1. REGULATORY CONSULTING TO RETIREMENT FUNDS 2016
Re
Regulatory
Consulting to
Retirement
Funds
MAKING SENSE OF REGULATORY COMPLIANCE REPORTING SOUTH AFRICA
Retirement funds and their Boards of
Trustees have been tasked with the
mammoth exercise of implementing
Regulation 28 of the Pension Funds Act,
1956 (as amended).
What has been achieved?
The most important development to
date has been the adoption of
Regulation 28 Schedule IB, which is a
basic confirmation of underlying
investments within prescribed limits.
Most Trustees, consultants and
administrators are aware of these
reporting requirements and have been
providing regular reports.
So what is the problem?
The following principles of Regulation 28
are mostly ignored due to lack of
information and systems:
1. Member level reporting
2. Daily Breach reporting
3. Accuracy of reports
4. Derivative exposures
5. Instrument Classifications
6. Non-Compliance reports
7. Look-through reporting
8. Schedule IA Reports
9. Comprehensive risk reports
10. Stress Testing exposures
11. ESG Reporting at asset level
12. Asset Liability Testing
13. Credit rating verification
14. Promotion of BBBEE suppliers
15. Trustee Education in Reg28
16. Mandate compliance reports
17. Investment Policy Statement
compliance reports
18. Qualified Audits – Reg28
19. Member communication
20.Infrastructure communication
Regulation 28 encompasses all of the
above requirements to ensure
transparency and good governance.
Despite the best of intentions, Trustees
and their appointed agents do not have
all the skills, systems and data to
produce accurate reporting to ensure
complete compliance with the
regulation.
Regulation 28 is law
Although the Financial Services Board (FSB)
has not strictly enforced the regulations, the
lack of penalties and fines should not be the
reason for not ensuring compliance.
Increased transparency
Having a greater understanding of the
retirement fund composition allows Trustees
to make informed decisions and reduce risk.
Regulatory Consulting

2. The aim of the consulting process is
to determine the extent to which the
retirement fund complies with the
regulation and to provide assistance
in achieving full compliance. In order
to provide a comprehensive
assessment, GIR will employ a multi-
focused approach that will enable a
dashboard review of the fund’s
rating against regulatory compliance
elements. The report, together with
supporting information from GIR, can
then be used by the Trustees and
fund consultants to maintain
supervisory control of the fund’s
compliance with the regulations.
As part of our consulting service, GIR
will provide comprehensive daily,
monthly, quarterly and annual
reports including Regulation 28 (fund
and member level compliance),
quarterly SARB D427, Investment
Policy Statement (IPS) and Mandate
compliance, ESG assessments, BBBEE
review of service providers,
independent review of credit ratings
and Trustee training on regulatory
changes.
GIR has created a consulting solution
to assist retirement fund Trustees,
consultants, administrators and
auditors to assess the level of
compliance with the regulatory
requirements whilst managing the
progression to achieve an overall
compliant status.
Assessment of current regulatory
reporting processes and procedures
including systems, source data,
accuracy and transparency of reports
Establish the retirement fund
regulatory compliance objectives
Implement regulatory reporting and
monitoring frameworks to achieve
regulatory objectives
Build fund specific Investment Policy
Statement (IPS) and mandate
compliance monitoring
Daily, fund and investment channel
level Regulation 28 breach
management and reporting
Develop a projected roadmap and
timeline to achieve compliance goals
Provide regulatory guidance on
investment product strategy to
ensure consistency between
regulation and investment funds
Generate compliance management
reports for periodic review and
assessment of regulatory objectives
Fund and channel level risk
management and stress testing of
current portfolios
Provide member level communication
of their retirement fund investments
into infrastructure projects that has
created jobs, built houses with
electricity and running water, created
renewable energy projects, built
community shopping centres and
other contribution statistics to
highlight their impact on South Africa
and its development.
FAST FACTS - GLOBAL INV REPORTING
R300bnAssets under Regulatory reporting
250 000Regulatory reports per quarter
1200 CIS FUNDS
Instrument data for over 90% of SA CIS funds.
200 SEG FUNDS
Segregated retirement fund portfolio
300 Mutual Funds
International fund data
AROUND TOWN
FOR MORE INFORMATION
T (010) 595 1010
E Lchetty@girsa.co.za
W www. girsa.co.za
A 1st Floor Block B
Hurlingham Office Park
Sandton
Johannesburg
Global Investment Reporting is an
authorised financial services provider.
FSP No. 45482
Consulting
Objectives
Reporting
Framework