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Mini budget

Proposals will drive foreign investment

Tue, 25 Oct 2011 15:28

In the Medium Term Budget Statement released today, the Minister of Finance Pravin Gordhan outlined a proposal in which all inward listed shares on the JSE be classified as “domestic” for the purposes of trading on the exchange and be included in its indices.

The proposal follows public comments received after the release earlier this year of the National Treasury’s discussion document titled “Prudential regulation of foreign exposure for institutional investors”.

The Medium Term Budget Statement said while details would be provided by the JSE, prudential institutions would still be required to report their foreign exposures to the regulatory authorities, subject to regulatory criteria.

“This proposal is intended to enhance the ability of the JSE to attract new listings and boost investments into Africa,” said the statement, adding that more work was in progress to modernise the foreign direct investment framework.

Another proposal is to improve access and competition in cross-border money remittances by removing ownership restrictions on international participation in foreign exchange bureaus.

The proposal is to also do away with the requirement for money remitters to partner with authorised dealers.

“Remitters will be regulated as standalone entities, subject to reporting and regulatory requirements,” said the statement, pointing out that these changes aim to reduce the cost of cross-border remittances, particularly to other African countries.

Added to this the National Treasury also proposes to amend the cross-border thresholds to reduce red tape, simplify payments mechanisms and eliminate bias between residents and non-residents.

The Reserve Bank is expected to publish details on these proposals as well as those of other administrative reforms. – Buanews