Currency and Exchanges Manual for Authorised Dealers

256 (Travel services for residents – holiday travel). (dd) Exemption from Regulations 2(5) and 6(1) is, however, granted to business travellers going abroad on recurring business trips. Where the next business trip is to occur within 90 days from returning from a previous business trip, any unutilised foreign currency may be retained by the traveller for use during the next business trip. (x) Provision of foreign currency facilities (a) Except for business travel and land arrangements, a prospective traveller may not be furnished with foreign currency more than 60 days prior to the date of departure. (b) Prior to making such foreign currency available, Authorised Dealers must record on their integrated forms the following information: (aa) the mode of transport, the reference number issued, the date of departure as well as the destination, where a passenger ticket is issued; and (bb) the mode of transport, the date of departure, the destination as well as the name of the border post from where the traveller will exit South Africa, where a passenger ticket is not issued. (c) Authorised Dealers must also obtain a written undertaking from the prospective traveller that the prospective traveller: 106 of 298 9/2025 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers B.4 (aa) will indeed travel within 60 days from the date of the request to be accorded foreign currency; (bb) will not purchase foreign currency from an Authorised Dealer in excess of the applicable limits; (cc) will offer for resale all foreign currency accorded in the event of the trip being cancelled, to an Authorised Dealer and/or ADLA within 30 days of cancellation; and will offer for resale to an Authorised Dealer and/or ADLA any unused foreign currency within 30 days of their return to South Africa. Also see (ix) above. (xi) Term of travel allowance (a) Travel allowances cover a calendar year. Any traveller who, on departure does not avail of the full travel allowance may be accorded the unused portion while abroad, provided that the overall limit is not exceeded and the allowance is availed of in the same calendar year. (b) Any traveller not availing of the maximum allowance during a first journey may utilise the unused portion of the annual allowance for a subsequent journey at any time during the same calendar year. (c) While advance payments in terms of (viii) above may, in need, be made in a preceding calendar year in respect of a journey commencing in the next calendar year, the amounts involved must be deducted from the single discretionary allowance applicable to the individual concerned in the following calendar year. (d) A person who has not utilised any part of the travel allowance for a particular calendar year and who leaves on a journey which will extend into the next calendar year may be granted the full travel allowance facilities applicable to the calendar year in which the journey commences and the fact that the journey extends into the subsequent calendar year would not debar the granting of further travel allowance facilities for a separate subsequent journey in such calendar year. Also see (xii)(d) below regarding partially utilised facilities. (e) A traveller whose visit extends from the current year into the following year may be accorded foreign currency in respect of the next year’s facilities without returning to South Africa. (xii) Unused foreign currency facilities (a) Arrangements have been concluded with international carriers in 107 of 298 6/2021 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers B.4 terms of which refunds on unutilised tickets issued in South Africa will only be made in South Africa. (b) In respect of a completely or partially unutilised passenger ticket, a refund will only be made by the carrier against production of a written statement from the Authorised Dealer concerned, confirming that all the foreign currency originally provided has been repurchased. All parties who issued the relative facilities may have to consult with one another. (c) A traveller who made advance payments, but who did not travel or who did not take up some bookings and who receives a refund, must offer the foreign currency for sale to an Authorised Dealer within 30 days. (d) To the extent that foreign currency facilities previously granted have been repurchased, Authorised Dealers may subsequently furnish the equivalent Rand amount in foreign currency to that person for further travel in the same calendar year, together with any balance which may not have been previously availed of up to the single discretionary allowance limit of R2 million per calendar year. (C) Omnibus travel facilities (i) Authorised Dealers may approve in writing applications by entities for omnibus travel facilities up to R20 million per calendar year for allocation to the entities’ representatives for business travel purposes only, at the discretion of the relevant entity. (ii) At the beginning of each calendar year, the entity should apply in writing, on the entity’s letterhead, to the Authorised Dealer for permission to avail of an omnibus travel facility. The following should be included in the letter: (a) the total amount that is applied for in the calendar year; (b) that the amount applied for is reasonable in relation to the business activities of the entity concerned; (c) the purpose that the omnibus travel facility will be used for; (d) the envisaged number of trips during the calendar year; (e) the names, surnames and identity numbers of the administrative employees that are authorised by the entity to deal with the Authorised Dealer; (f) the CIV documentation of the administrative employees that are authorised by the entity to deal with the Authorised Dealer; and 108 of 298 6/2026 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers B.4 (g) the CIV documentation of the entity. (iii) If the Authorised Dealer is satisfied that the entity has not applied for an omnibus travel facility with any other Authorised Dealer and the application letter and CIV documentation meet with the minimum requirements, a formal letter must be issued authorising the entity to avail of an omnibus travel facility of up to R20 million (for business travel, land arrangements and subsistence allowances only) during the calendar year. (iv) On each occasion during the calendar year that the representatives of the entity have to travel, the Authorised Dealer must view an official letter from the entity concerned authorising the proposed business visits to be undertaken and explaining the purpose of the proposed business trips. The Authorised Dealer must also view the passenger ticket and passport of the prospective traveller(s). (v) The Authorised Dealer must maintain a schedule of the visits undertaken by the representative(s), the amount of foreign currency accorded and subsequently resold on each occasion. (vi) The above-mentioned documentation must be retained by the Authorised Dealer for a period of five years for inspection purposes. (vii) The omnibus travel facility may only be used for business travel purposes and may not be deposited into any foreign bank account or be used to acquire goods and/or services abroad. (viii) Applications for facilities in excess of R20 million must be submitted to the Financial Surveillance Department for consideration. (ix) Representatives of entities availing of an omnibus travel facility also qualify in their personal capacity for a travel allowance within the single discretionary allowance limit of R2 million per calendar year. (D) Temporary exportation of personal effects and jewellery (i) All residents of the CMA may be required to present the prescribed SARS Customs Declaration on their departure from the CMA. In the case of any jewellery to be temporarily exported, it must be fully manufactured and not crudely produced. (ii) Should the insurance value of the goods taken by the traveller exceed R200 000, the prior written approval of the Financial Surveillance Department must be obtained. (iii) The items to be exported must be returned to South Africa within a period 109 of 298 6/2026 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers B.4 of six months. (iv) Where the items exported will not be returned to South Africa and where the insurance value thereof exceeds R50 000, an application must be submitted to the Financial Surveillance Department. (E) Temporary exportation of caravans, horse-boxes, motor/sail boats, motor vehicles and trailers (i) All residents of the CMA will be required to present the prescribed SARS Customs Declaration on their departure from the CMA. (ii) A traveller is allowed to export a caravan, horse-box, motor/sail boat, motor vehicle and/or trailer, from South Africa temporarily when visiting SADC countries provided the items will be returned to South Africa within a period of six months. (iii) Where the items exported will not be returned to South Africa and where the insurance value thereof exceeds R50 000, an application must be submitted to the Financial Surveillance Department. (F) Temporary export of ocean-going yachts, luxury vehicles and aircraft (i) Residents may be allowed to export ocean-going yachts, luxury vehicles and aircraft on a temporary basis, provided that the items will be returned to South Africa within a period of 24 months and that the insured value thereof does not exceed R10 million. An application in this regard must be lodged with an Authorised Dealer who should view the following documentation before granting the approval: (a) owner’s registration certificate; (b) insurance documents verifying the insured value; and (c) a sworn affidavit from the registered owner confirming that the item will be returned to South Africa within 24 months. (ii) All residents of the CMA may be required to present the prescribed SARS Customs Declaration on their departure from the CMA. (iii) A copy of the Authorised Dealer’s approval must be retained by the traveller for presentation to the Customs authorities, if required, when the item(s) is returned to South Africa. (iv) The Authorised Dealer concerned must also inform the applicable parties that while the item(s) may be chartered abroad, it may not be sold abroad without the prior written approval of the Financial Surveillance Department. 110 of 298 15/2025 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers B.4 (v) Authorised Dealers may accord foreign currency to the crew members and/or any passengers proceeding abroad temporarily within the single discretionary allowance limit of R2 million. (vi) No further foreign currency may be accorded to such persons without the prior written approval of the Financial Surveillance Department. (G) Residents temporarily abroad (i) Subsistence allowance (a) Residents temporarily abroad, may avail of the R2 million single discretionary allowance and the R10 million foreign capital allowance per calendar year without returning to South Africa. (b) The requirements under section B.2(B)(i) of the Authorised Dealer Manual and subsection (A) above must be adhered to. (c) Where residents temporarily abroad make use of a general or special power of attorney to facilitate such transfers, a certified copy of the applicant’s valid green barcoded identity document or Smart identity document card must accompany the power of attorney. (d) In terms of the TCS system, a TCS PIN letter will be issued to the taxpayer that will contain the tax number and TCS PIN. Authorised Dealers must use the TCS PIN to verify the taxpayer’s tax compliance status via SARS eFiling prior to effecting any transfers. Authorised Dealers must ensure that the amount to be transferred does not exceed the amount approved by SARS. Authorised Dealers should note that the TCS PIN can expire and should the Authorised Dealers find that the TCS PIN has indeed expired, then the Authorised Dealer must insist on a new TCS PIN to verify the taxpayer’s tax compliance status. Authorised Dealers should not transfer any amount if the resident’s tax compliance status indicates non-compliance. The resident should approach SARS to resolve the non-compliance issues. Also see section B.2(B)(i)(d) and/or (e) of the Authorised Dealer Manual. (e) Residents temporarily abroad may use their local debit and/or credit cards within the overall single discretionary allowance limit of R2 million per applicant during a calendar year. (f) The annual limit of the R2 million single discretionary allowance and the R10 million foreign capital allowance dispensations may not be exceeded. (g) Residents temporarily abroad may receive pension and/or compulsory annuities including living annuities as mentioned in section B.3(A)(iv) of the Authorised Dealer Manual as well as monetary gifts and loans 111 of 298 6/2026 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers B.4 as mentioned in subsection (A)(x) above. Any voluntary annuity transfers must be done in terms of (a) above. No other foreign currency except as outlined in (a) above may be availed of without the specific prior written approval of the Financial Surveillance Department. (ii) Temporary exportation of personal effects and other assets (a) Any household and personal effects, motor vehicles, caravans, trailers, motorcycles, stamps and coins (excluding coins that are legal tender in South Africa) per family unit or single person, where the insurance value does not exceed R2 million may be exported under cover of the prescribed SARS Customs Declaration. (b) Farming implements for which the insurance value does not exceed R2 million may be exported against the prescribed SARS Customs Declaration by persons proceeding into African countries for farming purposes. (H) Miscellaneous payments (i) In addition to the single discretionary allowance dispensation, Authorised Dealers may approve applications by residents (natural persons) for the transfer abroad of payments inclusive of associated costs to non- residents in respect of legitimate foreign obligations against the presentation of documentary evidence such as an invoice, court order or agreement. ---oOo--- 112 of 298 6/2026 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers B.5 B.5 Personal transfers by foreign nationals and immigrants (A) Foreign nationals (i) Foreign nationals temporarily in South Africa (a) Foreign nationals (except those who are purely on a temporary visit) are required to declare on arrival in writing to an Authorised Dealer: (aa) whether they are in possession of foreign assets. (b) On receipt of such completed declarations and undertakings, Authorised Dealers may permit such foreign nationals to: (aa) conduct their banking on a resident basis; (bb) dispose of or otherwise invest their foreign assets including foreign cash funds held by them, subsequent accruals, as well as foreign income, without interference from the Financial Surveillance Department. (cc) conduct non-resident or foreign currency accounts in the books of an Authorised Dealer; and (dd) transfer abroad funds accumulated during their stay in South Africa provided that: (1) the foreign nationals can substantiate the source from which they have acquired such funds; and (2) the value of such funds is reasonable in relation to their income generating activities in South Africa during the period. (c) The completed declarations and undertakings must be retained by Authorised Dealers, after the permanent departure of such individuals, for a period of five years for inspection purposes. (d) The dispensation in (b) above excludes: (aa) single remittance transactions up to R5 000 per transaction where only the applicant’s proof of identity has to be viewed and retained by the Authorised Dealer concerned; and (bb) transactions where a business relationship has been established, which are limited to R5 000 per transaction per day within a limit of R25 000 per applicant per calendar month. The Authorised Dealer must complete the relevant customer due diligence requirements by establishing and verifying the identity of the applicant in terms of section 21 of the FIC Act 113 of 298 7/2022 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers B.5 and obtaining the applicant’s residential address information for reporting purposes. (e) It should be noted that while the personal banking of foreign nationals temporarily resident in South Africa may be conducted on a resident basis, any interest held by such individuals in local entities (i.e. legal persons) will be deemed as non-resident for the purposes of local financial assistance. (f) Export of personal effects and other assets (aa) Any household and personal effects, including motor vehicles, may be exported under cover of the prescribed SARS Customs Declaration provided that the goods to be exported have been purchased with funds that would have been transferable or the goods have been imported into South Africa. The individual must, in need, be able to substantiate the importation thereof by the production of documentary evidence. (g) Capital transfers by foreign nationals (aa) Authorised Dealers may permit foreign nationals to retransfer abroad capital that has been introduced into South Africa, provided that they can substantiate the original introduction of such funds. (ii) Foreign crew members (a) Foreign crew members and seamen of ships calling at South African ports may be permitted to remit savings from their earnings, but under no circumstances should foreign currency be made available against local payment in Rand. (iii) Foreign visitors (a) Foreign visitors (tourists) to South Africa may only be granted foreign currency if the Authorised Dealers are satisfied that the amount being applied for, is the unspent portion of the proceeds of foreign currency introduced to and exchanged in South Africa. (b) Foreign visitors (tourists) to South Africa may introduce foreign currency in any amount and in any form (e.g. foreign bank notes, travellers cheques). (c) Foreign visitors (tourists) may export any funds originating from instruments of foreign currency (including foreign bank notes) imported into South Africa on their arrival. In addition, no more than R100 000 may be exported in South African Reserve Bank notes. 114 of 298 8/2025 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers B.5 (d) Credit and/or debit card issuers may issue such cards to foreign visitors, provided that the expenditure is settled in foreign currency or Rand from a Non-resident Rand account in the name of the non-resident and/or Rand from a vostro account held in the books of the Authorised Dealer. (B) Immigrants (i) Taking up of permanent residence in South Africa (a) On arrival in South Africa, immigrants are required to declare to an Authorised Dealer, whether they possess any foreign assets. (b) Authorised Dealers are required to furnish the Financial Surveillance Department, on a monthly basis, with a consolidated return in which the following information is reflected under the name and branch code number of each individual branch in respect of such individuals: (aa) full names of individuals, spouse and dependant(s); (bb) dates of immigration (see (c) below); and (cc) dates of birth. (c) New immigrants must in due course provide the Authorised Dealer with documentary evidence substantiating that they have been granted permanent residence in South Africa. They should be regarded as immigrants with effect from the date of their arrival in South Africa. (d) The relevant declaration and undertaking, as well as documentary evidence substantiating permanent residence must be retained by Authorised Dealers for a period of five years after the expiry of the concessionary period referred to in (ii)(b) below (i.e. for a period of ten years). (ii) Concessions to immigrants (a) Authorised Dealers should inform new immigrants who have completed the necessary declaration and undertaking that they may dispose of or otherwise invest their foreign assets, including foreign cash funds held by them, subsequent accruals, as well as foreign earned income without interference from the Financial Surveillance Department. (b) Authorised Dealers may permit immigrants who have immigrated: 115 of 298 7/2022 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers B.5 (aa) Within five years of the date of their immigration, to retransfer or re-export all own assets introduced or imported during the five year period, provided that: (1) the necessary declarations and undertakings were completed on their arrival in South Africa as outlined in (i)(a) above; and (2) they can substantiate the original introduction or importation of such assets. (bb) Within five years of the date of their immigration, to transfer abroad their South African assets in excess of those referred to in (aa) above, provided that: (1) the Authorised Dealer concerned is satisfied that the individuals will be leaving South Africa permanently; and (2) the Authorised Dealer is satisfied that the assets to be transferred are reasonable in relation to the growth resulting from such individual’s business or employment activities and/or is market related. (cc) After five years of date of their immigration, Authorised Dealers may permit such immigrants to retransfer or re-export all own assets introduced or imported, provided that: (1) the necessary declarations and undertakings were completed on the arrival in South Africa; and (2) they can substantiate the original introduction or importation of such assets. (dd) Any household and personal effects, including motor vehicles, may be exported under cover of the prescribed SARS Customs Declaration provided that the goods to be exported have been purchased with funds that would have been transferable and/or have been imported into South Africa. The individual must, in need, be able to substantiate the importation thereof by the production of documentary evidence. (iii) Payments by immigrants (a) Applications by immigrants may be approved by Authorised Dealers for the provision of foreign currency to cover current and arrear premiums due on foreign currency life insurance policies or contributions to pension and medical aid funds, provided that: 116 of 298 6/2021 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers B.5 (aa) the necessary declaration and undertaking were completed; and (bb) documentary evidence is presented, verifying the amounts due and that the commitment was entered into before the applicants took up residence in South Africa. (b) Immigrants may against the presentation to an Authorised Dealer of documentary evidence confirming the amount involved repay loans received in their previous country of domicile. (c) Immigrants may settle foreign tax commitments from South Africa against the production of documentary evidence confirming the amount involved. ---oOo--- 117 of 298 6/2021 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers B.6 B.6 Embassies, high commissions, legations, consulates and official overseas representatives (A) Embassies, high commissions, legations and consulates (i) Embassies, high commissions, legations and consulates may conduct their banking on a resident basis. (ii) Foreign currency for the transfer of official funds may be provided freely where the Authorised Dealer concerned is satisfied that the transaction is in the normal course of their business. (B) Official overseas representatives (i) Official foreign representatives should, for purposes of this section, be interpreted to include foreign diplomatic and trade representatives, as well as members of their staff. (ii) The facilities outlined in (iii) and (iv) below should not be extended to South African nationals employed by, or as, official overseas representatives, but should be confined to those persons transferred to South Africa on a tour of duty. (iii) While it is not intended to grant such persons any general exemption from the provisions of the Regulations, they may be permitted to retransfer funds introduced from abroad. (iv) The export of personal and household goods and vehicles brought into the CMA by the official foreign representatives or purchased by them while in the CMA with funds introduced from abroad, is permissible under cover of the prescribed SARS Customs Declaration. ---oOo--- 118 of 298 6/2021 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers B.7 B.7 Transfers to charitable, religious or educational bodies and to missionaries (A) Charitable, religious or educational bodies (i) Applications by charitable, religious or educational bodies registered as a Non-Profit Organisation under the Non-Profit Act, 1997 (Act No. 71 of 1997) with the Non-Profit Organisation Directorate of Social Development for the transfer of funds to such bodies in countries outside the CMA should be submitted to the Financial Surveillance Department with full particulars, unless Authorised Dealers have received special authority to approve, without further reference to the Financial Surveillance Department, applications made by specific organisations. (B) Missionaries (i) Authorised Dealers may allow religious bodies to transfer up to R20 000 per calendar year per beneficiary to missionaries, provided that a letter from a local registered religious body is viewed confirming that the person is a missionary abroad. ---oOo--- 119 of 298 6/2021 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers B.8 B.8 Shipping companies, airline companies and travel agents (A) General (i) Shipping and airline companies, travel agents and tour operators may not without the permission of the Financial Surveillance Department engage in any foreign exchange transactions, except as provided for in (ii) and (iii) below. (ii) Travel agents and tour operators, may effect transfers abroad on the basis indicated in subsection (C) below. (iii) Shipping or airline companies may only effect bulk transfers abroad on the basis outlined in subsection (D) below. (B) Sale of passenger tickets in the Republic of South Africa (i) Except as provided for in (iii) below, no passenger ticket may be issued locally against payment in Rand for utilisation by a traveller whose journey does not commence from the CMA. (ii) Journeys by non-residents (a) Travel agents and tour operators may accept payment in foreign currency (either by foreign credit card or foreign currency payments to their bank account) by visitors to South Africa for passenger tickets for journeys from South Africa. (b) Where payment is to be effected in Rand by such visitors, travel agents and tour operators must view documentary evidence that the relative funds represent the proceeds of foreign currency introduced into and exchanged in South Africa. (c) Where a resident wishes to pay for the cost of a passenger ticket for a single or return journey commencing outside the CMA to the CMA, payment for such ticket may either be transferred directly to a foreign travel agent or to an overseas airline company. Alternatively, the ticket may be issued and paid for in Rand in South Africa or the ticket may be issued abroad against a prepaid ticket advice paid for in Rand. (d) No payment may be accepted to cover the cost of the fare of a non- resident for travel between destinations outside South Africa without the specific prior written approval of the Financial Surveillance Department, unless payment is made in foreign currency or Rand from a Non-resident Rand account in the name of the non-resident and/or Rand from a vostro account held in the books of the Authorised Dealer. 