Regulatory Alerts2018-03-31
PF Circular 84: Investment Limits in Unit Trust Schemes
The South African Financial Services Board issued Circular PF 84 to clarify investment allocation limits for self-administered pension funds investing in unit trust schemes under Regulation 28 of the Pension Funds Act. The directive permits funds to allocate up to 25 percent, 75 percent, or 95 percent of their fair asset value to single unit trusts depending on the specific regulatory item, provided that combined allocations for items 6 and 7 do not exceed 90 percent and underlying assets strictly match enumerated categories. Fund administrators must distribute this circular to their auditors and valuators to ensure compliance with these clarified asset diversification thresholds.
# FINANCIAL SERVICES BOARD
446 Rigel Avenue South Erasmusrand 0181 P O Box 35655 Menlopark Pretoria RSA 0102
Tel (012) 347-0660 Int +27-12-3470660 Fax (012) 347-0221
Enquiries:
Our ref: 12/12
Date: March 1994
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## CIRCULAR PF NO. 84
(To all self-administered pension funds)
# PENSION FUNDS ACT, 1956 : INVESTMENT IN UNIT TRUST SCHEMES
In order to remove any uncertainty regarding the extent to which a pension fund may invest in the units of a unit trust scheme registered under the Unit Trust Control Act (Act 54 of 1981) and remain within the provisions of regulation 28, the following directions are given:
### 1. Item 6 of column 1 of the Annexure to Regulation 28
A fund may invest up to 25% of the aggregate of the fair value of its assets in the units of a single unit trust scheme, as defined under this item provided that the aggregate of the fair value of the assets so invested in the categories or kinds of assets mentioned under this item, shall not exceed 25% of the aggregate fair value of the funds total assets.
### 2. Item 7 in column 1 of the Annexure to Regulation 28
A fund may invest up to 75% of the aggregate of the fair value if its assets in the units of a single unit trust scheme, as defined in this item and provided that the aggregate of the fair value of the assets invested in the categories or kinds of assets mentioned under this item, shall not exceed 75% of the aggregate fair value of the assets of the fund:
The aggregate value of the investments referred to in items 6 and 7 shall, expressed as a percentage, not exceed 90% of the aggregate fair value of the assets of the fund.
Board Members: Dr C J de Swardt (Chairman) W J Hastam K Nilsson
P J Badenhorst (Executive Officer)
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### 3. Item 9(e) in Column 1 of the Annexure to Regulation 28
A fund may invest up to 95% of the fair value of its assets in the units of such a unit trust scheme on condition that the underlying assets consist only of assets enumerated in item 9(e) in column 1 of the Annexure to regulation 28.
### 4. Kindly hand a copy of this Circular to the fund’s auditor and valuator (where applicable).
*Signature*
**REGISTRAR OF PENSION FUNDS**
(Circular PF No.83 was addressed to self-administered pension funds and insurers who underwrite pension funds)
(Afrikaans agterop)
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