South Africa has proposed a sweeping overhaul of its decades-old ​rules governing money flows, aiming to bolster its position as a financial hub for Africa and attract more ‌investor capital.ContentsDOMICILE FOR NON-RAND FUNDSBRINGING ⁠CRYPTO INTO THE FOLD The finance ministry’s proposals include raising discretionary offshore allowances for individuals, regulating crypto assets and easing capital-flow restrictions. The Johannesburg Stock Exchange estimates the changes could attract at least 10 trillion rand ($608 billion) in investment over time. Much of the legislation being overhauled dates back to 1961, with ​some provisions originating as early as 1933, Vukile Davidson, deputy director-general of financial policy at National Treasury, told ​Reuters in an interview. “At the time, exchange control was principally used to deal with a wide ⁠range of issues beyond just capital flows management,” said Davidson. “It was used to manage the domestic revenue base, to manage ​illicit flows, to ensure the stability of the financial sector.” READ ALSO UNCTAD, Singapore Port Authority Forge Partnership to Drive Greener Global Shipping Delta, Amazon Partner To Deliver Next Generation In Flight Connectivity Tim Cook To Assume Executive Chairman Position As Apple Appoints New CEO That blunt instrument is now being replaced with more targeted reforms, he ​said, signalling South Africa’s readiness to modernise and adopt a “positive bias” approach to managing cross-border capital flows. National Treasury published the draft circular for public comment on April 17. DOMICILE FOR NON-RAND FUNDS A key aim of the overhaul is to address long-standing structural problems that have seen South Africa lose ​financial capital to rival hubs. Under the proposals, asset managers would for the first time be allowed to run non-rand funds – ​which raise, deploy and report in foreign currencies such as U.S. dollars – from a South African base. Current rules require such funds to ‌be ⁠legally domiciled offshore, even when they are managed locally. “Places like Mauritius, increasingly Kenya and Kigali, and Dubai … have been much more successful in attracting South African financial firms,” Davidson said. Samuel Mokorosi, head of deals and origination at the JSE, said rules requiring non-rand funds to be domiciled offshore were costing South Africa jobs and expertise. The bourse, which leads Operation Phumelela – a private-sector reform ​initiative pushing for capital markets ​reform – welcomed the proposed change. BRINGING ⁠CRYPTO INTO THE FOLD The overhaul would also bring crypto assets formally into the exchange control framework, treating them for the first time as a distinct but regulated form of capital. Crypto trading ​above a set threshold would be permitted only through a new class of regulated intermediaries, ​with mandatory declaration ⁠of holdings and significant transactions to National Treasury. Crypto plays a growing but contested role in South Africa, where high adoption has made it a tool for trading, remittances and, increasingly, cross-border value transfer outside the traditional banking system. The exchange control revamp forms part ⁠of a ​broader reform agenda pursued by the government in recent years, spanning energy, ​logistics, infrastructure, fiscal policy and financial regulation. Davidson said the timing and pace of the changes were also influenced by geopolitical shifts that are creating opportunities for ​South Africa to attract capital flows. Share this: Share on X (Opens in new window) X Share on Facebook (Opens in new window) Facebook Like this:Like Loading... Related