Regulatory Alerts2009-02-06
Limit on Effective Net Open Foreign-Currency Position and Unencumbered Assets for Foreign Branches
The South African Reserve Bank issued Directive 3/2009 to establish specific limits on the effective net open foreign-currency position for banks, controlling companies, and branches of foreign institutions. The directive mandates that these positions must not exceed 10 percent of net qualifying capital and reserve funds, with the Registrar retaining the authority to specify lower percentages. Additionally, branches of foreign institutions are required to maintain unencumbered assets equal to at least 60 percent of their total liabilities in the Republic to ensure adequate local economic contribution and financial stability.
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