South Africa’s plan to bring as much as R10-trillion in offshore assets back under domestic management has moved a step closer to operation. The South African Reserve Bank has issued a draft exchange control circular setting out how a synthetic financial centre would work in practice. The reform, championed by the JSE and the Treasury, would allow licensed institutions to run funds and management companies in foreign currencies from within the country’s borders, opening a route to repatriate asset management activity currently based in offshore centres.
The circular, published on Wednesday by the Bank as custodian of the country’s exchange controls, indicates that licensed private equity fund managers may also qualify for the dispensation, alongside the institutions originally contemplated. Foreign financial services providers, it confirms, may apply to the Bank’s financial surveillance department to participate in the synthetic financial centre, extending the potential operating base beyond domestic firms.
Under the proposal, approved participants would be able to manage qualifying foreign assets or foreign currency exposures, administer or service an approved foreign investment mandate, acquire, hold, manage or trade qualifying SFC instruments, undertake qualifying foreign currency financing, and centralise approved management, administration or servicing functions. In practical terms, South Africa would allow local fund managers to administer and trade nonrand-denominated products, such as global equities, emerging market debt and offshore funds, without needing to establish management companies abroad.
One operational detail matters more than most. South African assets or exposures held in an SFC portfolio would retain their domestic status for exchange control, prudential, regulatory and reporting purposes. That provision is central to whether the framework can function smoothly once institutions begin moving mandates back onshore.
The Bank framed the first phase of the reform as enabling approved institutions to manage qualifying foreign portfolios and related foreign currency investment activities from South Africa, with future phases to consider additional measures supporting a competitive international financial centre. It said the reform is expected to deepen financial markets, enhance the competitiveness of the financial sector, attract investment management activity to South Africa, support skills depth and strengthen the country’s role as a gateway for investment into Africa.
What the design avoids is a physical financial centre. Instead, the vision is a digital-first, regulation-enabled framework allowing South African institutions to manage international funds, foreign currency assets and global mandates from within the country. The SFC will be linked to the JSE and is expected to help reverse the long-term leakage of investment activity offshore through targeted repatriation, rather than enforced capital controls.
JSE CEO Valdene Reddy, who chairs Operation Phumelela, the private sector initiative behind the push to position South Africa as a competitive regional financial services hub, said the country has the skills, institutions and financial infrastructure to compete globally, and that the SFC provides the regulatory means to put those strengths to work. “This is about winning international business, attracting investment mandates and building a financial sector that contributes more to economic growth. We developed the SFC because South Africa should be competing for this business, not watching it move elsewhere,” Reddy said.
Daniel Mminele, Nedbank chair and a member of the Operation Phumelela steering committee, described the reform as an opportunity to convert South Africa’s financial capabilities into tangible economic gains. “We have a sophisticated financial system. The challenge is to translate that strength into investment, exports and jobs. The SFC creates an opportunity to attract international financial business to South Africa, generating employment, growing professional services and strengthening our economy,” Mminele said.
The draft circular is the latest marker in a reform process that Business Day has tracked in detail; further background is available at https://www.businessday.co.za/markets/2026-10-22-reserve-bank-paves-way-for-up-to-r10-trillion-offshore-assets-to-be-managed-from-sa/. With the Bank now setting out the operational mechanics, attention turns to how institutions take up the dispensation, which mandates qualify, and whether the framework can deliver the repatriation of offshore activity that its backers have promised.