The Johannesburg Stock Exchange (JSE) is pleased to announce that the Financial Sector Conduct Authority (FSCA) has approved amendments to the JSE Listings Requirements that will pave the way for issuers to list and trade Actively Managed ETFs (AMETFs) for the first time.
These amendments, which will come into effect on 14 October 2022, are the most significant recent regulatory changes to the local Exchange Traded Funds (ETF) industry since the South African Reserve Bank (SARB) issued an Exchange Control Circular in February 2017. The changes allowed locally registered Collective Investment Scheme (CIS) management companies to list ETFs which related to offshore assets on South African securities exchanges. It allowed these funds unlimited investment in offshore assets, subject to the restrictions on their offshore portfolio allowances.
AMETFs are funds that are traded on the market whereby the investment manager uses an actively managed investment strategy to produce a return for the investor rather than utilising a passive investment strategy.
Valdene Reddy, the Director of Capital Markets at the JSE, says the new listing amendments are part of JSE’s ongoing efforts to align its operations with international benchmarks and to make the bourse more efficient, fair and transparent for both issuers and investors.
“The addition of AMETFs to our already expansive product offering will enable the JSE to attract more issuers to list new instruments. In addition, AMETFs will provide South African investors with an opportunity to further diversify their portfolios in a cost-effective manner,” explains Reddy.
Actively managed ETFs have seen strong growth globally, growing assets under management by 7.1% year-to-date to $474 billion in 2022 from $442 billion at the end of 2021.
The impending introduction of AMETFs in South Africa comes after extensive consultation between the JSE, FSCA, and market participants given the global ETF market’s evolution and the local industry’s desire to align with global best practices.
The JSE has attracted several ETF listings this year, confirming its status as the leading exchange for capital raising on the continent. The JSE currently has 93 ETF listings with a total market capitalisation exceeding R114 billion.