120 of 298 6/2021 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers B.8 (e) Alternatively, travel agents and tour operators may arrange that passenger tickets be purchased via the Internet. (iii) Sale of passenger tickets where travel agents and tour operators sell journeys to their clients for travel between destinations outside South Africa (a) Travel agents and tour operators may accept payment in Rand to cover the cost of passenger tickets for travel between destinations outside South Africa in order to accommodate the following: (aa) corporate clients and/or contractors who may need to second foreign based personnel, or outsourced persons, to fulfil contractual obligations; (bb) local clients with a global presence who wish to attend conferences and/or training; (cc) travel arranged by non-governmental organisations; and (dd) leisure bookings by travel agents via the Internet. (b) The passenger ticket may be issued and paid for in Rand in South Africa or the passenger ticket may be issued abroad against a prepaid ticket advice paid for in Rand. (c) Alternatively, travel agents and tour operators may arrange that passenger tickets be purchased via the Internet. (C) Foreign exchange disbursements on behalf of travellers (i) Advance payments and/or payments in full (a) Travel agents and tour operators who wish to effect advance payments or payments in full in respect of independent or package tours offered to the public must produce documentary evidence in the form of an invoice or pro forma invoice from the foreign payee confirming the amount payable. (b) For purposes of this subsection, as well as (ii) below, a facsimile copy of an overseas invoice plus a covering invoice issued by a local travel agents and tour operators may be accepted when remitting funds abroad. The invoice issued by the local travel agents and tour operators must contain the name and residential address of the traveller, as well as the foreign currency and/or Rand amount. (ii) Subsequent payments (a) Subsequent payments by agents to cover any portion or the balance of a tour not transferred in (i) above may be permitted, 121 of 298 6/2026 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers B.8 provided that documentary evidence in the form of an invoice or pro forma invoice from the foreign payee confirming the amount payable, is exhibited. (b) Travel agents and tour operators must, at the time of selling a tour to an individual, in respect of advance payments, payments in full and/or subsequent payments, obtain a written declaration from the party concerned to the effect that such party is fully conversant with the conditions pertaining to the issue of a travel allowance and is aware that the cost of any land arrangements paid for locally and/or abroad is deductible from the travel allowance that forms part of the single discretionary allowance limit of R2 million per calendar year. (iii) Cancellation fees (a) In respect of cancellation fees due to foreign payees, Authorised Dealers may effect such payments, against the production of documentary evidence. (iv) Refunds in respect of unutilised bookings (a) Where payments for bookings abroad have been effected on behalf of a traveller who does not travel or does not utilise the bookings made and a refund is obtained, such reimbursement received by the agent from abroad must be retransferred to South Africa within 30 days. (v) Incentive tours (a) Travel agents and tour operators may effect payments, including advance payments, in respect of package tours offered by firms or companies to employees as part of an incentive scheme against the production of documentary evidence, as well as an official letter from the firm or company concerned. (D) Bulk transfers by shipping and airline companies (i) The local offices of foreign shipping and airline companies may be allowed to transfer surplus funds abroad periodically against submission to Authorised Dealers of supporting statements giving details of freight and passenger fare collections, less local disbursements in respect of their vessels or aircraft and administrative expenditure. (ii) Authorised Dealers must, on an annual basis, call for an auditor’s certificate confirming the items enumerated on the statements. ---oOo--- 122 of 298 6/2026 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers B.9 B.9 Freight payments and ships disbursements (A) Inward freight payable in foreign currencies (i) Foreign currency payments for imports into South Africa may be effected on any shipment and/or delivery term where the freight is included in the cost of the goods being imported. (ii) Authorised Dealers may authorise payments in respect of freight on imports into South Africa on a Free on Board basis against documentary evidence of the commitment and confirmation that the relative goods have been or are to be imported on a Free on Board basis. (B) Inward freight payable in Rand to non-South African shipping and airline companies (i) Local agents and branches of non-South African carriers may accept Rand in respect of inward freight against documentary evidence of the commitment and confirmation that the relative goods have been or are to be imported on a Free on Board basis. (ii) These funds will be eligible to meet local disbursements by the non-South African carriers concerned and any surplus may be transferred abroad. (iii) In selling foreign currency to local agents and branches of non-South African carriers, Authorised Dealers should satisfy themselves, by calling for a letter from the company signed by a senior official enclosing a statement of the relative freight collections, less disbursements in South Africa, that the funds are eligible for transfer. Audited statements should be called for on an annual basis. All transactions should be closely scrutinised to ensure that the requirements of the Financial Surveillance Department are fully complied with. (C) Outward freight payable in foreign currencies (i) Payment may be effected to non-resident owners or charterers of carrying vessels, aircraft or vehicles, provided that it can be satisfactorily established that the relative goods have either: (a) been sold on a Cost and Freight or Cost Insurance and Freight basis against payment in foreign currency; (b) been sold on a Cost and Freight or Cost Insurance and Freight basis against payment in Rand from a Non-resident Rand account in the name of the non-resident and/or Rand from a vostro account held in the books of the Authorised Dealer; (c) are being exported on consignment; or 123 of 298 6/2021 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers B.9 (d) are exported under cover of the prescribed SARS Customs Declaration. (D) Freight payments in foreign currency between residents (i) Refer to section E.(B)(iv) of the Authorised Dealer Manual regarding exemptions granted in this regard. (E) Freight documentation requirement (i) Residents must ensure that original final freight invoices are presented to an Authorised Dealer for payment. Under no circumstances may Authorised Dealers accept quotes and/or pro-forma invoices presented for payment. (F) Ships and aircraft disbursements (i) Authorised Dealers may permit payments in respect of the normal operational commitments, including container leasing charges incurred outside South Africa by ships and aircraft owned or chartered by residents for commercial purposes. Documentary evidence of the charges involved should be submitted by the applicant. ---oOo--- 124 of 298 6/2021 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers B.10 B.10 Insurance and pensions (A) Introduction (i) Only those branches of the Authorised Dealers referred to in subsection (K) below may effect payments in foreign currency in terms of this section of the Authorised Dealer Manual. (ii) As a general approach residents are not allowed to enter into any insurance contracts with foreign insurance companies. (iii) However, in view of the limited scope and extent of cover that is available in the South African insurance market, persons, local insurance companies, intermediaries or brokers and Lloyd’s correspondents are in certain instances allowed to place the risks with foreign insurance companies and with Lloyd’s of London. (iv) The Long-term Insurance Act No. 52 of 1998 and the Short-term Insurance Act No. 53 of 1998, respectively, prohibit a person to induce or attempt to induce a person to enter into a contract of insurance with a person who is not registered as an insurer under these Acts. A foreign insurer or an intermediary (local or foreign) is therefore not allowed to market or sell a foreign insurer’s product in South Africa unless registered as an insurer or reinsurer under these Acts. (v) Authorised Dealers may approve applications by resident entities or individuals to make payments in the prescribed manner to non-resident parties in respect of insurance premiums in terms of the provisions set out in the subsections below. (B) Glossary of terms (i) Bordereau (a) A bordereau is an invoice submitted by an insurer to a reinsurer setting out details of the reinsurance, that have been effected (i.e. name of the insured, period of insurance, sum insured, premium and reinsurer’s proportion of sum insured and premium). (ii) Brokers (a) See intermediaries referred to in (vii) below. (iii) Captive insurance company (a) A captive insurance company is a company that is a subsidiary of a parent group and which is formed in order to insure or reinsure risks and exposures of that parent group only. 125 of 298 6/2021 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers B.10 (b) Many large national and multinational organisations have the financial ability to self-insure. (c) One of the recognised ways of effecting self-insurance is to set up a captive insurance subsidiary. (iv) Direct insurers (a) Direct insurers underwrite direct insurance and reinsurance business. (v) Facultative reinsurance (a) Facultative reinsurance is arranged on an ad hoc basis meaning that risks are offered one by one according to the particular requirements of the original insurer. (b) All material facts relating to the risk must be disclosed to the reinsurer in the same way as a proposer must disclose material facts to an insurer. (c) The reinsurer considers each case on its merits and is free to accept or to reject the offer. (d) The important features of facultative reinsurance are freedom of choice by the original insurer and the reinsurer respectively to offer and to accept and disclosure of material facts relating to individual risks. (vi) Insurer (a) An insurer is one party to an insurance policy/contract, the other party being the policyholder. (vii) Intermediaries (a) Intermediaries are go-betweens between the insurer and the policyholder. (b) An intermediary may represent an insurer and canvas for business on its behalf or may act for a client and purchase insurance on the client’s behalf. The intermediary is remunerated by the insurer by way of commission. (c) Where an intermediary acts on behalf of a client, the intermediary advises the client on the nature and extent of the cover the client should have and acts for the client in obtaining the best cover available in the market. The intermediary may not be tied to any particular insurer, but is, however, remunerated by way of 126 of 298 6/2021 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers B.10 brokerage commission by the insurer with whom the intermediary places the business. (viii) Life insurance business (a) Life insurance business means the business of assuming insurance obligations under life policies which, inter alia, include endowment policies, retirement annuity policies, annuity policies. (ix) Lloyd’s correspondent (a) Lloyd’s correspondent means a person who is approved by Lloyd’s and authorised by a Lloyd’s broker or Lloyd’s underwriter to act in South Africa as an agent for or on behalf of that broker or underwriter. (x) Lloyd’s of London (a) Lloyd’s underwriters are authorised, based on the conditions determined in the Short-term Insurance Act, to carry on short-term insurance business in South Africa. Lloyd’s is not an insurance company. It is an association of individual underwriters who operate only from London, but who underwrites business introduced by brokers from all parts of the world. (b) Lloyd’s can also be referred to as a market place and a central organisation dealing with administration, documentation and accounting. (c) The insurance is transacted by separate underwriting syndicates. These syndicates conduct independent operations in the acceptance of insurance business, although some specialise in particular classes of insurance and geographical areas. The syndicates vary in size and act on behalf of their individual members. Each member authorises the syndicate of which he is a member to underwrite premium income and accepts unlimited liability for the insurance underwritten. Insurance can only be placed with syndicates by registered, accredited Lloyd’s brokers in London. These brokers have agents, known as ‘Lloyd’s correspondents’ throughout the world. (xi) Long-term Insurance Act (a) Means the Long-term Insurance Act, 1998 (Act No. 52 of 1998). (xii) Long-term insurance business (a) Long-term insurance business means any assistance business, disability business, fund business, health business, life business or sinking fund business. 127 of 298 6/2021 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers B.10 (b) Long-term insurance’s main purposes are the offering of benefits on death or on a specific date (e.g. retirement) or the occurrence of an accident or on disablement. It helps the policyholder to make financial provision for the policyholder and the latter’s dependants. It also provides a medium of saving and investment on a systematic long-term basis. Most policies combine these aspects of life insurance, the protection element and the savings element, to a greater or lesser degree. (xiii) Marine insurance (a) Marine insurance is a contract which indemnifies the insured against: (aa) loss of or damage to any vessel; (bb) loss of or damage to goods during their conveyance by water or while being stored, handled or treated in connection with such conveyance; (cc) loss of freight for any such conveyance; and (dd) any other loss in connection with any such vessel or goods or freight against which an insurance may lawfully be effected. (b) Goods conveyed on land or air, although interstate, shall not be regarded as a marine policy and will therefore not qualify for purposes of subsection (E)(ii)(d) below. (xiv) Professional reinsurers (a) Professional reinsurers confine their activities to reinsurance and do not undertake direct underwriting. (xv) Reinsurer (a) A reinsurer is a party to an insurance contract with an insurer. (b) Under a reinsurance contract the reinsurer accepts all or a certain share of the insurance or insurances underwritten by the insurer in return for a certain share of the premium. This enables an insurer to underwrite much larger amounts than it would be able to carry for its own account. (xvi) Short-term Insurance Act (a) Means the Short-term Insurance Act, 1998 (Act No. 53 of 1998). 128 of 298 6/2021 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers B.10 (xvii) Short-term insurance business (a) Short-term insurance embraces all insurance contracts other than long-term insurance contracts. (b) The majority of short-term insurance contracts run for 12 months or less and may be renewed from one period to another. (xviii) Sinking fund business (a) Sinking fund business means the business of assuming obligations under sinking fund policies. (xix) Sinking fund policy (a) Sinking fund policy means a contract other than a life policy, in terms of which an insurer, in return for a premium, undertakes to provide one or more sums of money, on a fixed or determinable future date, as policy benefits. (xx) Slip (a) A slip means a memorandum from the insurer to the reinsurer setting out all salient details of the proposed transaction in terms of the original offer. If acceptable, the original (or master) slip is initialled and dated by the reinsurer and returned to the insurer. (xxi) Treaty reinsurance (a) Treaty reinsurance is a contract between an insurer and a reinsurer whereby the reinsurer is obliged to accept all items ceded to it in terms of the treaty over a specified period without any consideration being given to the merits of any individual risk. (b) The important features of treaty reinsurance are an obligatory acceptance by the reinsurer of any risk falling within the ambit of the treaty and the absence of the necessity for the original insurer to disclose details of individual risks. (C) Foreign currency payments in respect of short-term insurance premiums or reinsurance premiums (i) In respect of insurance and reinsurance premiums placed abroad, Authorised Dealers may approve the following: (a) Reinsurance by registered insurers (excluding registered captive insurance companies) Applications by registered insurance companies to remit reinsurance premiums (excluding reinsurance premiums in respect 129 of 298 6/2021 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers B.10 of currency risks), which request is accompanied by a letter signed by two senior officials of the company concerned, incorporating: (aa) a declaration that the applicant is registered in terms of section 9 of the Short-term Insurance Act and has been issued with a registration certificate by the Registrar of Insurance; and (bb) a declaration that the underlying transaction was entered into under an ‘approved reinsurance policy’ as defined in section 1(1) of the Short-term Insurance Act. (b) Reinsurance through intermediaries, including Lloyd’s correspondents approved by Lloyd’s of London Applications by intermediaries and Lloyd’s correspondents to remit reinsurance premiums, excluding reinsurance premiums in respect of currency risks, provided that the request is accompanied by: (aa) a letter signed by two senior officials of the intermediary/Lloyd’s correspondent concerned incorporating the names of the registered insurance and reinsurance companies or Lloyd’s brokers/Lloyd’s underwriters on whose behalf the reinsurance is transacted; and (bb) a declaration by the registered insurer(s) concerned that the transaction was entered into as an ‘approved reinsurance policy’ as defined in section 1(1) of the Short-term Insurance Act. (c) Insurance (excluding reinsurance) through Lloyd’s correspondents approved by Lloyd’s of London Applications by Lloyd’s correspondents approved by Lloyd’s of London to remit insurance premiums, excluding insurance premiums in respect of currency risks, in respect of: (aa) cover placed in its entirety with Lloyd’s underwriters through a broker at Lloyd’s, which request must be accompanied by a letter signed by two senior officials of the Lloyd’s correspondent concerned incorporating: (1) a declaration that the Lloyd’s correspondent is authorised to carry on such insurance business under the Short-term Insurance Act; and (2) a declaration that the transaction was entered into with an underwriter at Lloyd’s through a broker at Lloyd’s. (bb) cover placed through a broker at Lloyd’s which is not in its 130 of 298 6/2021 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers B.10 entirety underwritten by an underwriter at Lloyd’s which request must be accompanied by: (1) a letter signed by two senior officials of the Lloyd’s correspondent declaring that the Lloyd’s correspondent is authorised to carry on such insurance business under the Short-term Insurance Act; and (2) a copy of a letter issued by the Registrar of Short-term Insurance, granting approval in terms of section 8(2)(d) of the Short-term Insurance Act to the intermediary/ Lloyd’s correspondent to render services in relation to that short-term policy. (ii) Documentary evidence (a) All requests for the remittance of insurance premiums referred to above must also be supported by documentary evidence (e.g. a statement of account, bordereau, slip or debit note) reflecting details of the insurance transacted and premiums payable. (iii) Transactions on open account (a) In respect of the transactions outlined in (i) above, Authorised Dealers may approve requests by the entities mentioned to transact insurance business with foreign insurance companies, intermediaries and Lloyd’s of London on open account with settlement of outstanding account balances taking place periodically. (b) Authorised Dealers are required to view statements of account or bordereaux reflecting details of all debits and credits passed over such accounts before authorising payments in settlement thereof. Care must be exercised to ensure that only the following debits and credits are reflected: (aa) premiums; (bb) taxes; (cc) commissions; (dd) brokerage; (ee) losses; (ff) claims; (gg) premium reserves retained; (hh) premium reserves released; (ii) loss reserves retained; (jj) loss reserves released; (kk) premium adjustments including refunds; and (ll) interest on reserves. 131 of 298 6/2021 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers B.10 (c) No other credits and debits (e.g. directors’ fees, travel expenses, administrative fees, dividends.) may be passed over these accounts. (iv) Applications to the Financial Sector Conduct Authority (a) All applications to remit insurance premiums, excluding insurance premiums in respect of currency risks, not covered in (i) above, must be submitted timeously by the Authorised Dealer to the Financial Sector Conduct Authority, P O Box 35655, Menlo Park, Pretoria, 0102. (b) Such applications must be accompanied by a duly completed Form MPI and documentary evidence (e.g. invoice, a statement of account). (c) The Financial Sector Conduct Authority will communicate their response to the Authorised Dealer concerned who may effect transfer against suitable documentary evidence, provided that the request was recommended by the aforementioned board. (v) Applications to the Financial Surveillance Department (a) All applications to remit reinsurance and/or insurance premiums abroad in respect of currency risks, must be submitted to the Financial Surveillance Department for consideration. (vi) Registered captive insurance companies (a) Offshore captive insurance companies (aa) The establishment of captive insurance companies abroad requires the prior written approval of the Financial Surveillance Department. (bb) Permission is also required to remit insurance and reinsurance premiums to such captives. Any such request must contain full particulars of the insurance and reinsurance to be transacted and be accompanied by a duly completed Form MPI and documentary evidence (e.g. invoice, a statement of account). (b) Onshore captive insurance companies (aa) Applications by onshore captive insurance companies to remit premiums in respect of the placement of reinsurance abroad, must be submitted to the Financial Surveillance Department. 132 of 298 6/2021 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers B.10 (bb) Such applications must contain full particulars of the reinsurance to be transacted and documentary evidence (such as statement of account, bordereau, slip or debit note). (vii) Refund of pro rata worldwide corporate group insurance (a) Where the group or global insurance cover is taken out by the non- resident holding or parent company, Authorised Dealers may transfer the pro rata premium against the production of documentary evidence confirming the local company’s portion. (b) Authorised Dealers should on a quarterly basis and in the prescribed format report via email (INS.GlobalPolicy@FSB.co.za and copy FNS-FSBINS@resbank.co.za) directly to the Insurance Division of the Financial Sector Conduct Authority all refunds transferred in terms of the above-mentioned authority. (D) General (i) Insurance Acts (a) It should be drawn to the attention of registered South African insurance companies and brokers, underwriters and Lloyd’s correspondents approved by Lloyd’s of London that the Authorised Dealer Manual does not absolve them from complying with all the relevant sections of the Long-term Insurance Act and the Short-term Insurance Act. (ii) Branch settlements (a) The registration of branches outside the CMA requires the prior written approval of the Financial Surveillance Department and notification to the Financial Sector Conduct Authority. (b) Authorised Dealers may approve requests by registered local insurance companies to settle claims in South Africa under policies written by their authorised branches or agents outside South Africa and vice versa. (c) It is a condition that any foreign currency surplus to a branch’s requirements must be repatriated periodically (at least on an annual basis) in terms of the provisions of Regulation 6. (d) All South African insurance companies with branches or intermediaries outside the CMA must submit a statement to the Financial Surveillance Department by 31 March each year, giving particulars of their foreign currency assets and liabilities as at

