TUESDAY, 12.30PM
THE Financial Services Board is motivating for regulation of foreign-based investment products being offered to South Africans, in an attempt to protect local investors following the lifting of exchange control regulations.
Rob Barrow, the FSB’s deputy executive officer said that foreign-registered unit trusts are not regulated in SA, so much so that it is not known how many of them are available. He said the FSB hopes that legislation will soon be passed to remedy the situation.
Barrow said registration of foreign investment products will ensure they adhere to advertising standards and explain structural differences between foreign and local unit trusts, such as cashing-in rules. He said the FSB wants investors to be fully informed and to ensure it has “some form of ability to supervise”.
There are serious concerns in the industry that SA investors are open to exploitation through their lack of understanding of foreign products.