highlevel reporting requirement pertaining to reporting non-compliance with or breaches in terms of Regulation 28, and further states that the FSCA may determine the manner and format of reporting. For that purpose, the FSCA published FSCA RF Notice 8 of 2024. 2.4 The process for making regulatory instruments is prescribed in Chapter 7 of the Financial Sector Regulation Act, 2017 (Act No. 9 of 2017). The said process has now been concluded, and the FSCA therefore published the final Prudential Standard. The Prudential Standard comes into operation on date of publication.
2 3. ENQUIRIES 3.1 The documents referred to in paragraph 1 are available on the FSCA’s website at www.fsca.co.za. 3.2 For more information regarding draft Prudential Standard, and/or this Communication please contact the Regulatory Framework Department of the Authority at Marianne.Vanrooyen@fsca.co.za or Andile.Mjadu@fsca.co.za. UNATHI KAMLANA COMMISSIONER FINANCIAL SECTOR CONDUCT AUTHORITY Date of publication: 2 April 2024