31 December of the previous year. 133 of 298 6/2021 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers B.10 (iii) Foreign currency working balances (a) Applications by South African insurance companies registered in terms of section 9 of the Short-term Insurance Act who wish to retain foreign currency premiums and any other foreign currency that accrues to them for settlement of claims under policies issued in foreign currency must be submitted to the Financial Surveillance Department. Such applications must, inter alia, also incorporate the following information: (aa) the amount of the contingent liabilities (unexpired premiums) of the insurer or reinsurer concerned under unmatured foreign currency policies, calculated in accordance with the provisions of paragraph 4 of Board Notice 169 of 2011 on Prescribed requirements for the calculation of the values of the assets, liabilities and capital adequacy requirement of short-term insurers issued under item 2 of Part 1 of Schedule 2 of the Short-term Insurance Act; (bb) the amount, as estimated by the insurer or reinsurer, of the liabilities in respect of claims under foreign currency policies which had been intimated to the insurer or reinsurer but which had not been paid at any given date; and (cc) the amount, as estimated in accordance with the method prescribed by the applicable authority of the insurer’s or reinsurer’s liabilities relating to claims under foreign currency policies which had arisen but had not been intimated at any given date. (b) The information in (a) above would be used by the Financial Surveillance Department as a guideline only in determining the extent of foreign currency working balances that may be retained. (c) The following would be conditions of any approval granted by the Financial Surveillance Department: (aa) the foreign currency working balances must be administered by local Authorised Dealers in a CFC account opened in the name of their client; (bb) the CFC accounts must form part of the Authorised Dealer’s nostro accounts administration and accordingly the client may not operate thereon other than through and with the full cognisance and approval of the Authorised Dealer concerned; and (cc) any foreign currency surplus not required to meet estimated future foreign currency commitments must be converted to Rand periodically (at least on an annual basis). 134 of 298 6/2021 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers B.10 (iv) Premiums (a) Premiums on existing long-term foreign currency insurance policies and pension fund contributions due by immigrants may be dealt with in terms of section B.5(B)(iii)(a) of the Authorised Dealer Manual. (b) Premiums on insurance policies and pension fund contributions due by nationals of other countries who are temporarily resident in South Africa on secondment to a local firm or who were recruited by a South African firm under a definite contract and who are still so employed may be dealt with in terms of section B.5(A) of the Authorised Dealer Manual. (E) Short-term insurance by residents (i) In general, short-term insurance policies may be issued by registered South African insurance companies in Rand only, except as provided for in (ii) below. (ii) Insurance policies may be issued in foreign currency to cover risks incidental to: (a) aviation (hull only); (b) assets held outside the CMA with approval; (c) foreign travel; (d) marine and war, general average, salvage or other third-party liability under marine insurance and reinsurance (hull and cargo); and (e) imports and exports of physical goods (provided that the contract of sale is denominated in foreign currency and the resident party carries the risk). (iii) Premiums may, however, only be paid in Rand and the insurance company concerned may apply to the Financial Surveillance Department for permission to convert such premiums into foreign currency on the basis outlined in subsection (D)(iv) above. (iv) Short-term insurance policies issued by tribunalised agents on behalf of Lloyd’s of London may be issued in Rand or in any foreign currency. (v) In paying or arranging the payment of foreign currency claims to residents, insurance companies and intermediaries referred to above must ensure that the funds are converted to Rand in terms of the provisions of Regulation 6. 135 of 298 6/2021 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers B.10 (vi) Should it be required to dispose of the foreign currency in some other way, an application must be submitted to the Financial Surveillance Department. Pending the submission of an application, funds not exceeding the equivalent of R5 000 per person may be made available in foreign currency to cover the cost of replacement articles and expenses incidental to claims in respect of policies issued to cover foreign travel risks. (vii) Where insurance policies have been issued to exporters of goods sold on Cost Insurance and Freight terms, funds due by registered South African insurance companies in settlement of claims lodged by the buyers may be transferred abroad or, if authorised, released by the Authorised Dealer concerned from a CFC account. (F) Short-term insurance by non-residents (i) Short-term insurance policies may be issued to non-residents by registered South African insurance companies and intermediaries in Rand or in any foreign currency. Authorised Dealers must, however, satisfy themselves that premiums in respect thereof are received in South Africa and converted to Rand or, if authorised, credited to a CFC account as referred to in subsection (D)(iv) above. (ii) Any funds due by registered South African insurance companies in settlement of claims lodged by non-residents may be transferred abroad or, if authorised, released by the Authorised Dealer concerned from a CFC account. (iii) Losses payable and account balances due by registered South African insurance companies on facultative and treaty reinsurance may also be transferred abroad or, if authorised, released by the Authorised Dealer concerned from a CFC account, provided that the request is supported by a statement of account reflecting details of the losses or account balances to be settled. Care must be exercised to ensure that only debits and credits referred to in subsection (C)(iii) above are reflected on the accounts before authorising settlement of outstanding account balances. (G) Foreign currency payment of premiums in respect of the reinsurance of long-term insurance risks (i) Authorised Dealers may approve applications by registered long-term insurance companies to remit long-term reinsurance premiums in respect of mortality and morbidity risks only, provided that the request is accompanied by a declaration signed by two senior officials of the company concerned confirming: (a) the contract of reinsurance was entered into under an ‘approved reinsurance policy’ as defined in Schedule 3 to the Long-term Insurance Act and that the approval of the Registrar of Long-term 136 of 298 6/2021 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers B.10 Insurance has been obtained in terms of paragraph (a)(i)(bb) of the said definition; (b) the name of the reinsurer with whom the reinsurance contract has been entered into; and (c) the applicant is registered in terms of section 9 of the Long-term Insurance Act and has been issued with a registration certificate by the Registrar of Long-term Insurance. (ii) Authorised Dealers must forward a copy of the approval granted to The Registrar of Long-term Insurance, P O Box 35655, Menlo Park, Pretoria, 0102, for their information. (H) Long-term insurance by residents (i) Long-term insurance policies may be issued by registered South African insurance companies or through local intermediaries in Rand only. (ii) Foreign currency policies entered into in Sterling prior to 1958-05-08 may be continued and foreign currency made available against documentary evidence (e.g. premium renewal notice) for the payment of premiums. (iii) The proceeds of claims on existing foreign currency policies received abroad by residents from non-South African insurers must be converted to Rand in terms of the provisions of Regulation 6. (iv) In paying or arranging the payment of foreign currency claims in respect of those policies issued in Sterling prior to 1958-05-08 to residents of South Africa, registered South African insurance companies must ensure that the funds are converted to Rand in terms of the provisions of Regulation 6. (v) Except as provided for in section B.2(J)(ii)(g) of the Authorised Dealer Manual, no insurance may be switched from Rand to foreign currency or assigned to a non-resident without the prior written approval of the Financial Surveillance Department and the relevant insurance authority. (I) Long-term insurance by non-residents (i) Currency in which policies may be issued (a) Long-term insurance policies may be issued to non-residents by registered South African insurance companies or through local intermediaries and agents either in Rand or in any foreign currency. (b) Authorised Dealers must, however, satisfy themselves that the foreign currency premiums in respect of policies issued to non-residents are received in South Africa in foreign currency or in Rand from a Non-resident Rand account in the name of the 137 of 298 6/2021 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers B.10 non-resident and/or Rand from a vostro account held in the books of the Authorised Dealer. (c) Funds due to non-residents by registered South African insurance companies in settlement of claims and in respect of surrenders and loans granted may be transferred abroad. Foreign currency premiums received in this regard must be converted to Rand. (ii) Medical examination expenses of existing and prospective policy holders (a) Authorised Dealers may approve applications by registered South African insurance companies and intermediaries to remit funds for the purpose stated, provided that the request is supported by the account from the non-resident medical practitioner, addressed to the applicant company or firm. (J) Pension and provident schemes (i) Retention of contributions in foreign currency (a) Where registered South African pension or provident schemes include non-resident members, the prior written approval of the Financial Surveillance Department must be obtained for the retention of foreign currency contributions to cover the scheme’s foreign currency liabilities. (b) All schemes referred to in (a) above that have been authorised to retain contributions in foreign currency (see CFC accounts referred to in subsection (D)(iii) above) must submit a statement to the Financial Surveillance Department by 31 March each year, giving particulars of their foreign currency balances and foreign currency liabilities as at 31 December of the previous year. (ii) Pension commutations (a) Foreign nationals (aa) Authorised Dealers may approve the transfer of lump sum commutations as well as monthly pensions abroad, provided that they are satisfied that the provisions of section B.5(A) of the Authorised Dealer Manual have been complied with. (b) Mine labourers (aa) In the case of mine labourers who are returning or who have already returned permanently to countries outside the CMA, Authorised Dealers may approve the transfer abroad of lump sum commutations as well as monthly pensions. 138 of 298 11/2021 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers B.10 (c) Death benefits (aa) Proceeds from registered South African pension and provident schemes as well as insurance policies (annuity, endowment and life) due to non-residents who are nominated beneficiaries upon the demise of the policy holder may be transferred abroad on presentation of a Death Certificate as well as documentary evidence from the institution concerned reflecting the full names of the beneficiary and the amount due to the beneficiary. (d) Non-residents (aa) In the case of non-residents, including non-resident employees of South African entities who contributed to a South African pension or provident scheme by transferring funds to South Africa, Authorised Dealers may approve the transfer abroad of lump sum commutations, as well as monthly pensions. (e) Individuals who ceased to be residents for tax purposes in South Africa (aa) Requests by individuals who ceased to be residents for tax purposes in South Africa on or after 2021-03-01 to withdraw from their pension preservation, provident preservation and retirement annuity funds shall only be considered by SARS where the person concerned has been non-tax resident for at least three consecutive years. (bb) In respect of the aforementioned, the provisions of section B.2(B)(J) must be adhered to. (cc) Authorised Dealers may allow the transfer of monthly pension and/or annuity payments paid by registered funds only. In this regard, Authorised Dealers must require a TCS of good standing at least once a year, which must be verified by the Authorised Dealers to confirm that the taxpayer is tax compliant. (iii) Bonuses and surplus pension distributions (a) Non-residents and foreign nationals (aa) Authorised Dealers may approve the transfer abroad of bonuses and/or surplus pension distributions paid by registered pension funds. 139 of 298 11/2021 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers B.10 (K) Nominated branches The following branches of Authorised Dealers are authorised to transact insurance business and to effect payments in foreign currency: Authorised Dealer Authorised branch Absa Bank Limited Brandwag Branch, Bloemfontein Brooklyn Branch, Pretoria Eastgate Branch, Johannesburg Forex Operations, Cape Town Forex Operations, Durban Forex Operations, Head Office Forex Operations, Johannesburg Forex Operations, Pretoria Gateway Mall Branch, Umhlanga Ridge Newton Park Branch, Port Elizabeth Randburg Branch, Johannesburg Roggebaai Branch, Cape Town Waterfall Mall Branch, Rustenburg Access Bank (South Africa) International Banking Division Head Limited Office Bank of China Johannesburg Branch Bank of Taiwan South Africa Johannesburg Branch Bidvest Bank Limited Head Office, Braamfontein BNP Paribas SA – South Africa Johannesburg Branch Citibank, N.A., South Africa Johannesburg FirstRand Bank Limited FirstRand Currency and Exchanges Department Forex Product House-Retail 140 of 298 22/2021 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers B.10 Authorised Dealer Authorised branch Forex Product House-Bloemfontein Forex Product House-Eastern Cape Forex Product House-Gauteng Forex Product House-KwaZulu-Natal Forex Product House-Western Cape HSBC Bank plc – Johannesburg Branch Johannesburg Branch Investec Bank Limited Head Office, Sandton Mercantile Bank Limited Cape Town Branch Durban Branch Treasury Operations, Sandton Nedbank Limited Cape Town Global Business Centre Durban Global Business Centre Gauteng Global Business Operations Paarl Global Business Centre Port Elizabeth Global Business Centre Sasfin Bank Limited Head Office, Johannesburg Société Générale Johannesburg Branch Standard Chartered Bank – Johannesburg Johannesburg Branch The Standard Bank of South Non Resident Centre, Johannesburg Africa Limited TPS Operations SA, Johannesburg ---oOo--- 141 of 298 22/2021 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers B.11 B.11 Bank notes (A) General (i) Regulation 3(1) prohibits the exportation and importation of Rand notes unless the prior written approval of the Treasury has been obtained. The export of foreign bank notes is similarly restricted. (ii) As an exception Authorised Dealers may allow the exportation of Rand notes and foreign bank notes subject to the conditions set out hereunder. (iii) It should be noted that various foreign countries have imposed restrictions on the amount of currency that travellers to such countries may import in the form of bank notes and any excess of the applicable limits may be subject to confiscation by the authorities of those countries. (B) Residents and non-residents (i) Residents including foreign nationals, non-residents and visitors are permitted to export up to R100 000 in notes when leaving South Africa. This allowance for residents and foreign nationals is in addition to the normal travel allowance. (ii) The parties mentioned in (i) above are also not permitted to import Rand notes or any bank notes of other member countries of the CMA in excess of a total value of R100 000 per person. (iii) Authorised Dealers should also take note of the provisions of section F.1(B) of the Authorised Dealer Manual regarding the export and repatriation of Rand notes. (C) Migrant labourers returning to neighbouring countries (i) The R100 000 note restriction does not apply to migrant labourers returning to neighbouring countries who are permitted in terms of existing arrangements with Customs, a division of SARS, to take with them reasonable amounts in the form of Rand notes representing their earnings in South Africa. (D) Foreign bank notes (i) Authorised Dealers who wish to import bulk supplies of foreign bank notes for their normal requirements must refer the matter to the Financial Surveillance Department. (ii) Requests for the importation of used foreign bank notes must be accompanied by duly completed Forms IE 230 (including a VAT certificate) and IE 461. The forms may be downloaded from ITAC's 142 of 298 8/2026 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers B.11 website: www.itac.org.za, by following the links: Legislation and documents>Application forms>Select: Import>Application to register as an importer or change of current information (Form IE 230)>Application for import facilities (Form IE 461). (iii) There are no restrictions on the acquisition by Authorised Dealers of foreign bank notes from bona fide visitors to South Africa and returning residents. Authorised Dealers should, however, bear in mind that various foreign countries have imposed restrictions on the amount in bank notes which may be exported from and repatriated to their respective countries. (iv) Regulation 3(1) precludes the export of foreign bank notes and Authorised Dealers wishing to despatch their holdings of surplus foreign bank notes to their correspondents abroad for collection must obtain the prior written approval of the Financial Surveillance Department. ---oOo--- 143 of 298 6/2021 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers B.12 B.12 Merchanting, barter and counter trade (A) Merchanting trade (i) Authorised Dealers may allow merchanting trade transactions by residents provided that the time-lag between the pay away of funds to the foreign supplier (seller) and the receipt of funds from the foreign importer (buyer) will not exceed a period of four months. (ii) Authorised Dealers must ensure that payment is received from the foreign importer (buyer), which must include the South African merchant’s profit and must be received in foreign currency or Rand from a Non-resident Rand account in the name of the non-resident and/or Rand from a vostro account held in the books of the Authorised Dealer. (iii) A copy of the relative agreement entered into between the parties concerned or a commercial invoice from the seller together with a commercial invoice from the South African merchant must be produced in confirmation of the arrangements. (iv) These transactions should preferably be covered by confirmed irrevocable letters of credit issued by the foreign importer’s bankers in favour of the South African merchant. (v) In instances where the above-mentioned requirements cannot be complied with, a written application must within 14 days be submitted to the Financial Surveillance Department for consideration. (vi) Authorised Dealers should note that non-compliance with the above directives will be viewed in a serious light. (B) Barter and counter trade (i) Transactions of this nature must be referred to the Financial Surveillance Department for prior written approval. (ii) Requests for barter and counter trade must be supported by copies of the contracts entered into between the relative parties with a full explanation of the manner in which the values of the goods have been arrived at. Where an open market or world price exists, any deviation therefrom must be fully substantiated and motivated. ---oOo--- 144 of 298 10/2026 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers B.13 B.13 Buying and selling commissions (A) Buying commissions (i) Buying commissions may be effected to independent agents outside South Africa in foreign currency or in Rand to the credit of a Non-resident Rand account, provided that the client confirms in writing that the rate of the commission or fee is normal in the particular trade concerned. (B) Selling commissions (i) Where payment for goods exported to countries outside South Africa has been received in foreign currency or in Rand from a Non-resident Rand account in the name of the non-resident and/or Rand from a vostro account held in the books of the Authorised Dealer, or the Authorised Dealer concerned is fully satisfied that payment will be so received, foreign currency may be made available in settlement of commissions due to independent selling agents on viewing an invoice or statement of account from the selling agent and provided that the client confirms in writing that the rate at which such payments are calculated can be regarded as reasonable in the trade concerned. (ii) Selling commissions (and any other export-related expenses) may be paid from export proceeds that were credited to a CFC account. (C) Commission and/or brokerage on investments introduced into South Africa from abroad (i) Authorised Dealers may approve, against the production of documentary evidence confirming the amount involved, applications by residents to effect commission and/or brokerage to non-resident parties in respect of investments introduced into South Africa from abroad, provided that the client confirms in writing that the rate at which such payments are calculated is market related. ---oOo--- 145 of 298 6/2021 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers B.14 B.14 Miscellaneous transfers (A) General (i) Authorised Dealers may approve applications by South African business entities and/or individuals for the remittance abroad of the payments mentioned below against the production of documentary evidence confirming the amounts involved. (B) Advertising, exhibition, sponsorship and trade fair expenses (i) Advertising and exhibition fees, inclusive of sponsorship fees, in respect of participation in trade fairs outside the CMA. (C) Charges for repairs and adjustments to goods temporarily exported (i) In the case of manufactured goods registered with Customs, for re-export to their country of origin for repairs or adjustments, provided that Authorised Dealers are fully satisfied that the funds are required for repairs or adjustments and not for replacements. (D) Charges in connection with legal disputes (i) Legal fees, court costs as well as upfront deposits for legal work incurred outside the CMA. (E) Insurance and road accident fund claims due to non-residents (i) Claims payable to non-residents as a result of injury, loss or damages suffered while visiting South Africa. (F) Court judgement payments (i) Payments due to non-residents in terms of or as a result of any judgement granted by a court in South Africa. (G) Examination fee payments (i) Examination fees payable to schools, universities or similar educational institutions or examining bodies abroad whose exams are being held in South Africa. (H) Medical expenses (i) Medical examination expenses in respect of prospective contract workers and immigrants, provided that the account from the non-resident medical practitioner, addressed to the resident corporate entity, is submitted in support of the request. 146 of 298 6/2021 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers B.14 (I) Passport, visas, birth and death certificates, testimonials, degrees and diplomas (i) Costs relating to the renewal of passports and in respect of the cost of obtaining visas, as well as copies of birth and death certificates, testimonials, degrees and diplomas. (J) Refunds (i) Refunds paid by SARS to non-residents, provided that Authorised Dealers are satisfied that the beneficiaries are permanently resident outside the CMA. (ii) Pension payments that have been received from outside the CMA after the demise of a resident beneficiary. (iii) Refunds in respect of orders, tour reservations, registration fees, erroneous payments and overpayments by non-residents. (iv) Any other refunds not exceeding a total value of R200 000 per calendar year due to non-residents involving related parties, provided that the Authorised Dealer is satisfied that the relevant transaction complies with the transfer pricing guidelines and that suitable documentary evidence is viewed in this regard. (K) Registration of drugs (i) Fees due by pharmaceutical companies registered in South Africa in respect of the registration of drugs outside the CMA. (L) Rental and lease payments (i) Rental and lease payments in respect of capital goods utilised in South Africa or utilised outside South Africa to fulfil any contractual obligations. (M) Sporting events (i) Entrance fees for participation in international sporting events. (N) Subscriptions (i) Current membership and affiliation fees to recognised medical, engineering and other technical, learned or international societies. (ii) Club subscriptions. (iii) Current subscriptions for international business or technical information services, supplied via data or telephone lines to visual display units and printers. 147 of 298 11/2026 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers B.14 (O) Technical service payments (i) Fees including reimbursements of air fares to the CMA due in respect of non-residents brought to South Africa for the specific purpose of installing or repairing specialised machinery and equipment or for commissioning and supervising the installation thereof, as well as training local personnel in this regard. (P) Tender documentation (i) Fees due to acquire tender documentation in order to tender for contracts outside the CMA. (Q) Transportation costs and cash floats (i) Ship disbursements, landing fees, fuel costs, emergency repair costs, toll fees and other fees related to the transport of goods. (ii) In cases where a resident must effect these payments on a regular basis in cash to non-residents or on behalf of non-residents, Authorised Dealers may accord residents with a cash float in foreign currency not exceeding the equivalent of R200 000 at any one time. The cash float may only be replenished against the presentation of documentary evidence confirming the utilisation of foreign currency from the cash float for these purposes. (iii) Authorised Dealers may also make advance payments in foreign currency, not exceeding the limit mentioned above, to non-resident petroleum and concession companies where cards will be issued to allow for the payment of petrol and toll fees respectively. The accounts may be replenished against the presentation of documentary evidence confirming the purposes for which funds were utilised. (R) Registration of agrochemical products (i) Registration fees in respect of agrochemical products registered outside the CMA. (S) Visiting artistes, entertainers, sportsmen and similar professionals (i) The net earnings of foreign artistes, entertainers, sportsmen and similar professionals engaged by residents, may on departure be effected by Authorised Dealers, provided that they view documentary evidence from SARS confirming that all tax commitments have been met. (ii) Where a contract requires that an upfront or advance payment be transferred prior to completion of the non-resident’s contractual obligations, such payment may only be credited to an Escrow account and may only be released proportionately after the completion of each performance. 148 of 298 11/2026 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers B.14 (T) Foreign contract payments (i) Expenses, e.g. salaries, accommodation costs, incurred abroad by residents as a result of their foreign contractual obligations. A copy of the relevant foreign contract must be viewed. (U) Conference, congress, seminar fees (i) Residents, including local companies, may be permitted to pay conference, congress and seminar fees (including ad hoc short-term courses presented at foreign entities) to non-residents in respect of local or international events, provided that documentary evidence from the foreign beneficiary is submitted in support of the request. (V) Employment contracts involving non-residents (i) Where South African entities are required to remit funds abroad in respect of employment contracts involving non-residents who are employed in South Africa, Authorised Dealers may allow such transfers provided that the payments are commensurate with the work undertaken. In this regard the provisions of section B.5(A)(i) of the Authorised Dealer Manual should be adhered to by the individual contract workers. (ii) Where South African entities are required to remit funds abroad in respect of employment contracts involving non-residents who are employed outside South Africa, Authorised Dealers may allow such transfers provided that the payments are commensurate with the work undertaken. (W) Mould payments (i). Payments in respect of the design and/or manufacturing of moulds not exceeding R200 000. A copy of the underlying agreement must be viewed and the Authorised Dealer should, prior to effecting the payment, be satisfied that: (a) the mould is manufactured by the foreign supplier; (b) it is only for a once-of design and manufacturing of the mould; and (c) the mould is required to manufacture goods to be imported by the applicant. (X) Miscellaneous payments (i) Miscellaneous payments within a limit of R200 000 per transaction to non-residents not specifically dealt with elsewhere in the Authorised Dealer Manual. 149 of 298 11/2026 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers B.14 (ii) Suitable documentary evidence must be viewed substantiating the amount and nature of the liability. (iii) The nature of these transactions must be correctly reported to the Financial Surveillance Department via the Reporting System. ---oOo--- 150 of 298 11/2026 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers B.15 B.15 Guarantees (A) Guarantees to non-residents (i) Authorised Dealers may, without reference to the Financial Surveillance Department, issue guarantees to non-residents on behalf of residents for transactions that are permissible in terms of the Authorised Dealer Manual or alternatively where prior written approval from the Financial Surveillance Department has been granted. (ii) Capital guarantees (refer to section B.2(C) of the Authorised Dealer Manual) and currency transfer guarantees are excluded from the dispensation. (iii) Authorised Dealers may, where applicable, approve the extension of the guarantees authorised. (iv) In the event of such guarantees being implemented, Authorised Dealers may effect payment in terms thereof. (B) Guarantees issued by non-residents (i) Authorised Dealers may grant local financial assistance to a resident, who is not an ‘affected person’, against guarantees issued by non- residents. (ii) Payment in respect of guarantee fees payable on guarantees issued by non-residents, may be effected provided that the fee is market related or falls within an approved percentage of the guarantee amount based on existing market practice. (iii) Shipping guarantees may be issued to residents acting on behalf of non- residents, against guarantees by non-residents. ---oOo--- 151 of 298 6/2021 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers B.16 B.16 Credit and/or debit cards (A) Credit and/or debit cards authorised for use outside the CMA (i) All credit and/or debit cards, including co-branded cards, issued by Authorised Dealers, as licensed by American Express, Diners Club, MasterCard or Visa may be utilised outside the CMA, subject to the provisions mentioned in subsections (D) and (E) below and provided that all outward transactions are reported in terms of the Reporting System. (B) Issue of credit and/or debit cards to non-residents (i) Credit and/or debit card issuers may issue such cards to non-residents, provided that the expenditure is settled in foreign currency or Rand from a Non-resident Rand account in the name of the non-resident and/or Rand from a vostro account held in the books of the Authorised Dealer. (C) Bulk transfers by credit and/or debit card issuers (i) Authorised Dealers may permit periodic bulk transfers by credit and/or debit card issuers in settlement of debits received from abroad and commission charges due in respect of amounts spent by cardholders. (ii) Certain card issuers have set off arrangements with their overseas associates and settlement is effected for net amounts only. (D) Travel allowances (i) A resident or a resident temporarily abroad in whose name one or more bank credit and/or debit cards have been issued may use such cards to avail up to 100 per cent of the authorised single discretionary allowance or the remaining balance thereof applicable to the journey of the resident. (ii) In the event of any contravention of the provisions of the Regulations a cardholder may be deprived of the use of all cards in addition to being liable for prosecution. (E) Miscellaneous payments for imports, services or subscriptions by means of credit and/or debit cards (i) Resident individuals or local entities in whose name one or more bank credit and/or debit cards have been issued may be permitted to make permissible foreign currency payments for small transactions (e.g. imports over the Internet), by means of such credit and/or debit cards. (ii) Payments are limited to R100 000 per transaction. (iii) Any singular transaction exceeding R100 000 may not be split to circumvent the limit applicable to this dispensation. 152 of 298 12/2026 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers B.16 (iv) It should be brought to the attention of cardholders that this dispensation does not absolve them from ad valorem excise and custom duties or from complying with the requirements imposed by Customs. (v) Cardholders should note that South African credit, debit and virtual cards may not be used to fund any international trading accounts, including crypto assets trading accounts. (F) Foreign lottery tickets and gambling activities (i) Residents may not participate in lotteries organised abroad as such participation contravenes the Lotteries Act, 1997 (Act No. 57 of 1997). (ii) In terms of the National Gambling Act, 2004 (Act No. 7 of 2004), as amended by the National Gambling Amendment Act, 2008 (Act No. 10 of 2008), residents may not participate in any gambling activities not authorised in terms of the aforementioned Act. (iii) Accordingly, Authorised Dealers must decline requests to purchase foreign currency for such purposes in all instances. (iv) Residents may not use their credit and/or debit cards in South Africa to facilitate payments for the above-mentioned purposes. In addition all issuers of American Express, Diners Club, MasterCard and Visa cards may not accept such debits against resident cardholder’s accounts in respect of the payment for foreign lottery tickets or online gambling activities. ---oOo--- 153 of 298 6/2022 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers B.17 B.17 Foreign currency holdings and other foreign assets held by private individuals (natural persons) resident in South Africa (A) Foreign earned income (i) Private individuals (natural persons) resident in South Africa are exempted from the provisions of Regulations 6 and 7 in respect of foreign earned income with effect from 1997-07-01 (i.e. income earned on approved foreign assets or in respect of services rendered to non-residents while physically abroad), with the exception of the proceeds of merchandise exports, which must be repatriated to South Africa within 30 days from the date of becoming entitled thereto. (B) Foreign inheritance and legacies from bona fide non-resident estates (i) Private individuals, who inherited foreign assets from a non-resident after 1998-03-17 are exempted from the provisions of Regulations 6 and 7. (ii) Private individuals need not declare to their Authorised Dealer inheritances or legacies from bona fide foreign estates that accrued after 1998-03-17 and may retain the capital and any income generated thereon abroad. (iii) Contraventions that occurred on or before 1998-03-17 must still be regularised with the Financial Surveillance Department. (C) Gifts and/or donations from non-residents (i) Any foreign asset received by a private individual from a non-resident as a gift or donation on or after 2022-02-23 is exempted from the provisions of Regulations 6 and 7, subject to local tax disclosure and compliance. (ii) Contraventions that occurred before 2022-02-23 must still be regularised with the Financial Surveillance Department. (D) Foreign inheritance and legacies from South African estates with foreign assets (i) Private individuals, who on or after 2022-02-23 became entitled to a foreign inheritance from the estate of a private individual, are exempted from the provisions of Regulations 6 and 7, subject to local tax disclosure and compliance. (ii) However, in respect of assets that accrued to private individuals prior to 2022-02-23 or where the foreign assets inherited were held by the deceased in a manner contrary to the provisions of the Regulations, an application for regularisation of such assets must be submitted via an Authorised Dealer to the Financial Surveillance Department. 154 of 298 6/2023 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers B.17 (E) Residents (i) Private individuals and foreign nationals who are holders of foreign currencies outside South Africa must, unless exempted elsewhere in the Authorised Dealer Manual, offer to sell their holdings to an Authorised Dealer within 30 days from the date of becoming entitled thereto. (ii) Attention has repeatedly been drawn to the obligations imposed on residents by Regulation 6 and a serious view will be taken by the Financial Surveillance Department of any unauthorised retention of foreign currency balances, whether with foreign banks, overseas principals, agents or shippers. (F) Disposal of legal foreign assets held by private individuals (i) Private individuals may with effect from 2022-02-23 dispose of their authorised foreign assets to other private individuals without the specific prior written approval of the Financial Surveillance Department, subject to local tax disclosure and compliance by the relevant parties. In this regard, the private individuals are exempted from the provisions of Regulations 6 and 7. (ii) It should be noted that where the authorised foreign asset is sold to a private individual with recourse to South Africa, the transfers in payment thereof must be dealt with in terms of the R10 million foreign capital allowance and/or the R2 million single discretionary allowance. (iii) Any sale of the authorised foreign assets to private individuals where payment will take place locally in Rands resulting in no cross-border flow of funds other than change of ownership, such transactions must be referred to the Financial Surveillance Department and will also be subject to local tax disclosure as well as compliance by the relevant parties. (iv) Contraventions that occurred before 2022-02-23 must still be regularised with the Financial Surveillance Department (G) Donations of legal foreign assets held by private individuals (i) Private individuals may with effect from 2022-02-23 donate authorised foreign assets to other private individuals, subject to local tax disclosure and compliance by the relevant parties. In this regard, the private individuals are exempted from the provisions of Regulations 6 and 7. (ii) The donations may also be retained abroad without the specific prior written approval of the Financial Surveillance Department, subject to local tax disclosure and compliance by the relevant private individuals. (iii) Contraventions that occurred before 2022-02-23 must still be regularised with the Financial Surveillance Department. 155 of 298 6/2026 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers B.17 (H) Lending of legal foreign assets held by private individuals (i) Private individuals may with effect from 2022-02-23 lend authorised foreign assets to residents, including trusts, subject to local tax disclosure and compliance by the relevant parties. (ii) The local borrower is exempted from the provisions of Regulations 6 and/or 7. (iii) Where the authorised foreign assets are lent to other residents for use abroad, such transactions must take place without any recourse to South Africa. Any arrangements to repay such foreign commitments from South Africa and/or for repayments to take place locally in Rands, such transactions must be referred to the Financial Surveillance Department. (iv) Where the authorised foreign assets are lent to other residents for use locally, the provisions of section I.3(B) of the Authorised Dealer Manual must be adhered to. (v) Contraventions that occurred before 2022-02-23 must still be regularised with the Financial Surveillance Department. ---oOo--- 156 of 298 6/2026 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers B.18 B.18 Control of exports - general (A) Export declarations (i) All exports to countries outside South Africa must be supported by the prescribed SARS Customs Declaration. (ii) All temporary exports to countries outside the CMA for which no payment is to be received in South Africa must, where required, be supported by the prescribed SARS Customs Declaration. These goods or replacement items must be returned to South Africa within a period of six months. (iii) Requests to export any items or goods, with an insurance value in excess of R50 000 for which no payment will be received and where the items exported will not be returned to South Africa must be referred to the Financial Surveillance Department. (B) Regulations in respect of goods exported for sale abroad (i) Authorised Dealers must ensure that all exporters are aware of their legal obligation in terms of the provisions of Regulations 6, 10 and 11 to: (a) sell goods exported within a reasonable time, but no later than six months from the date of shipment; (b) receive the full foreign currency proceeds not later than six months from the date of shipment. Authorised Dealers may authorise South African exporters to grant credit of up to 12 months to foreign importers, provided that the Authorised Dealer granting the authority is satisfied that the credit is necessary in the particular trade or that it is needed to protect an existing export market or to capture a new export market. In this regard, Authorised Dealers are requested to specifically draw the attention of exporters to the provisions of Regulation 6(1) and (5); (c) receive payment in foreign currency or Rand from a Non-resident Rand account in the name of the non-resident and/or Rand from a vostro account held in the books of the Authorised Dealer; (d) offer for sale to an Authorised Dealer the full foreign currency proceeds within 30 days after becoming entitled thereto or deal with it in accordance with the rules applicable to CFC accounts; and (e) report in writing to an Authorised Dealer the non-receipt of the full foreign currency proceeds within the prescribed period, and the failure to sell the goods exported within six months from the date of shipment. 157 of 298 6/2021 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers B.18 (C) Exports against payment in Rand (i) Authorised Dealers must refer all export transactions with a value in excess of R25 000 per transaction to the Financial Surveillance Department where payment is tendered in Rand notes. (D) Control of export proceeds (i) Authorised Dealers must inform their exporting clients that the Financial Surveillance Department will, through the use of an electronic monitoring system, monitor the receipt of export proceeds. (ii) Authorised Dealers must emphasise to their exporting clients the importance of accurately completing the prescribed SARS Customs Declaration and integrated form for export proceeds, which transactions are reported by Authorised Dealers (including the Custom Client/Code Numbers and Unique Consignment References). (E) Goods exported by rail (i) Authorised Dealers must inform their exporting clients who export goods by rail to complete the prescribed SARS Customs Declaration. (F) Exports on consignment (i) While it is not desired to prevent the export of goods on consignment where this is the normal practice in any particular trade, Authorised Dealers should advise their exporting clients of the provisions of Regulation 11. (ii) General usance of the trade should be borne in mind and Authorised Dealers should be on their guard against attempts to unduly delay the repatriation of proceeds having regard to the provisions of Regulation 6(5)(a). (G) Export of motor vehicles (i) Motor vehicles principally designed for the transport of persons and goods, but excluding vehicles exported by diplomatic and foreign representatives and new vehicles exported by local manufacturers or their appointed agents, may not be exported for sale outside the South African Customs Union (i.e. Botswana, Lesotho, Namibia and eSwatini) except by virtue of an export permit issued in terms of the International Trade Administration Act, 2002 (Act No. 71 of 2002). (ii) In respect of the temporary export of motor vehicles to all countries outside the CMA, travellers must complete the prescribed SARS Customs Declaration. 158 of 298 6/2021 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers B.18 (H) Temporary exportation of diamonds (i) Authorised Dealers must inform their clients who export diamonds for further processing abroad (e.g. cutting and grading) that the prescribed SARS Customs Declaration must be completed when exporting the diamonds and that the onus is on the exporter to produce documentary evidence when requested to do so, confirming receipt of the diamonds returned to South Africa. (ii) All conditions imposed by the South African Diamond and Precious Metals Regulator must be strictly adhered to. ---oOo-- 159 of 298 6/2021 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers B.19 B.19 Control of exports - miscellaneous (A) Replacement goods, short shipments and goods under guarantee (i) Authorised Dealers must advise exporters that goods to be shipped in replacement of rejected or defective goods previously shipped or in completion of a previous short shipment may be exported under cover of the prescribed SARS Customs Declaration, provided that: (a) the full invoice value of the original shipment has been or will be received from the consignee; (b) the exporter is bound by guarantee or trade practice to make good the deficiency without charge; and (c) where applicable, the replaced goods are being destroyed, reimported or sold abroad for payment in foreign currency or Rand from a Non-resident Rand account in the name of the non-resident and/or Rand from a vostro account held in the books of the Authorised Dealer. (B) Export of advertising matter and trade samples (i) Authorised Dealers must advise exporters that advertising matter and trade samples on a no-charge basis may be exported under cover of the prescribed SARS Customs Declaration, provided that the goods are being shipped purely for advertising or promotional purposes. (C) Goods re-exported for repairs and adjustments (i) In the case of manufactured goods registered with Customs, for re-export to their country of origin for repairs or adjustments free of payment, the goods may be exported under cover of the prescribed SARS Customs Declaration. (D) Return of goods for which no payment has been made (i) Authorised Dealers must advise exporters that the return of goods to the original supplier, free of counter value or re-exports for the latter’s account, may be exported under cover of the prescribed SARS Customs Declaration. (E) Temporary export of goods into Africa (i) Authorised Dealers may advise exporters that the temporary export to African countries of used equipment, which is required by residents to enable them to fulfil any contractual obligations may be exported under cover of the prescribed SARS Customs Declaration, provided that the equipment is the contractor’s own property. 160 of 298 6/2021 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers B.19 (F) Export of defective goods for replacement (i) Authorised Dealers should advise residents that they are permitted, under cover of the prescribed SARS Customs Declaration, to re-export to the original supplier defective goods that have been paid for, provided that it can be shown from the production of documentary evidence that the foreign supplier has agreed to: (a) replace the consignment on a no-charge basis with goods of an equivalent value (in such cases the applicant must, if necessary, be in possession of a permit to cover the importation of the replacement goods); (b) refund the cost of the defective goods; or (c) provide a credit note for the full value of the defective goods. (ii) Exporters should be advised that the replacement goods should be imported within a reasonable time or that the foreign currency refund is transferred to South Africa in terms of the provisions of Regulation 6. (G) Export of postage stamps or philatelic items (i) The export of postage stamps and philatelic items must be regarded as a normal export transaction subject to the completion of the prescribed SARS Customs Declaration. Enquiries must, if needed, be referred to the Financial Surveillance Department. (ii) Authorised Dealers must advise their clients that postage stamps or philatelic items exported for exhibition purposes must be returned to South Africa within a period of six months. (H) Export of currency coins or numismatic items (i) Except as provided for in (ii) and (iii) below, all matters relating to the export of gold coins, currency coins and numismatic items must be referred to the Financial Surveillance Department. (ii) As an exception, Authorised Dealers may allow residents to export gold coins (excluding Krugerrand coins), currency coins and numismatic items within an overall limit of R300 per applicant per calendar year, subject to the completion of the prescribed SARS Customs Declaration. (iii) Authorised Dealers must advise their clients that currency coins and numismatic items exported for exhibition purposes must be returned to South Africa within a period of six months. 161 of 298 6/2021 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers B.19 (I) Export of motor vehicles from the CMA by non-residents (i) The exportation of motor vehicles belonging to non-residents, who have purchased the vehicles in the CMA and who wish to export their motor vehicles from the CMA either temporarily or permanently, is allowed provided the prescribed SARS Customs Declaration is completed. (J) Goods of non-South African origin paid for and re-exported (i) Goods imported into South Africa and paid for, may be exported subject to the completion of the prescribed SARS Customs Declaration. (K) Re-exports of goods of non-South African origin not paid for or ex-bond (i) Non-residents are permitted to take out of South Africa any vehicles and other goods brought into the CMA. (ii) Goods imported in bond may be exported ex-bond without the completion of any export declaration. (L) Final settlement - exports (i) Refunds may be effected to purchasers in countries outside South Africa representing final adjustments in respect of exports from South Africa (e.g. produce under-yields, weight adjustments), provided that evidence is produced showing that the full invoice price for the consignment has been received in foreign currency or in Rand from a Non-resident Rand account in the name of the non-resident and/or Rand from a vostro account held in the books of the Authorised Dealer. (M) Foreign customs duty (i) Where goods are exported on a delivered duty paid basis, Authorised Dealers may provide foreign currency in payment of the foreign customs duty against the production of documentary evidence confirming the amount involved. ---oOo--- 162 of 298 6/2021 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers B.20 B.20 Acceptance of foreign bank notes and foreign currency travellers cheques (A) Dispensation to travel agents, hotels, restaurants, shops and other entities whose business is directly related to the tourist industry (i) Authorised Dealers may authorise travel agents, hotels, restaurants, shops and other entities whose business is directly related to the tourist industry to accept foreign bank notes and foreign currency traveller’s cheques from visitors to South Africa in payment of goods supplied and services rendered against a written undertaking that such foreign currency will be sold to an Authorised Dealer not later than the following business day after acquisition thereof. (ii) A record of all transactions must be kept and be available for inspection by the Financial Surveillance Department. (iii) The authorised parties may not exchange currency offered by foreign tourists or any other party for Rand or any other currency without an underlying sale of goods and/or services rendered. (iv) Authorised Dealers must advise the Financial Surveillance Department of the names, addresses and nature of business of the parties to whom such authority has been granted on a monthly basis. (B) Dispensation for residents (i) Authorised Dealers may purchase foreign bank notes from residents who received the foreign bank notes from visitors to South Africa as payment for services rendered, gratuities, tips or gifts. (C) Dispensation for residents (i) Authorised Dealers should note that foreign bank notes or other foreign currency instruments such as traveller’s cheques may be accepted in payment of exports and services rendered. (ii) Resident exporters receiving payment in this manner must, however, declare and offer for sale such foreign currency to an Authorised Dealer not later than the following business day after acquisition thereof. (D) Foreign currency not purchased by Authorised Dealers (i) Any foreign currency offered for sale to an Authorised Dealer but not purchased by them must immediately be reported to the Financial Surveillance Department. ---oOo--- 163 of 298 6/2021 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers C. C. Gold (A) Export of gold jewellery by manufacturing jewellers (i) All applications for permission to export gold jewellery by manufacturing jewellers should be referred to the South African Diamond and Precious Metals Regulator in terms of the Precious Metals Act, 2005 (Act No. 37 of 2005). (ii) Exporters should be aware that: (a) the full sale proceeds of all exports must be received in South Africa in foreign currency or Rand from a Non-resident Rand account in the name of the non-resident and/or Rand from a vostro account held in the books of the Authorised Dealer; and (b) each shipment for export must be supported by the prescribed SARS Customs Declaration. (B) Other exports of gold (i) All applications for permission to export gold in any form should be referred to the South African Diamond and Precious Metals Regulator. (C) Acquisition of gold for trade purposes (i) The acquisition of gold for legitimate trade purposes by e.g. manufacturing jewellers, dentists, is subject to the approval of the South African Diamond and Precious Metals Regulator. (ii) After receiving such approval, a permit must be obtained from SARS which will entitle the permit holder to approach Rand Refinery Limited for an allocation of gold. (iii) The holders of gold, having received the approvals outlined above, are exempt from the provisions of Regulation 5(1). (D) Advances against gold (i) Payment of an instalment of the purchase price of gold sold to an Authorised Dealer is not regarded as an advance against gold and is permissible. (E) Krugerrand coins (i) Provided that the purchase consideration has been received in South Africa in foreign currency or Rand from a Non-resident Rand account in the name of the non-resident and/or Rand from a vostro account held in the books of the Authorised Dealer, up to 15 Krugerrand coins or the equivalent in fractional Krugerrand coins may be exported to 164 of 298 6/2021 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers C. non-residents supported by the prescribed SARS Customs Declaration. Non-resident visitors may export up to 15 Krugerrand coins or the equivalent in fractional Krugerrand coins, supported by the prescribed SARS Customs Declaration, provided that they can prove that the coins were acquired with the proceeds of foreign currency introduced. (ii) All applications from e.g. overseas banks, for large quantities of Krugerrand coins should be referred to Rand Refinery Limited. (F) Marketing of South African gold (i) South African gold producers may elect to sell their total gold output to approved counterparties, once exempted by the Financial Surveillance Department from the provisions of Regulation 5. (ii) The full export proceeds must be received in South Africa in foreign currency or Rand from a Non-resident Rand account in the name of the non-resident and/or Rand from a vostro account held in the books of the Authorised Dealer. (G) Applications for the importation of gold (i) All applications for the importation of gold must be referred to the South African Diamond and Precious Metals Regulator. ---oOo--- 165 of 298 6/2021 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers D.1 D.1 Forward cover or hedging transactions between Authorised Dealers and residents (A) General (i) The aim of hedging is either to offset or to minimise the risk of losses that an enterprise may be exposed to due to the effect of price changes on its assets, liabilities or future firm and ascertained commitments and/or accruals. (ii) Authorised Dealers must ensure that dealings in hedging instruments are not undertaken either for speculative purposes or as a means of circumventing the Regulations. (iii) Residents, excluding transactions by private individuals trading on online platforms may, however, subject to the conditions outlined in subsection (B)(i) below, hedge their foreign exchange risk in a controlled manner through the active management of their currency exposures in the over the counter foreign exchange market. (iv) This section of the Authorised Dealer Manual is concerned with the multiplicity of over the counter hedging instruments and techniques which are divided into the following main categories: (a) forward contracts; (b) futures contracts (excluding currency futures listed on a regulated exchange in South Africa); (c) options; (d) warrants; and (e) swaps. (v) Applications for spot foreign currency by residents to cover future commitments or accruals should normally be refused unless permission has been granted elsewhere in the Authorised Dealer Manual. The applicants must be informed of the permissible cover contracts which are obtainable by means of the relevant hedging instruments. (B) Foreign currency against Rand in respect of forward contracts or foreign exchange option contracts not exceeding 12 months to maturity (active currency management) (i) Foreign currency may be sold forward to or purchased forward from residents, excluding transactions by private individuals trading on online platforms, by either entering into a forward contract or a foreign exchange option contract with an Authorised Dealer, subject to the following conditions that: 166 of 298 6/2021 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers D.1 (a) The facilities are required to cover a direct underlying foreign currency exposure and to manage possible losses arising from adverse movements in foreign exchange rates from a transaction that is: (aa) permissible in terms of the Authorised Dealer Manual; (bb) in respect of a specific authority that has been granted by the Financial Surveillance Department; or (cc) in respect of a resident party actively managing foreign exchange risk exposure, inter alia, in respect of import payments, export proceeds, service type payments/receipts, tenders, acquisitions, balance sheet risk and loans. (b) While cover may not be granted for a period extending beyond 12 months, contracts may be entered into and exited at the client’s discretion and need not run until the commitment or accrual has to be met. (c) The same underlying commitment or accrual is not already covered forward. (d) In respect of all commitments or accruals, documentary evidence is exhibited at the time of pay away confirming the nature and extent of the commitment or that foreign currency is definitely accruing and the nature and extent of such accruals. (e) All settlements in terms of forward cover taken out by clients not resulting in the physical conversion of currency to and from Rand (i.e. the so called ‘in-between trades’ must take place in Rand). (f) Authorised Dealers facilitating the ‘in-between trades’ must furnish the Financial Surveillance Department with the following reports on a monthly basis: (aa) summary beneficial holdings trading report indicating volumes, value and ownership differentiating between the following investor classes: corporates, individuals, institutional investors and non-residents; and (bb) a report depicting the forward rates applicable to each contract concluded, supported by parallel graphs of trading volumes, number of contracts and value, specifically highlighting the impact of the ‘in-between trades’ on the foreign exchange market and the exchange rate of the Rand. (g) The reports must be submitted by sending an email to SARB-HEDGE@resbank.co.za, specifying the wording “Active Currency Management Report” in the subject field by the 7th of the 167 of 298 6/2021 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers D.1 following month. The beneficial holdings trading report must only reflect the ‘in-between trades’ where the client does not convert Rand into foreign currency and vice versa in terms of the contract forward rate but decides to rather settle the contract in Rand. Therefore, the reporting must exclude legitimate settlements in Rand (e.g. export proceeds). (ii) Institutional investors, as defined in section B.2(H) of the Authorised Dealer Manual, must take cognisance that any position held as a result of entering into the ‘in-between trades’ is regarded as foreign exposure and must accordingly be marked off against the prudential limit as well as being accounted for in the quarterly asset allocation reports. (iii) In respect of cover granted to local stockbrokers for foreign exchange transactions with non-residents on the JSE Limited, the period of such cover may not exceed 45 days from the date of the transaction as evidenced by brokers’ notes. (C) Foreign currency against Rand in respect of forward contracts or foreign exchange option contracts exceeding periods longer than 12 months (i) Foreign currency may be sold forward to or purchased forward from residents by either entering into a forward contract or a foreign exchange option contract with an Authorised Dealer, subject to the following conditions that: (a) The facilities are required to cover a firm and ascertained foreign exchange commitment due to a non-resident or a foreign exchange accrual due from and payable by a non-resident arising from a transaction either: (aa) permissible in terms of the Authorised Dealer Manual; or (bb) in respect of which a specific authority has been granted by the Financial Surveillance Department. (b) While cover may not be granted for a period extending beyond the due date of the underlying commitment or accrual, contracts may be entered into at any time after the commencement of the commitment or accrual for the full amount or part thereof and, in the circumstances outlined in subsection (F) below, need not run until the commitment or accrual has to be met. (c) The same underlying commitment or accrual is not already covered forward. (d) In respect of imports, the nature and extent of the import commitment must be confirmed by any one of the documents 168 of 298 10/2022 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers D.1 specified in section B.1(B) of the Authorised Dealer Manual or pro forma invoices, purchase orders, copies of import letters of credit or copies of order confirmations or, when such documents are not available, a letter signed by two responsible persons, whose names and titles should appear below their signatures, giving full details of the underlying commitment. The above letter, however, does not absolve the client from the requirements of (i) below. (e) In respect of the accrual of the proceeds of exports, the period of cover granted may not extend beyond six months from the date of shipment, except where the Authorised Dealer concerned or the Financial Surveillance Department has granted permission for such proceeds to be received after six months. In addition, cover may also be granted in respect of any pre-shipment period. (f) Where a dispensation has been granted by the Financial Surveillance Department to certain corporates from the requirement to submit documentary evidence for trade related foreign exchange transactions (the imports undertaking dispensation), such dispensation also applies when concluding forward or foreign exchange option contracts in respect of those transactions. (g) In respect of all other commitments or accruals, documentary evidence is exhibited confirming the nature and extent of that commitment or that foreign exchange is definitely accruing and the nature and extent of such accruals. (h) Where the required documentary evidence is not available at the time of establishment of a forward or foreign exchange option contract, such documentation be presented within 14 days. (i) All documentation submitted in evidence of the foreign exchange commitment or accrual in respect of which cover is availed of must indicate the contract number and the period of the contract. Furthermore, in respect of an import transaction where a letter has been submitted in terms of (d) above, the documents specified in section B.1(B) of the Authorised Dealer Manual or pro forma invoices, purchase orders, copies of import letters of credit or copies of order confirmations must subsequently be viewed. (j) Authorised Dealers may allow South African corporates to cover forward up to 75 per cent of budgeted import commitments or export accruals in respect of the following financial year, subject to the following conditions: (aa) all matured sales contracts must relate to firm and ascertainable underlying commitments and the underlying documentation must be viewed at the time of settlement, in accordance with the provisions of sections B.1(B) and (F) of 169 of 298 6/2021 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers D.1 the Authorised Dealer Manual; (bb) in respect of exports, all matured contracts must relate to firm and ascertainable underlying accruals and the requirements of section B.18 of the Authorised Dealer Manual must in each instance be adhered to; (cc) under no circumstances may the contracts be used as a mechanism to speculate against the Rand; (dd) proceeds of matured forward exchange sales contracts may only be credited to the applicant’s CFC account in terms of the provisions of section E.(B)(ii)(a)(ff) of the Authorised Dealer Manual; and (ee) any unutilised portion of the contracts must be swapped in terms of the provisions of subsection (F) below. The Authorised Dealer(s) with whom the applicant company transacts must ensure that the conditions outlined above are strictly adhered to. (k) Authorised Dealers must be furnished with a written letter from their clients, signed by two senior officials, confirming that the above conditions were adhered to, together with a detailed schedule of utilisation to ensure compliance with the limit authorised, prior to considering a request for the next financial year. (D) Foreign currency against foreign currency (i) Subject to the same conditions as set out in subsections (A), (B) and (C) above, Authorised Dealers may arrange cover on behalf of their clients in one foreign currency against another. (E) Transactions between Authorised Dealers (i) Authorised Dealers may, in respect of permitted cover contracts, marry such contracts and deals with one another, either spot or forward in any currency. (ii) In addition, Authorised Dealers may establish contra contracts on overseas foreign exchange markets or take their forward position into their spot position. (iii) Authorised Dealers may also offset such risk through the South African Futures Exchange. (F) Surrenders or extensions by means of swaps (i) Since forward or foreign exchange option contracts entered into in 170 of 298 6/2021 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers D.1 terms of subsection (C) above may only be concluded for firm and ascertained foreign exchange commitments or accruals and constitute a binding agreement between the parties concerned, such contracts may not be annulled prior to the maturity date. (ii) Should circumstances arise in which it is required to vary the delivery date of a forward or foreign exchange option contract or part thereof, surrenders, early take-ups or extensions may be allowed, subject to settlement taking place by means of a counter contract or swap. Any profits or losses arising from such action should be regarded as being for account of the client and the rate applied to the extension of such contracts may under no circumstances be adjusted to incorporate the relative profit or loss. (G) Hedging operations (i) Subject to the same conditions as set out in subsections (A), (C) and (E) above, Authorised Dealers may arrange cover with resident clients in respect of the risks mentioned below. (ii) Authorised Dealers are required to keep a register of all over the counter contracts traded and such register should be available at all times for inspection purposes by the Financial Surveillance Department. (iii) All trades must take place under International Swaps and Derivatives Association agreements with all individual trades being subsequently confirmed with a transaction form stating who the Granter (Seller) and Grantee (Purchaser) of the products are. (iv) With the exception of subsection (v)(b)(bb) below, residents who wish to hedge directly with an offshore counterparty require the prior written approval of the Financial Surveillance Department. (v) Risks for which cover may be arranged with resident clients: (a) Interest rates (aa) Authorised Dealers may cover their clients’ firm and ascertained exposure to possible losses as a result of adverse movements in interest rates arising from an underlying transaction. (bb) Such an interest rate hedge may be arranged by way of a futures contract on fixed-income securities or time deposits, including forward rate agreements, an interest rate options contract or an interest rate swap. An interest rate hedge in any other form may only be entered into after the prior written approval of the Financial Surveillance Department has been obtained. 171 of 298 10/2025 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers D.1 (b) Price risk (aa) Commodities (1) Commodity futures and commodity option contracts with resident clients may be entered into, provided that they are quoted and traded on the JSE Limited. (2) The terms and conditions pertaining to dealings by non-residents on the JSE Limited are incorporated in their Rules and Regulations. (bb) Agricultural commodities (1) Authorised Dealer may allow resident agricultural commodity producers (agribusiness companies whose core business is the buying, selling or trading of raw materials or primary products as well as the management of commodities from origin through to the final customer) and end-users with firm commitments to hedge their foreign exposures on foreign commodity exchanges and/or a recognised member or broker of the foreign commodity exchange, subject to the following conditions: (i) Local producers and end users of agricultural commodities may only enter into hedging contracts abroad in order to induce certainty regarding their foreign exposure risks. (ii) No speculative deals may be entered into, therefore the applicant should provide details of the underlying transactions and confirmation that the hedging relates to a firm underlying commitment or accrual. (iii) Should it be necessary for the local producer/end user to transfer any funds abroad in respect of losses incurred, payment may only be effected against substantiating documentation, e.g. invoices from foreign broker/agent providing full details/description of hedging transaction and/or details of losses incurred. 172 of 298 10/2025 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers D.1 (iv) The requirements of Exchange Control Regulation 6 must also be adhered to, when applicable. (v) At the end of each 12-month period, the Financial Surveillance Department must be furnished with a summary of the transactions entered into reflecting, inter alia, amounts transferred abroad and amounts received, together with confirmation that no speculative positions were taken during the period under review. ---oOo--- 173 of 298 10/2025 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers D.2 D.2 Forward cover transactions between Authorised Dealers and non-residents (A) General (i) The aim of hedging is either to offset or to minimise the risk of losses that an enterprise may be exposed to due to the effect of price changes on its assets, liabilities or future firm and ascertained commitments and/or accruals. (ii) Authorised Dealers must ensure that dealings in hedging instruments are not undertaken for speculative purposes or as a means of circumventing the Regulations. (B) Forward cover transactions between Authorised Dealers and non-residents (i) Forward purchase and/or sale of Rand (a) In addition to the criteria outlined in subsection (A) above, non-residents may purchase or sell Rand forward in the domestic foreign exchange market, subject to the conditions that: (aa) The Rand bought or sold on this basis by the non-resident must purely be aimed at hedging the non-resident against a firm and ascertainable underlying local commitment or accrual which is denominated in Rand and which is either: (1) permissible in terms of the Authorised Dealer Manual; or (2) in respect of which a specific authority has been granted by the Financial Surveillance Department; or (3) in respect of a non-resident party actively managing foreign exchange risk exposure. (bb) While cover may normally not be granted for a period extending beyond 12 months, contracts may be entered into and exited at the client’s discretion and need not run until settlement of the commitment or accrual. (cc) The same underlying commitment or accrual is not already covered forward. (dd) Non-resident counterparties who are foreign subsidiaries or branches of South African corporates or other South African entities, including foreign subsidiaries or branches of Authorised Dealers who wish to transact in Rand hedging for 174 of 298 6/2021 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers D.2 its own account, present to the Authorised Dealer a copy of a specific approval from the Financial Surveillance Department granting permission for such a non-resident to enter into the Rand hedge transaction, plus suitable documentation confirming that an underlying Rand denominated commitment or accrual is in place. (ee) In respect of hedging contracts for periods longer than 12 months, suitable documentation confirming that an underlying Rand denominated commitment or accrual is in place, is viewed on the settlement date. (ff) ‘Suitable documentation’ as mentioned in (ee) above confirming the underlying transaction would in most instances be the official and binding document used between the contracting parties as evidence of the underlying transaction (e.g. a broker’s note for the sale or purchase of local listed securities by the non-resident). (gg) All settlements in terms of forward cover taken out by non-residents not resulting in the physical conversion of currency to and from Rand, i.e. the so called ‘in-between trades’ must be reported to the Financial Surveillance Department on the same basis as outlined in section D.1(B)(i)(f) and (g) of the Authorised Dealer Manual. (ii) General information on trading parameters (a) Non-resident correspondent banks are free to deal in the spot foreign exchange market. Spot transactions must, however, be settled on the original spot value date. (b) Foreign exchange swap transactions by non-resident correspondent banks with Authorised Dealers involving the funding of short Rand positions may only be undertaken by non-resident correspondent banks in respect of their assets, liabilities or underlying firm and ascertainable exposures, commitments or accruals. (c) Transactions that involve the outright purchase of Rand for purposes of making an investment constitute an exposure that can be hedged against exchange rate risk. Thus correspondent banks can create Rand on the swap for purposes of funding their nostro accounts. (d) Swap transactions in the forward market with the sole purpose of trading an interest rate view and which do not involve the financing of a short Rand position are acceptable. 175 of 298 6/2021 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers D.2 (C) Foreign currency against foreign currency (i) Subject to the same conditions as set out in subsections (A) and (B) above, Authorised Dealers may arrange cover on behalf of their clients in one foreign currency against another. (D) Surrenders or extensions by means of swaps (i) Since forward or foreign exchange option contracts entered into in terms of subsection (B)(i)(a)(ee) above may only be concluded for firm and ascertained Rand denominated commitments or accruals and constitute a binding agreement between the parties concerned, such contracts may not be annulled prior to the maturity date. In the case of optional contracts, the contract matures once the full amount has been taken up, which may be prior to the final delivery (maturity) date mentioned in the contract. (ii) However, should circumstances arise in which it is required to vary the delivery date of a forward or foreign exchange option contract or part thereof, surrenders, early take-ups or extensions may be allowed, subject to settlement taking place by means of a counter contract or swap. Any profits or losses arising from such action should be regarded as being for the account of the client and the rate applied to the extension of such contracts may under no circumstances be adjusted to incorporate the relative profit or loss. (E) Hedging operations (i) Subject to the same conditions as set out in subsections (A) and (B) above, Authorised Dealers may arrange cover with non-resident counterparties in respect of the risks mentioned below. (ii) Authorised Dealers are required to keep a register of all over the counter contracts traded and such register should be available at all times for inspection purposes by the Financial Surveillance Department. (iii) All trades must take place under International Swaps and Derivatives Association agreements, with all individual trades being subsequently confirmed with a transaction form stating who the Granter (Seller) and Grantee (Purchaser) of the products are. (iv) Risks for which cover may be arranged with non-resident counterparties: (a) Interest rates (aa) Authorised Dealers may cover their clients’ firm and ascertained exposure to possible losses as a result of adverse movements in interest rates arising from an 176 of 298 6/2021 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers D.2 underlying transaction. (bb) Such an interest rate hedge may be arranged by way of a futures contract on fixed-income securities or time deposits, including forward rate agreements, interest rate option contracts or interest rate swaps. (cc) An interest rate hedge in any other form may only be entered into after the prior written approval of the Financial Surveillance Department has been obtained. (b) Price risk (aa) All contracts and instruments such as gilts, equity options and index-linked hedging instruments and warrants written by non- resident institutions and subscribed to by residents, excluding Authorised Dealers, must be referred to the Financial Surveillance Department on a case-by-case basis. (bb) Once approval has been granted, all cross-border cash flows must be settled in foreign currency or Rand from a Non-resident Rand account in the name of the non-resident and/or Rand from a vostro account held in the books of the Authorised Dealer. (c) Credit risk (credit derivatives) (aa) Authorised Dealers may enter into credit derivative transactions with non-resident counterparties in order to offer such non-residents protection on Rand denominated securities acquired in or debt advanced to the domestic markets. (bb) Credit exposures resulting from foreign currency denominated loans advanced by non-residents to residents for domestic employment may also be assumed by Authorised Dealers. (cc) No credit derivative transactions may be entered into with non- residents in respect of foreign currency denominated securities issued by residents or securities (including Rand denominated) issued by non-residents, except as provided for in sections B.2(I) and D.1(B) of the Authorised Dealer Manual. (dd) Authorised Dealers may also enter into credit derivative transactions with non-resident banks in order to reduce such Authorised Dealers’ credit risk exposure as a result of the above-mentioned transactions with non-residents or transactions with residents. (ee) Where it is necessary for non-residents to place collateral with Authorised Dealers in respect of any credit derivative 177 of 298 6/2021 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers D.2 transaction, only cash cover in Rand or the pledge of other unencumbered non-resident owned local Rand denominated assets is allowed. (ff) Authorised Dealers may place funds in margin accounts or as collateral with non-resident banks as a result of permissible derivative transactions. Such funds must, however, form part of the foreign currency holdings of Authorised Dealers. (gg) Authorised Dealers are only allowed to enter into credit derivative transactions in order to reduce credit risk exposures resulting from genuine underlying transactions. Documentary evidence must be viewed confirming the nature and extent of the underlying exposure. It follows that such transactions are not allowed for pure trading and speculative purposes. (hh) Authorised Dealers are required to keep a register of all credit derivative contracts entered into and such register should be available at all times for inspection purposes by the Financial Surveillance Department. All transactions must take place in terms of International Swaps and Derivatives Association agreements or International Swaps and Derivatives Association confirmations. All individual transactions must subsequently be confirmed with a transaction form stating the name and domicile of the protection seller and protection buyer and signed undertakings by both parties that the premium or margin requirements reflected in the International Swaps and Derivatives Association agreement, are payable and receivable wholly in terms of that agreement and do not relate to any other agreement between the two parties. ---oOo--- 178 of 298 6/2021 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers E. E. Non-resident Rand account, Customer Foreign Currency accounts, foreign currency accounts and foreign bank accounts (A) Non-resident Rand accounts (i) Transactions over Non-resident Rand accounts (a) Rand accounts opened by non-residents must be designated and conducted as Non-resident Rand accounts. (b) Authorised Dealers must refer any transactions other than those specified in the table below that pass through these accounts, to the Financial Surveillance Department. Debits Credits (1) Rand payments to residents for (1) The proceeds of sales of any purpose. foreign currency made by a non-resident to an Authorised Dealer. (2) Payments to other Non-resident (2) Payments from other Non- Rand accounts. resident Rand accounts. (3) Payment for foreign currency (3) Rand payments that are purchased. eligible for transfer abroad in terms of the applicable sections of B.1 through to B.20, as well as G. of the Authorised Dealer Manual or for which approval of the Financial Surveillance Department has been obtained and after all requirements have been met. (4) Rand payments to the account (4) Re-deposits of unused Rand holder while visiting the CMA. withdrawn while visiting the CMA. (5) Rand payments in respect of (5) Capital and interest payments investment in local debt on foreign loans. instruments in terms of the provisions of section G.(D) of the Authorised Dealer Manual. (6) Transactions by Authorised Dealers in terms of section B.2(I) of the Authorised Dealer Manual. (7) Foreign loans to residents. 179 of 298 11/2025 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers E. (c) All transactions not specified above, require prior written approval from the Financial Surveillance Department. (ii) Control over Non-resident Rand accounts (a) Authorised Dealers are requested to exercise extreme care over deposits to Non-resident Rand accounts. Such accounts must be kept separately under the supervision of a responsible officer conversant with the principles and provisions of the Authorised Dealer Manual. (b) Non-resident Rand accounts may not be overdrawn without the permission of the Financial Surveillance Department, except as provided for in section B.2(I) of the Authorised Dealer Manual. However, Authorised Dealers are permitted to use their discretion in allowing occasional overdrafts (as a result of clerical, transmission or operational errors) on the non-resident clearing accounts of foreign banks (vostro accounts) held in their books. It is, however, incumbent on the Authorised Dealer to advise the foreign bank concerned of such overdraft immediately and to request rectification thereof. (c) Authorised Dealers are requested to advise the Financial Surveillance Department of all cases where the clearing accounts of foreign banks are regularly overdrawn in amounts of R25 million and over, or where the provision of cover is unduly delayed (i.e. beyond two business days from the date that the account went into overdraft). Cover for bank charges and other transactional expenses may continue to be provided on a periodic basis. (d) A change request must be submitted by the Authorised Dealer on the Loan Reporting System, confirming that loan funds will be received from a Non-resident Rand account. In addition, the Authorised Dealer must submit a change request on the Loan Reporting System of any drawdowns from the Non-resident Rand account as well as any capital or interest payments to the Non- resident Rand account. Also see section I.3(B)(iv)(a)(ii) of the Authorised Dealer Manual. (iii) Transfer of non-resident funds between Authorised Dealers The transfer of non-resident funds between Authorised Dealers is only permitted by means of the appropriate authenticated SWIFT message types. For all Rand transfers, the originator must quote the following in field 72:/REC/NTNRC. Settlement will be effected via ZAPS (South African Payment System) or SAMOS (South African Multiple Option Settlement). 180 of 298 11/2025 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers E. (B) Customer Foreign Currency accounts (i) Authorised Dealers may open CFC accounts for the following South African entities (legal persons): (a) CFC account holders include: (aa) importers and exporters of goods; (bb) ADLAs; (cc) locally recognised ships’ agents; (dd) freight forwarders; (ee) marine insurance brokers; (ff) any South African entity, with the exception of those entities authorised in terms of the provisions of section B.20 of the Authorised Dealer Manual, that provides a service in South Africa to non-residents and who receives payment in foreign currency in South Africa; (gg) local entities (i.e. legal persons) involved in foreign business transactions whereby they become entitled to commissions or profit in foreign currency as a direct result thereof (e.g. merchanting trade in accordance with section B.12(A) of the Authorised Dealer Manual, insurance brokers, stockbrokers, tour wholesalers or operators). It should be noted that such CFC accounts may not be overdrawn without prior written approval from the Financial Surveillance Department unless authorised elsewhere in the Authorised Dealer Manual; and (b) Special CFC account holders include: (aa) the insurance industry to cater for foreign currency working balances in terms of section B.10(D)(iii) of the Authorised Dealer Manual; (bb) local entities involved in the importation and exportation of rough diamonds, crude oil, wrought gold and/or steel. Separate CFC accounts clearly designated as Special CFC accounts may, on application to an Authorised Dealer, be opened for these local entities (i.e. legal persons), to facilitate the local settlement in foreign currency between such account holders in respect of transactions which will result or have resulted in the direct importation and/or exportation by one of the entities involved of rough diamonds, crude oil, wrought gold and/or steel. The following provisions must at all times be 181 of 298 10/2022 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers E. strictly adhered to: (1) no more than two local entities (i.e. one buyer and one seller) may be party to any transaction to be so settled and both parties must obtain permission from their respective Authorised Dealers to conduct Special CFC accounts for such transactions; (2) one of the parties to transactions to be so settled must be a registered importer and/or exporter of the commodity in question. The Authorised Dealer of the importer and/or exporter should be presented with suitable documentary evidence to this effect; (3) the commodities to be so acquired must be destined for exportation or importation by one of the parties concerned and documentary evidence to this effect should be presented to the Authorised Dealer in whose books such a party conducts or wishes to conduct a Special CFC account; (4) only the aforementioned transactions may be settled over such Special CFC accounts; (5) only the party that will have to convert Rand to foreign currency in order to settle such transactions may be permitted to hedge its exposure in respect of the particular transactions. It follows that the party that will export or import the commodities may not be permitted to enter into hedging transactions in respect of their accruals or commitments resulting from such transactions; and (6) Authorised Dealers should ensure that all other provisions of the Authorised Dealer Manual regarding imports, exports and hedging are fully complied with; and (cc) local entities who are oil and gas right holders and whose sole trade relates to exploration and production (i.e. extraction only) may open and conduct CFC accounts without any restriction on the nature of transactions passing over the account, provided that all requirements relating to reporting, in terms of the Reporting System, are adhered to. (c) The opening of CFC accounts for any other purpose requires prior written approval from the Financial Surveillance Department. (ii) Control over CFC accounts 182 of 298 6/2021 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers E. (a) The above-mentioned accounts are subject to the following conditions: (aa) these accounts must form part of the bank’s nostro account administration and accordingly the client cannot operate on it other than through and with the full cognisance and approval of the Authorised Dealer concerned. Clients are permitted to retain funds in their CFC accounts without the obligation to convert the funds into Rand. The current repatriation requirement remains extant; (bb) only foreign exchange transactions concluded in the name of the account holder and which qualifies as a permissible credit and/or debit, may be passed over these accounts; (cc) all transactions must comply fully with the provisions of the Authorised Dealer Manual or the provisions of specific authorities from the Financial Surveillance Department; (dd) hedging transactions may be entered into for specific import payments and the maturity proceeds used to replenish an overdrawn CFC account. Foreign currency may also be purchased in the spot market to replenish an overdrawn CFC account; (ee) for compliance purposes, both the account holder and the Authorised Dealer must maintain an audit trail of all set offs; (ff) foreign currency purchased in the spot market for permissible transactions in respect of a firm and ascertainable underlying commitment or the maturity proceeds of hedging contracts may only be credited to a CFC account if the funds are to be transferred abroad within a period of 30 days. Authorised Dealers must ensure that this dispensation is not abused; (gg) when permitting the transfer of funds between CFC accounts at different Authorised Dealers, such transfers may only be by means of the appropriate SWIFT client transfer message type. The following provisions should also be adhered to: (1) if proceeds are transferred between CFC accounts, Field 72 of the appropriate SWIFTS client transfer message type should clearly indicate ‘TRF SPOT’ and/or ‘TRF HEDGE’. In the event of funds being transferred in bulk, this information should be broken down into the specific amounts, making up the total transferred; (2) the Authorised Dealer receiving funds for credit to a CFC account from another Authorised Dealer may not accept 183 of 298 10/2022 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers E. such funds if Field 72 does not indicate, inter alia, the date on which the funds were originally credited to the CFC account; (3) transfer of foreign currency, which was not acquired by means of a spot transaction or from the maturity of hedging contracts, should be reflected in Field 72 as ‘TRF FROM ABROAD’; (4) transfer between local entities in settlement of transactions in rough diamonds, crude oil, wrought gold and steel, should be reflected in Field 72 as ‘TRF 4 COMMODITIES’; and (5) the authority number should be reflected in Field 72 in the event of funds being transferred between CFC accounts in terms of specific authorities granted by the Financial Surveillance Department; (hh) if a CFC account has been debited in respect of bridging finance, no forward cover may be availed of as the account may only be replenished by means of proceeds received from abroad; (ii) where a group of companies operates CFC accounts, the South African parent company may consolidate the group’s earnings and any local subsidiary may utilise the funds, provided that the group operate through a centralised treasury located in South Africa; and (jj) interest earned on CFC accounts may be retained in such accounts and be used for set off purposes. (iii) Permissible set offs/debits over CFC accounts (a) The following payments may be settled from single CFC account balances: (aa) imports and software electronically downloaded, including all costs related thereto; and (bb) all legitimate current account payments may be permitted by an Authorised Dealer to be paid from a CFC account. All capital account payments, inter alia loans, equity and dividends, are excluded. (b) The payments referred to above may only be processed provided that the Authorised Dealer concerned has satisfied itself that the transactions are permissible in terms of the various sections of the 184 of 298 15/2024 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers E. Authorised Dealer Manual or in respect of which a specific authority has been granted by the Financial Surveillance Department. (c) In instances where foreign currency is purchased in the spot market for permissible transactions in respect of a firm and ascertainable underlying commitment or the maturity proceeds of hedging contracts are credited to a CFC account, the onus is on clients of Authorised Dealers to ensure that such funds are transferred abroad within a period of 30 days. Authorised Dealers must ensure that this dispensation is not abused. (iv) Exemptions (a) Freight payments that are expressed in foreign currency and are directly related to a specific import or export transaction may be settled between local entities (i.e. legal persons) in foreign currency. (b) Similarly, importers who do not conduct a CFC account or who have no inflow of foreign currency may purchase foreign currency in the spot market to pay freight charges to another resident provided that such resident has an obligation to pay freight charges in foreign currency. (c) Foreign currency held by a locally recognised ships’ agent (including cash to master transactions), freight forwarder, marine insurance broker or tour wholesaler or operator for the ultimate benefit or account of a non-resident entity (e.g. a ship’s owner, freight forwarder, insurance broker or insurance entity abroad) need not be offered for sale to an Authorised Dealer. These funds may be retained in a CFC account until distribution on behalf of or remittance to the non-resident beneficiary abroad. Authorised Dealers must ensure that this concession is not abused. (d) If the account holder is required to pay any interest on an overdrawn account by converting Rand into foreign currency, this may be permitted in the spot market. (v) Settlement, on an agent basis, in foreign currency between resident entities over CFC accounts (a) Authorised Dealers may allow local agents of exporters of goods from South Africa to settle export proceeds over CFC accounts of resident exporters, subject to the following conditions: (aa) The applicant company must act as an agent for the exporter. (bb) All settlements in foreign currency for goods exported must be over CFC accounts. 185 of 298 15/2024 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers E. (cc) At the time of settling the export proceeds over the CFC account, the onus rests on the local agent to present an Authorised Dealer, where the agent’s CFC account is kept, with the local exporter’s invoices reflecting the net amount (less the agent’s commission) that are to be settled to the local exporter’s CFC account concerned. (dd) Kindly note that the local agent may not fund its own CFC account from South Africa and where applicable, may in need only hedge the exchange rate exposure in respect of the commission portion to be earned from the export proceeds. (ee) The producer of the goods exported may, provided it is its intention to convert the export proceeds to Rand, cover forward its own exchange rate exposure. (ff) When permitting the transfer of funds between CFC accounts at different Authorised Dealers, such transfers may only be made by means of the appropriate SWIFT client transfer message type as explained in section E.(B)(ii)(a)(gg) of the Authorised Dealer Manual. (b) Resident entities, excluding state-owned companies, purchasing goods from local suppliers that have to import certain or all of the components from abroad, may settle only the cost of the imported component(s) in foreign currency over the respective CFC accounts, subject to the following conditions: (aa) The applicant company must act as an agent and/or facilitator for the local end-user and/or importer in respect of the importation of the goods. (bb) Settlement may not be in respect of any other domestic value-added process, for example installation fees, domestic enhancement of the imported goods before delivery, domestic transportation fees, domestic customisation of imported goods, etc. (cc) The provisions of section E.(B) of the Authorised Dealer Manual must be adhered to. (dd) Only the party that will have to convert Rand to foreign currency to settle such transactions may be permitted to hedge its exposure in respect of the particular transactions. The party facilitating the importation of the goods will not be permitted to enter into hedging transactions in respect of the foreign commitments resulting from such transactions. 186 of 298 10/2022 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers E. (c) Authorised Dealers should ensure that all other provisions of the Authorised Dealer Manual regarding imports, exports and hedging are fully complied with. In this regard, where an import transaction is being processed and limited documentation is available such as only an invoice, the transaction may be finalised. (d) Authorised Dealers may approve the extension or renewal of authorities previously granted by the Financial Surveillance Department in respect of local settlement in foreign currency between residents over CFC accounts, excluding requests involving state owned entities. (e) Authorised Dealers may only process such requests when they have satisfied themselves that the circumstances surrounding the previous authority granted by the Financial Surveillance Department, except for the limit, remain unchanged and that the terms and conditions of the previous authority have been fully complied with. (C) Foreign currency accounts (i) Foreign currency accounts may be opened for private individuals (natural persons) resident in South Africa for transactions permissible in terms of the Authorised Dealer Manual and for non-residents. (ii) Foreign currency accounts may be opened for institutional investors for the purpose of obtaining offshore exposure in terms of the prudential limit. See subsection B.2(H)(vi)(p) of the Authorised Dealer Manual. (D) Foreign bank accounts (i) Authorised Dealers may approve requests by South African companies to open and operate foreign bank accounts, subject to the following conditions: (a) only South African companies that have legal/bona fide sources of income abroad are permitted to open foreign bank accounts; (b) all foreign credits to such bank accounts are subject to the provisions of Regulation 6, except in respect of foreign earned dividends which are exempted from the aforementioned Regulation; (c) funds that accrue in foreign bank accounts must be in respect of transactions permissible in terms of the Authorised Dealer Manual or a specific authority granted by the Financial Surveillance Department; (d) applicants must provide a written undertaking to the Authorised Dealer approving the bank account confirming that no debits other than transfers to South Africa, debits permissible in terms of a 187 of 298 13/2026 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers E. specific authority from the Financial Surveillance Department or bank charges, will be passed over the foreign bank accounts; and (e) applicants must ensure that the foreign bank accounts have been conducted within the ambit of the aforementioned conditions. (ii) The Financial Surveillance Department reserves the right to instruct the applicant company to close any foreign bank account and for any funds accumulated therein to be repatriated to South Africa in the event of the above-mentioned conditions in (i) above not being complied with. At the time of approving the opening of the foreign bank account, Authorised Dealers must report the following to the Financial Surveillance Department: (a) the name and registration number of the applicant company; (b) domicile of where the foreign bank account has been opened; (c) the account holder and account number; and (d) the purpose of opening the foreign bank account. (iv) Authorised Dealers may, where applicable, approve the extension of the authorities previously granted by the Financial Surveillance Department provided the conditions stipulated in (i) above are strictly adhered to. ---oOo--- 188 of 298 13/2026 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers F.1 F.1 Negotiable instruments denominated in Rand and Rand notes (A) Cheques, dividend warrants and drafts (i) The remittance to points outside South Africa of cheques, dividend warrants and drafts in Rand contravenes Regulation 3(1)(d) and such instruments presented to Authorised Dealers’ overseas branches, offices and subsidiaries should not be negotiated but accepted for collection only. The remittance of the proceeds by the drawee bank is dependent on the production of documentary evidence that the transaction is permissible in terms of the Authorised Dealer Manual. (ii) Bank drafts issued in Rand by Authorised Dealers are, however, exempted from the provisions of Regulation 3(1)(d) and may be honoured when presented for payment. The production of documentary evidence confirming that transactions are permissible in terms of the Authorised Dealer Manual is still applicable when issuing bank drafts. (B) Import and export of Rand notes (i) As the import and export of Rand notes are prohibited (except as provided for in section B.11 of the Authorised Dealer Manual), Authorised Dealers should not accept such notes received from points outside South Africa. (ii) However, the proceeds of Rand notes repatriated from SADC members, excluding CMA members, may be remitted on the production of documentary evidence confirming that they were not exported from South Africa in contravention of the Regulations. In this regard, it would meet the requirements of the Financial Surveillance Department if consignments of notes are accompanied by the confirmation of the repatriating bank that the notes were acquired from bona fide travellers from South Africa in amounts not exceeding R100 000 per person. (iii) For statistical purposes, Authorised Dealers must advise the Financial Surveillance Department monthly of all amounts of Rand notes received from the aforementioned countries. The figures furnished must indicate the source from which the notes were received and the number of notes in each denomination. ---oOo--- 189 of 298 8/2026 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers F.2 F.2 Assignment to Treasury of the right to goods exported and imported (A) Exports (i) Whenever goods have been exported from South Africa and the exporter has either failed to sell those goods or has not received payment in respect thereof within six months from the date of export, the exporter must within 14 days from the date of expiry of the six-month period, report the matter to the Treasury or to an Authorised Dealer. (ii) In the absence of a satisfactory explanation for such failure, the Treasury may, in terms of the provisions of Regulation 11(1), order the exporter to assign to the Treasury the right to such goods. (B) Imports (i) Whenever goods have been purchased and paid for outside South Africa, but which goods have not been consigned to South Africa within four months of the date of payment, the importer must within 14 days from the date of expiry of the four-month period, report the matter to the Treasury or to an Authorised Dealer. (ii) In the absence of a satisfactory explanation for the delay in the shipment of the goods, the Treasury may, in terms of Regulation 12(1), order the importer to assign to the Treasury the right to such goods. (iii) For the purposes of Regulation 12, goods held in bond abroad are not regarded as having been shipped to South Africa. (C) Exemptions (i) Authorised Dealers may, at their discretion, both in the case of exports and imports, grant short extensions of the periods referred to in Regulations 11 and 12, provided that they are satisfied that the goods will be sold, or in the case of imports received in South Africa within a reasonable period, that the delay in the sale or shipment is due to factors outside the control of the local merchant, and that no intentional circumvention of the Regulations is involved. (ii) Authorised Dealers should diarise import and export transactions to ensure compliance with these Regulations and should render monthly returns of all exemptions granted to their clients under this paragraph to the Financial Surveillance Department, furnishing details of: (a) the name of the importer and exporter; (b) date of payment or of export; (c) amount of payment or declared value of export; and 190 of 298 6/2021 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers F.2 (d) the reason for delay in shipment or, in the case of exports, of the repatriation of the export proceeds. (D) Assignments (i) In the event of an exemption being refused, the Treasury would instruct the importers and/or exporters to assign their right to the goods held outside South Africa to their Authorised Dealer, who would be requested to dispose of the goods to best advantage. (ii) The sum payable as consideration for any assignment would be the amount realised, less the cost of realisation. ---oOo--- 191 of 298 6/2021 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers G. G. Securities control Index (A) Control over dealings by residents in securities owned by non-residents or in which such persons have interest (i) Exchange Control Regulations (ii) Definitions (iii) General (iv) Existing holdings of non-resident owned securities in certificated form (v) Securities purchased by non-residents and not dematerialised or immobilised in a CSD (vi) Initiation of the dematerialisation and immobilisation process and subsequent trading in this environment (vii) Duties of banks (viii) Duties of CSDPs and Settlement Agents (ix) Duties of members of the JSE Limited (x) Duties of transfer secretaries (B) Financial Surveillance Department requirements relating to the JSE Limited (i) The listing of a South African registered company on the JSE Limited (ii) Capitalisation issues (iii) Reverse listings (iv) The issue of shares for cash (v) Rights issues or claw-back offers by listed companies (vi) The acquisition by non-residents of a ‘cash company’ (vii) The acquisition from or disposal to a non-resident of assets by a listed company (viii) The listings requirements of the JSE Limited (C) South African assets owned by non-residents (D) Investments by non-residents in South African debt securities (i) Subscription to and/or purchase of government, municipal and public utility stocks (ii) Subscription to and/or purchase of treasury bills, parastatal project bills, bankers’ acceptances, promissory notes and negotiable certificates of deposit (iii) The local issue, listing and/or purchase of debt securities requiring prior written approval. (E) Advances to non-residents (i) Advances, including those in respect of securities dealings (ii) Switch transactions (iii) Repurchase agreements 192 of 298 6/2021 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers G. (iv) Securities lending (F) Endorsements (i) Non-resident interest of any nature (ii) Residents of the CMA - foreign address (iii) Bonus shares (iv) Government, municipal and public utility stocks (v) Shares of foreign companies quoted on the JSE Limited (vi) Documents of title other than scrip (G) Export of securities (i) Export by non-residents (ii) Re-export by transfer secretaries (iii) Export of securities acquired in switch deals (H) Address (i) Deceased estates outside the CMA (ii) Nominees (iii) Address in South Africa (iv) Foreign companies with offices in South Africa - change of ownership and address (v) Duties of transfer secretaries (I) Income (i) Due to non-residents (ii) Due to residents (J) Emigrants, immigrants and deceased estates (i) Emigrants (ii) Immigrants (iii) Deceased estates (K) Dealings by residents on foreign stock exchanges (i) Sales (ii) Purchases (iii) Arbitrage (iv) Primary listings offshore (v) Offshore secondary listings and depository receipt programmes (L) General (i) Nominees for non-residents (ii) Brokerage rebates due to non-resident stockbrokers 193 of 298 6/2021 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers G. (M) Bearer securities (i) Regulations (ii) Companies authorised to issue (iii) Conditions of issue - share or stock warrants to bearer (N) The Derivatives Market of the JSE Limited (O) Dual listings of entities within SADC and SADC Depository Receipt on the JSE Limited 194 of 298 6/2021 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers G. (A) Control over dealings by residents in securities owned by non-residents or in which such persons have an interest (i) Exchange Control Regulations (a) The regulations governing dealings in securities owned by non- residents are set out in Regulations 14 and 15. (b) The attention of Authorised Dealers is drawn to the provisions of, inter alia, Regulation 10(1)(c). In this regard, it is essential that all securities related transactions between a resident and a non-resident or emigrant whereby capital or any right to capital is directly or indirectly exported from South Africa, are carefully scrutinised. Documentary evidence such as brokers’ notes or validated trade advices and auditors’ certificates, where applicable, must be viewed in order to ensure that such transactions are concluded at arm’s length and at fair and market related prices. In the case of any doubt on the part of the Authorised Dealer or Authorised Bank concerned, the proposed transaction must be referred to the Financial Surveillance Department. (c) Residents of Lesotho, Namibia and eSwatini are also regarded as residents for purposes of securities control. (ii) Glossary of terms (a) For purposes of the application of this section of the Authorised Dealer Manual, unless the context otherwise indicates, the following definitions should be applied: (aa) Authorised Bank means a person authorised by the Financial Surveillance Department to effect and cancel non-resident endorsements. (bb) Authorised Dealer means a person authorised by the Treasury to deal in foreign exchange and to effect non-resident endorsements. (cc) BDA is the Broker Dealer Accounting system operated and controlled by the JSE Limited. (dd) Certificated Securities are securities issued in paper form. (ee) Controlled Securities means: (1) any security that is registered in the name of a non- resident or of which a non-resident is the owner or in which a non-resident has an interest; and 195 of 298 6/2021 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers G. (2) any security acquired from a non-resident or acquired outside the CMA, by any person, irrespective of the residence of such person. (ff) CSA means Custody and Settlement Agent appointed by a broking member (equities) in terms of Directive FL issued by the JSE Limited, to exercise custody over that member’s managed account, safe custody and controlled account assets, and to effect settlement of certificated and uncertificated securities on behalf of that member and its clients. (gg) CSD means central securities depositories. (hh) CSDP means a duly appointed participant in a central securities depository. (ii) CSM means a custody and settlement member of the JSE Limited who has been appointed in terms of the rules and on behalf of its clients and/or another member and that member’s clients: (1) exercises custody over managed accounts, safe custody and controlled account assets; and (2) effects settlement of uncertificated and certificated securities. (jj) Settlement authority means the person or persons appointed by the JSE Limited to manage the settlement of transactions in uncertificated securities effected through the trading system of the JSE Limited in terms of the rules and directives, as well as the CSD rules. (kk) Stockbroker means a natural person who is a member or who is an officer or employee of a member and who is authorised and qualified under the rules of the exchange concerned to be a stockbroker. (ll) Stock exchange means any association licensed in terms of section 10 of the Securities Services Act, 2004 (Act No. 36 of 2004). (mm)STRATE means Share Transactions Totally Electronic Limited, a public company registered as a CSD in terms of the section 32 of the Securities Services Act, 2004 (Act No. 36 of 2004), which provides the official electronic settlement and custody services to the JSE Limited. 196 of 298 6/2021 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers G. (nn) TMS means the trade monitoring system introduced by the Settlement authority in terms of which members of the JSE Limited, CSM and CSA, who introduce risk into the market, are levied with additional capital calls and cash margins. (oo) Uncertificated securities mean securities as defined in section 29 of the Securities Services Act, 2004 (Act No. 36 of 2004), which are transferable without a written instrument and are not evidenced by a certificate. (iii) General (a) There are no restrictions on local dealings in securities, other than bearer securities, that are owned by residents. (b) It is emphasised that this section applies not only to securities registered in the name of a non-resident, but also to securities in the name of a resident acting as a nominee for a non-resident. (c) The principal objectives in controlling non-resident owned securities are to ensure that: (aa) residents requiring funds outside the CMA do not obtain such funds by purchasing securities in the CMA and selling them outside the CMA without accounting for the proceeds in foreign currency or Rand from a Non-resident Rand account in the name of the non-resident and/or Rand from a vostro account held in the books of the Authorised Dealer; (bb) since all income due to non-residents on their securities is freely transferable, non-residents do not purchase securities from residents other than through approved channels at a fair and market related price; and (cc) since exchange controls on non-residents have been abolished, the onus is on the South African buyer or seller of securities to prove that the transaction was concluded on an arm’s length basis and at a fair and market related price. (d) The scheme outlined hereunder has been designed to segregate securities owned by non-residents from securities owned by residents without imposing control over the actual securities in both certificated and uncertificated environments to allow non-residents the maximum freedom to change their investment portfolios without defeating the objectives outlined above, and at the same time to obviate the necessity for a cumbersome administrative system which, in the interests of investors and others concerned, it is naturally desired to avoid. 197 of 298 6/2021 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers G. (e) All securities traded on the JSE Limited need to be dematerialised or immobilised in the electronic records of the CSD specifically established for this purpose, before it can be rendered ‘good delivery’. The residential status will be flagged by the various CSDPs or settlement agents. (f) Since only CSDPs would be able to initiate the dematerialisation process in an electronic settlement environment, the initiation of this process in respect of emigrants would need to be the CSDP of the Authorised Dealer controlling the particular emigrant’s remaining assets or the CSDP contracted by such an Authorised Dealer, under the auspices of the controlling Authorised Dealer. (g) Only the CSDP of Authorised Dealers may enter into securities lending transactions with non-residents and then only within the ambit of the powers granted to them. (h) Except with the authority of the Financial Surveillance Department, no advances may be made against securities. (i) The Financial Surveillance Department is of the view that in a certificated environment securities control can best be administered by a few financial institutions who have a detailed knowledge of the subject and requirements imposed by the Financial Surveillance Department. It has, therefore, been centralised in the hands of a few branches of Authorised Dealers, who are referred to hereunder as Authorised Banks and CSDPs. (j) In an uncertificated environment there is no distinction between the duties of Authorised Dealers, Authorised Banks and CSDPs. CSDPs and settlement agents are also authorised as such by the Financial Surveillance Department, while members of stock exchanges are authorised by the exchanges concerned. CSMs and CSAs are authorised as such by the JSE Limited. (k) The following Authorised Dealer branches or entities have been appointed as Authorised Banks under Regulation 14: Branch or entity appointed Authorised Dealer as Authorised Bank ABSA Bank Limited CIB Operations - Cape Town CIB Operations - Durban CIB Operations - Johannesburg CIB Operations - Pretoria 198 of 298 21/2021 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers G. Branch or entity appointed Authorised Dealer as Authorised Bank Access Bank (South Africa) Securities Division, Head Limited Office, Johannesburg Bidvest Bank Limited Head Office, Braamfontein, Johannesburg Capitec Bank Limited Sandton Campus Citibank, N.A., South Africa Johannesburg FirstRand Bank Limited FirstRand Currency and Exchanges Department RMB Custody Services HSBC Bank plc Johannesburg Branch Investec Bank Limited Head Office, Sandton Nedbank Limited Group Exchange Control – Enterprise Governance and Compliance Global Business Centre, Cape Town Global Business Centre, Durban Global Business Centre, Johannesburg Global Business Centre, Paarl Global Business Centre, Port Elizabeth Nedbank Limited Investor Services Nedbank Private Wealth Non-Resident and Embassy Banking (NREB) – Johannesburg Non-Resident and Embassy Banking (NREB) – Tshwane Non-Resident and Embassy Banking (NREB) – Western Cape Johannesburg Branch 199 of 298 1/2025 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers G. Branch or entity appointed Authorised Dealer as Authorised Bank Société Générale Johannesburg Branch Standard Chartered Bank Johannesburg Branch Global Markets, Cape Town Global Markets, Durban The Standard Bank of South Global Markets, Africa Limited Johannesburg Global Markets, Port Elizabeth Investor Services, Johannesburg Johannesburg IPC Non- Resident Centre (l) The following Authorised Dealer branches or entities have been appointed as CSDPs in respect of the electronic settlement and custody services provided by STRATE under Regulation 14: Branch or entity appointed as central Financial institution securities depositories participant Citibank, N.A., South Africa Johannesburg Computershare Custodial Johannesburg Services FirstRand Bank Limited RMB Corporate Banking – Custody and Trustee Services JSE Investor Services CSDP (Pty) Johannesburg Ltd Nedbank Limited Securities and Custodial Services Johannesburg 200 of 298 1/2025 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers G. Branch or entity appointed as central Financial institution securities depositories participant Corporate and Investment Banking, Financial Asset Services a Division of The Standard Bank of Operations, Johannesburg South Africa Limited Société Générale Johannesburg Standard Chartered Bank Johannesburg (m) The following Authorised Dealer branches or entities have been appointed as settlement agents of the Central Depository Limited under Regulation 14 in respect of the electronic clearing and settlement system operated by STRATE: Branch or entity Financial institution appointed as settlement agent Citibank, N.A., South Africa Johannesburg FirstRand Bank Limited RMB Custody Services Nedbank Limited Securities and Custodial Services Johannesburg Corporate and Investment Banking, Financial Asset Services a division of The Standard Bank of Operations, Johannesburg South Africa Limited (iv) Existing holdings of non-resident owned securities in certificated form (a) Regulation 14 makes it obligatory for all residents who hold or receive securities on behalf of non-residents to submit such securities to any Authorised Dealer or CSDP in the CMA for non-resident endorsement as indicated in (d) below. The securities must be accompanied by a declaration signed by the holder that the beneficial owner of the securities is permanently resident in the country indicated. (b) This section applies both to securities registered in the names of non-residents and to those held in the names of nominees, including Authorised Dealers and all other nominee companies. (c) Regulation 14 precludes any resident from acting as a nominee for a non-resident, unless permission has been obtained from the Financial Surveillance Department. Such permission will normally 201 of 298 6/2021 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers G. be granted only to stockbrokers, banks and other financial institutions. Authorised Dealers and their nominee companies are hereby authorised to act as nominees for non-residents. (d) Authorised Dealers who are presented with unendorsed securities, will endorse such securities non-resident. The endorsement will be written or stamped in bold letters, not less than five millimetres high, on the top right-hand corner of the security. The endorsement will be authenticated by the stamp of the Authorised Dealer concerned and the signature of one of its authorised officers. It is emphasised that any Authorised Dealer may endorse securities, but that only an Authorised Bank may cancel the endorsement. Cancellations must also be authenticated as indicated above. (e) The effect of the non-resident endorsement will be to render the securities ‘bad delivery’ to a resident until the endorsement has been cancelled by an Authorised Bank. (f) If a non-resident wishes to effect a switch, the security will have to be presented to an Authorised Bank to have the endorsement cancelled. Such cancellation must be signed by an authorised officer of the Authorised Bank concerned. (g) The Authorised Banks will only cancel the endorsement on the following conditions: (aa) against the presentation of other locally listed or unlisted securities of an equivalent value as evidenced by brokers’ notes or an auditors’ certificate confirming the value of the unquoted security, which would then be endorsed non-resident and returned to the broker, buyer or Authorised Dealer controlling the remaining assets of the emigrant; (bb) against payment to the Authorised Bank, for transfer abroad or for credit of a Non-resident Rand account, of the proceeds of the securities realised, as evidenced by brokers’ notes or auditors’ certificate confirming the value of the unlisted security; and (cc) against payment to the Authorised Bank of part of the proceeds for transfer abroad or for credit to a Non-resident Rand account and presentation of other locally listed or unlisted securities, together totalling the equivalent of the value of the securities sold. A non-resident endorsement must be placed on the securities presented. (h) Funds held in Non-resident Rand accounts are freely transferable and will accordingly be eligible for investment in locally listed and unlisted securities, financial instruments and any other assets on 202 of 298 6/2021 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers G. behalf of such account holder. The funds may be released to a stockbroker or seller against presentation of local securities on which a non-resident endorsement must be placed by the Authorised Bank. (i) If the value of securities sold on behalf of a non-resident exceeds the value of the new securities purchased, as evidenced by the relative brokers’ notes or auditors’ certificate, the difference must be deposited with an Authorised Bank for credit of a Non-resident Rand account. (j) Where the value of securities purchased on behalf of a non-resident exceeds the value of the securities sold, the stockbroker or purchaser must satisfy the bank that the shortfall has been received in foreign currency or Rand from a Non-resident Rand account in the name of the non-resident and/or Rand from a vostro account held in the books of the Authorised Dealer. (k) Authorised Banks may permit switches into other locally listed securities. Switches may also be permitted from unlisted securities to listed securities, from listed to unlisted securities, or from unlisted to other unlisted securities. The value of unlisted securities needs to be confirmed by an auditors’ certificate in each instance. (l) Transfer secretaries are also required to endorse securities in certain circumstances and will not be permitted to: (aa) register securities in the name of a non-resident without endorsing the relative securities non-resident; (bb) transfer securities out of the name of a non-resident (except to another non-resident), unless the relative securities have been endorsed non-resident and the endorsement cancelled by an Authorised Bank; and (cc) issue rights to non-residents without endorsing the relative documents non-resident. (v) Securities purchased by non-residents and not dematerialised or immobilised in a central securities depositories (a) Authorised Dealers must place an endorsement on securities purchased with funds received in foreign currency or for which payment is made from a Non-resident Rand account (including funds received from an emigrant’s capital account). The endorsement will consist of the word non-resident and will be authenticated by the stamp of the Authorised Dealer concerned and the signature of one of its authorised officers. After the endorsement has been annotated, the securities will be returned to the broker, buyer or Authorised Dealer controlling the remaining assets of the 203 of 298 6/2021 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers G. emigrant concerned, whichever is applicable. (b) If the owner wishes to switch a security endorsed transferable or non-resident into another listed or unlisted security, an Authorised Bank must cancel the endorsement on the security sold and place a non-resident endorsement on the security purchased. This will only be done against confirmation of brokers’ notes confirming the value of listed securities or auditors’ certificates confirming the value of unlisted securities. When the latter is presented for transfer into the name of a non-resident or his/her nominee, the transfer secretary who signs the security issued to the transferee, must endorse that security non-resident above his/her signature. Securities forming part of an emigrant’s remaining assets will be returned to the Authorised Dealer controlling such emigrant’s remaining assets for control in terms of the Regulations. (c) Non-residents may switch their securities as provided for in (iv)(k) above. (d) In endorsing any security purchased under a switch, the Authorised Bank must ensure that any shortfall is received in foreign currency or Rand from a Non-resident Rand account in the name of the non- resident and/or Rand from a vostro account held in the books of the Authorised Dealer. Any surplus funds arising from a switch must be credited to a Non-resident Rand account. (e) A non-resident may sell any CMA securities to another non-resident. (vi) Initiation of the dematerialisation and immobilisation process and subsequent trading in this environment (a) All securities traded on the JSE Limited need to be dematerialised or immobilised in the electronic records of the central depositories specifically established for this purpose before they can be rendered ‘good delivery’. The residential status of the electronic record (i.e. non-resident or emigrant or resident) will be flagged accordingly by the various participants in the central depository, and linked to the applicable non-resident, emigrant capital or resident accounts in the books of the Authorised Dealer or Authorised Bank concerned. (b) Only CSDPs would be able to initiate the dematerialisation process in an electronic trading environment. It follows that the initiation of this process in respect of emigrants would need to be the CSDP of the Authorised Dealer controlling the particular emigrant’s remaining assets, or the CSDP contracted by such an Authorised Dealer, under the auspices of the controlling Authorised Dealer. 204 of 298 6/2021 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers G. (c) This section applies both to securities registered in the names of non-residents and to those held in the names of nominees, including Authorised Dealers and all other nominee companies. It may further be added that Regulation 14 precludes any resident from acting as a nominee for a non-resident, unless permission has been obtained from the Financial Surveillance Department. Only CSDPs and CSMs are authorised to act as nominees for non- residents, provided that their computer systems comply with the requirements of the JSE Limited or STRATE, depending on the environment in which they operate. (d) In processing any security purchased by a non-resident under a permitted switch, the relevant Authorised Bank must confirm that the funds needed to settle the trade will be available on the settlement date. The Authorised Bank must ensure that any shortfall is received in foreign currency or Rand from a Non-resident Rand account in the name of the non-resident and/or Rand from a vostro account held in the books of the Authorised Dealer and that any surplus funds arising from a switch will be credited to a Non-resident Rand account. (e) Funds held in Non-resident Rand accounts are freely transferable and will accordingly be eligible for investment in locally listed and unlisted securities, financial instruments and any other assets on behalf of such account holders. The funds may be released to a stockbroker against presentation of a broker’s note. (f) Where a non-resident removes securities or financial instruments that have been dematerialised or immobilised in a CSD to a foreign register, the endorsement and cancellation procedures will not be applicable. (g) Where a non-resident re-materialises securities or financial instruments that have been dematerialised or immobilised in a CSD or a central depository, the endorsement procedures will again become operative. (h) To cover the expenses that will necessarily be incurred by CSDPs or settlement agents in maintaining qualified staff to deal with the matters outlined in this section, certain charges may be levied. (vii) Duties of Authorised Dealers and Authorised Banks (a) Authorised Dealers (aa) All certificated securities held by an Authorised Dealer on behalf of a non-resident must be endorsed as prescribed in this section. This applies irrespective of the name in which the shares are registered. 205 of 298 6/2021 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers G. (bb) All non-resident owned certificated securities that are not already endorsed and that are presented to an Authorised Dealer must be endorsed against presentation of the signed declaration referred to therein. (cc) Declarations need not be completed in respect of endorsed scrip held by an Authorised Bank on behalf of a non-resident. (dd) On no account may any person other than an authorised officer of an Authorised Bank cancel the endorsement on a certificated security. It follows that switches on behalf of a non- resident from certificated securities where an endorsement needs to be cancelled must be referred to an Authorised Bank. (ee) With regard to settlement and custody in an electronic environment, there is no difference between the duties of Authorised Dealers and Authorised Banks. (ff) The computer systems of Authorised Dealers must comply with the requirements of STRATE. (gg) Authorised Dealers must account for individual securities held by their clients on the resident, non-resident and emigrant platforms of their nominee account with a CSDP. (hh) They are also required to satisfactorily reconcile the aggregate of their electronic sub-register records per platform (i.e. resident, non-resident and emigrant) on a daily basis with the total of their nominee account. (ii) When opening an account for a non-resident investor, the Authorised Dealer must ensure that the following indicators are correctly identified: (1) resident; (2) non-resident; and (3) emigrant. (jj) Authorised Dealers must ensure that a properly styled resident, non-resident, emigrant capital or transferable income account has been linked to the securities account for settlement and corporate action purposes. (kk) Under no circumstances may Authorised Dealers permit the transfer of securities within a nominee electronic register between local, non-resident and emigrant client accounts, other than for settlement related transfers. 206 of 298 6/2021 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers G. (b) Authorised Banks (aa) The information below under (cc) to (gg) refers to the existing certificated holdings of non-residents, howsoever, acquired and to securities forwarded to the CMA or acquired as a result of switches. (bb) The provisions of subsection (A) above apply to Authorised Banks who are also vested with the powers mentioned in the succeeding subsections. (cc) Authorised Banks may permit switches into unquoted securities. (dd) The endorsement on non-resident owned securities may be cancelled only on the conditions outlined in (iv)(g) above. (ee) With regard to (iv)(h) above, Authorised Banks will appreciate that, before releasing funds to a member of the JSE Limited, it is essential for them to endorse the certificated securities presented and to ensure that the latter are of approximately equal value to those sold. (ff) It is emphasised that endorsements may not be cancelled without the endorsement of other securities of similar value or against credit of the proceeds to a Non-resident Rand account. (gg) With regard to (v) above, Authorised Banks will appreciate that the non-resident endorsement on a security no longer restricts the transferability of the sale proceeds thereof. (hh) A security purchased for a non-resident may only be endorsed if the Authorised Bank concerned is satisfied that payment therefore has been received in foreign currency or Rand from a Non-resident Rand account in the name of the non-resident and/or Rand from a vostro account held in the books of the Authorised Dealer. (ii) If the owner of a transferable security wishes to sell it and purchase another, an Authorised Bank must place a non-resident endorsement on the security purchased and must: (1) satisfy itself that the security sold was endorsed by an Authorised Bank or by the transfer secretary whose signature appears at the foot of the security; and (2) cancel the endorsement on the security sold. 207 of 298 6/2021 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers G. (jj) All income due on securities owned by non-residents is transferable to countries outside the CMA. (kk) Except with the authority of the Financial Surveillance Department, advances may not be made against securities owned by non-residents. (ll) Securities owned by non-residents may not be exported, unless they have been endorsed ‘Non-Resident’. (viii) Duties of central securities depository participants and settlement agents (a) The role of CSDPs and settlement agents is that of a custodian and to perform clearing and settlement services by interfacing with STRATE. (b) The computer systems of CSDPs and settlement agents must comply with the requirements of the JSE Limited or STRATE, depending in which environment they operate. (c) CSDPs and settlement agents are involved in the settlement process, as trades are eligible for settlement only if the trades have been confirmed or committed to by the CSM, CSA or CSDP and the settlement agent, which the instance requires. (d) CSDPs must account for individual securities held by their clients on the ‘Resident’ or ‘Non-Resident’ or ‘Emigrant’ platforms. (e) CSDPs and settlement agents are also required to satisfactorily reconcile the aggregate of their electronic records per platform (i.e. ‘Resident’ or ‘Non-Resident’ or ‘Emigrant’) on a daily basis with the CSD operated by STRATE. (f) CSDPs and settlement agents may permit switches into unlisted securities. (g) All income due on securities owned by non-residents is transferable to countries outside the CMA. (h) Advances against securities may not be made without the prior written approval of the Financial Surveillance Department. (i) Certificated securities owned by non-residents may not be exported, unless they have been endorsed ‘Non-Resident’. (j) Securities owned by non-residents may be transferred free of value between CSDPs for the account of the same non-resident or for the account of another non-resident under the following conditions: (aa) that the delivering CSDP advises that the transfer constitutes non-resident owned securities; 208 of 298 6/2021 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers G. (bb) that the receiving CSDP ensures that the securities deposited to a non-resident share account and that either no change of beneficial ownership takes place or non-resident funds have moved elsewhere in terms of the transaction; (cc) where such a transaction is initiated by a member of the JSE Limited, the onus will be on the member to prove that the transaction is effected in terms of the provisions of the Authorised Dealer Manual and that proof of this should be provided to both the receiving and delivering CSDPs; and (dd) where an American depository receipt (ADR) transaction is initiated by a member of the JSE Limited , the onus will be on the member to prove that the transaction is in terms of the Authorised Dealer Manual and that proof of foreign currency movement should be provided to the CSDP. (k) When opening an account for an investor, the CSDP must ensure that the following indicators are correctly identified: (aa) resident; (bb) non-resident; and (cc) emigrant. (ix) Duties of members of the JSE Limited (a) Dealing with listed securities where the securities are in certificated form (aa) In terms of the provisions of Regulation 14, members of the JSE Limited receiving securities in certificated form from or on behalf of a non-resident must immediately have the securities endorsed non-resident by an Authorised Dealer. (bb) This applies also to securities purchased on behalf of a non-resident, even if the securities are to be registered in the name of the broker as nominee and to any securities bearing an address outside the CMA, whether the securities are to be dealt in or not. (cc) Members of the JSE Limited should on no account deal in any way with unendorsed securities in which they know or have reason to believe a non-resident has an interest. (dd) When requested by a non-resident to sell any security, the proceeds must either be used to purchase another locally listed security or be deposited with an Authorised Bank for transfer abroad or for credit of a Non-resident Rand account 209 of 298 6/2021 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers G. in the name of the non-resident. The conditions governing dealings on behalf of non-residents are set out more fully in this section of the Authorised Dealer Manual. (ee) Members are required to ensure that all securities introduced by a non-resident client into a non-resident share account are in fact non-resident securities by verifying that the securities bear a non-resident endorsement or that the securities have been transferred from another non-resident share account. (ff) Members are required to ensure that where residents emigrate from the CMA their remaining assets are brought under the administration of an Authorised Dealer. (b) Dealing with listed securities where the securities have been dematerialised or immobilised in a central depository (aa) After a transaction has been concluded with a non-resident or emigrant or resident party, brokers’ notes must be sent to both the client and their nominated CSDP. (c) General (aa) Members of the JSE Limited should at all times strictly adhere to these requirements to prevent the objectives of securities control being defeated. (bb) When in any doubt, members must consult an Authorised Bank or the Director of Surveillance, the JSE Limited. Reference to the Financial Surveillance Department should be via an Authorised Dealer. (x) Duties of transfer secretaries (a) Regulation 14 restricts dealings in securities belonging to non-residents, except on the conditions prescribed by the Treasury, whose powers under this regulation have been delegated to the Financial Surveillance Department. Except with permission (which must be obtained from an Authorised Dealer who will, in need, refer to the Financial Surveillance Department), no person may: (aa) register the transfer of any security in which a non-resident has an interest; (bb) change the address of a non-resident, except to another non-resident address; (cc) register a South African address if the owner is a non-resident; or 210 of 298 6/2021 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers G. (dd) transfer a non-resident entry from the foreign section of a register to the South African section of the register or vice versa. (b) This section of the Authorised Dealer Manual deals with the prescribed conditions upon which the acts specified in Regulation 14 may be performed by transfer secretaries and the duties that devolve upon them. In general: (aa) no transfer of securities may be effected to or from a non- resident without the approval of an Authorised Bank or CSDP; (bb) no securities in certificated form or right to purchase securities may be issued to, or for account of, a non-resident unless the documents are endorsed non-resident; (cc) any request to change the address of a non-resident, except to another non-resident address, requires the prior written approval of the Financial Surveillance Department; (dd) it is possible that some securities in certificated form owned by non-residents may not be presented for endorsement, but if transfer secretaries receive, for any purpose, unendorsed securities in certificated form in the names of persons whose addresses are shown in the register as being outside the CMA, they should immediately hand the securities to an Authorised Dealer for endorsement; (ee) transfer secretaries may transfer securities in certificated form from one non-resident to another non-resident, provided that they place a non-resident endorsement on the security in the name of the transferee; (ff) transfer secretaries may transfer securities in certificated form from a resident to a non-resident only if the transferee’s security is endorsed non-resident; (gg) transfer secretaries may not transfer securities in certificated form from a non-resident to a resident unless the transferor’s security bears a ‘Non-Resident’ endorsement and the endorsement has been cancelled by an Authorised Bank. No non-resident endorsement must be placed on the security issued to the resident. A transfer from a non-resident to a local nominee acting for the same non-resident, where no change of ownership is involved, is not regarded as a transfer from a non-resident to a resident. Transfer secretaries may, therefore, effect such transfers without reference to an Authorised Bank, provided that they place a ‘Non-Resident’ endorsement on the new security issued in certificated form; 211 of 298 6/2021 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers G. (hh) forms of acceptance in certificated form, in respect of non- residents, must be endorsed ‘Non-Resident’, before issue. Securities (including letters of allocation, letters of allotment, option certificates, balance receipts and any other receipts for securities) may not be issued to a non-resident, or to a person known to be his/her nominee, without the approval of an Authorised Bank, who will indicate that the purchase price has been received in foreign currency or Rand from a Non-resident Rand account in the name of the non-resident and/or Rand from a vostro account held in the books of the Authorised Dealer. The securities must be endorsed ‘Non-Resident’; (ii) where non-resident endorsed securities are received for splitting or replacement without change of ownership, transfer secretaries must endorse the new securities ‘Non-Resident’ as well; (jj) all non-resident endorsements by transfer offices must be authenticated by the signature of the authorised official of the transfer secretary concerned; (kk) transfer secretaries must in the following instances ensure that the original securities in certificated form are surrendered prior to issuing new securities in their stead: (1) change of name; (2) subdivision or consolidation of shares; (3) participation in a reconstruction or merger; and (4) buy-out and in lieu of cash, new shares are issued to the original shareholders; and (ll) where a transfer secretary is requested by a CSDP to rematerialise for a non-resident, the transfer secretary may produce a certificate, provided that such certificate is endorsed ‘Non-Resident’. (B) Financial Surveillance Department requirements relating to the JSE Limited Note: (i) to (vii) below, only apply to South African registered and domiciled companies with South African primary listings. (i) The listing of a South African registered company on the JSE Limited: (a) Authorised Dealers may, on application to them, permit the listing of a South African registered company, excluding a bank and/or a bank holding company, on the JSE Limited, provided that they are 212 of 298 6/2021 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers G. fully satisfied that the following clause is incorporated in the prospectus: “In terms of the Exchange Control Regulations of South Africa: 1. a former resident of the Common Monetary Area who has emigrated, may use funds in the emigrant capital account to subscribe for shares in terms of this prospectus; 2. all payments in respect of subscriptions for shares by an emigrant, using funds from an emigrant’s capital account, must be made through the Authorised Dealer controlling the remaining assets; 3. any shares issued pursuant to the use of funds from emigrant’s capital account, will be credited to their share accounts at the central securities depository participant controlling their remaining portfolios; 4. shares subsequently re-materialised and issued in certificated form, will be endorsed ‘Non-Resident’ and will be sent to the Authorised Dealer through whom the payment was made; and 5. if applicable, refund monies payable in respect of unsuccessful applications or partly successful applications, as the case may be, for shares in terms of this prospectus, emanating from emigrant capital accounts, will be returned to the Authorised Dealer through whom the payments were made, for credit to such emigrants’ capital accounts. Applicants resident outside the Common Monetary Area should note that, where shares are subsequently re-materialised and issued in certificated form, such share certificates will be endorsed ‘Non-Resident’ in terms of the Exchange Control Regulations.” (b) Authorised Dealers should, however, ensure that nothing is stated in the prospectus that is contrary to the provisions of the Authorised Dealer Manual or a specific authority granted by the Financial Surveillance Department, prior to the granting of any authority in this regard. (ii) Capitalisation issues Authorised Dealers may, on application, permit capitalisation issues, provided that they are fully satisfied that the following clauses, where applicable, are incorporated in the circular to shareholders: (a) Capitalisation award emanating from a share premium account “In terms of the Exchange Control Regulations of South Africa: 213 of 298 6/2021 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers G. 1. any share certificates that might be issued to non-resident shareholders will be endorsed ‘Non-Resident’; 2. any new share certificates, dividend and residual cash payments based on emigrants’ shares controlled in terms of the Exchange Control Regulations, will be forwarded to the Authorised Dealer controlling their remaining assets. The election by emigrants for the above purpose must be made through the Authorised Dealer controlling their remaining assets. Such share certificates will be endorsed ‘Non-Resident’; and 3. dividend and residual cash payments due to non-residents are freely transferable from South Africa.” (b) Capitalisation award emanating from distributable reserves “In terms of the Exchange Control Regulations of South Africa: 1. any share certificates that might be issued to non-resident shareholders will be endorsed ‘Non-Resident’; 2. any new share certificates issued based on emigrants’ shares controlled in terms of the Exchange Control Regulations, will be forwarded to the Authorised Dealer controlling their remaining assets. Such share certificates will be endorsed ‘Non-Resident’; and 3. dividend and residual cash payments are freely transferable from South Africa.” (iii) Reverse listings (a) Authorised Dealers may on application permit reverse listings, provided that the requirements of subsection (F) below are adhered to, where applicable. (iv) The issue of shares for cash (a) Authorised Dealers may on application permit the issue of shares for cash, provided that the requirements of subsection (F) below are adhered to, where applicable. (b) The use of any proceeds for investments outside the CMA requires the prior written approval of the Financial Surveillance Department. (v) Rights issues or claw-back offers by listed companies (a) Authorised Dealers may on application permit rights issues or claw- back offers by listed companies, provided that the following clause 214 of 298 6/2021 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers G. is incorporated in the circular to shareholders: “In terms of the Exchange Control Regulations of South Africa, non- residents of the Common Monetary Area will be allowed to: (1) take up rights allocated in terms of the offer; (2) purchase letters of allocation on the JSE Limited; (3) subscribe for new ordinary shares arising from letters of allocation purchased on the JSE Limited ; and (4) purchase excess shares that have been applied for in terms of the offer (if applicable); provided that payment is received in foreign currency or in Rand from a Non-resident Rand account in the name of the non-resident and/or Rand from a vostro account held in the books of the Authorised Dealer. All applications by non-residents for the above purposes must be made through an Authorised Dealer. Shares subsequently re-materialised and issued in certificated form, will be endorsed ‘Non-Resident’. Where a right in terms of the offer falls due to a former resident of the Common Monetary Area, which right is based on shares controlled in terms of the Exchange Control Regulations, only funds in the emigrant’s capital account may be used to take up this right. In addition, such funds may also be used to: (1) purchase letters of allocation on the JSE Limited; (2) subscribe for new ordinary shares arising from the letters of allocation purchased on the JSE Limited; and (3) purchase excess shares that have been applied for in terms of the offer (if applicable). Applications by emigrants to use funds in their capital account for the above purposes must be made through the Authorised Dealer controlling their remaining assets. Any shares issued pursuant to the use of funds in the emigrant capital account will be credited to their share accounts at the central securities depository participant controlling their remaining portfolios. The sale proceeds of letters of allocation, if applicable, will be returned to the Authorised Dealer for credit to such emigrants’ capital accounts.” (b) The use of proceeds for investments outside the CMA requires the prior written approval of the Financial Surveillance Department. 215 of 298 6/2021 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers G. (vi) The acquisition by non-residents of a ‘cash company’ (a) Authorised Dealers may, on application, permit the acquisition by non-residents of a ‘cash company’, provided that the requirements of subsection (F) below are adhered to, where applicable. (vii) The acquisition from or disposal to a non-resident of assets by a listed company (aa) Authorised Dealers may on application permit the acquisition from or disposal to a non-resident of assets by a listed company, provided that the requirements of subsection (C) below are adhered to. (viii) Authorised Dealers are referred to the listings requirements of the JSE Limited, which require the prior written approval of the Financial Surveillance Department before the JSE Limited gives approval in respect of the following transactions: (a) the listing of a bank and/or bank holding company; (b) the issue of bearer securities; (c) restructures, mergers and changes in control where non-residents are involved; (d) the listing of a quoted South African company on a foreign stock exchange; (e) the listing of an external company on the JSE Limited; (f) the listing of warrants; (g) the issue of hedge securities; (h) the delisting of a company listed on the JSE Limited; (i) the declaration of a dividend in specie or special dividend, for any purpose; and (j) the elimination of so-called ‘odd lot’ minority shareholders through the mechanism of consolidations and/or subdivisions of share capital. (ix) Authorised Dealers are advised that the JSE Limited is now also in a position to facilitate the issuance of debt instruments. The terms and conditions pertaining to dealings by non-resident clients in these instruments are incorporated in the relevant exchange’s rules and regulations. 216 of 298 6/2021 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers G. (C) South African assets owned by non-residents (i) Non-residents may freely invest in South Africa, provided that suitable documentary evidence is viewed in order to ensure that such transactions are concluded at arm’s length, at fair market related prices and are financed in an approved manner. In this regard, such financing must be in the form of the introduction of foreign currency, Rand from a Non-resident Rand account in the name of the non-resident and/or Rand from a vostro account held in the books of the Authorised Dealer or in terms of the provisions of section I.1 of the Authorised Dealer Manual. The creation of any loan account between a resident and a non-resident would require the prior written approval of the Financial Surveillance Department. (ii) The local sale or redemption proceeds of non-resident owned assets in South Africa may be regarded as freely transferable. Such proceeds may also be freely used in the CMA by non-residents for investment and other purposes, and may accordingly be credited to Non-resident Rand accounts. The provisions of subsection (D) below should be noted. (iii) Stockbrokers may not retain, uninvested in their possession, the cash proceeds of securities sold on behalf of non-residents. Such funds must be paid to the credit of a Non-resident Rand account with an Authorised Bank with whom each stockbroking firm may, for this purpose, maintain a single Non-resident Rand account in its own name to handle the share transactions of non-resident clients. (D) Investments by non-residents in South African debt securities (i) In view of the multiplicity of debt securities (debt instruments) on offer, largely as a result of the securitisation of many forms of debt or assets, Authorised Dealers and their corporate clients are advised to seek the guidance and/or the prior written approval of the Financial Surveillance Department before issuing, listing and/or purchasing any form of debt security, other than those specifically dealt with in this subsection. (ii) Non-resident investors may subscribe to and/or purchase government, municipal and public utility stocks. (iii) Non-resident investors may subscribe to and/or purchase short-term money market bearer or negotiable instruments such as treasury bills, parastatal project bills, bankers acceptances, promissory notes and negotiable certificates of deposit. (iv) These securities must remain in the custody of the non-resident’s local Authorised Bank until such time as these are sold or redeemed. (v) Rates of interest or discount rates earned by the non-resident investor must equate to the money market rate ruling for such a security at the time of purchase. 217 of 298 6/2021 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers G. (vi) Authorised Banks are exempted from the provisions of Regulation 15 (1), (2) and (3), provided that the terms and conditions of this subsection are strictly complied with. (vii) Emigrants may utilise funds in their capital account to subscribe to and/or purchase stocks and/or short-term money market bearer or negotiable instruments of the above nature on the same terms and conditions as set out above. The sale or redemption proceeds are not eligible for transfer abroad and must be credited to the emigrants’ capital accounts. Only interest earned or any discount obtained, as against that purchased, is eligible for transfer abroad or may be placed to the credit of a Non- resident Rand account. The provisions of section B.3(B) of the Authorised Dealer Manual would, however, continue to apply. (viii) The local issue, listing and/or purchase of the following debt securities require the prior written approval of the Financial Surveillance Department: (a) Subscription to and/or purchase of zero coupon bonds (aa) A deep discount security is a bond that makes low or, in the case of a zero coupon bond, no periodic interest payments and is, therefore, sold at a large discount to its nominal value. The buyer of such a bond receives a rate of return from the gradual appreciation of the security, which is redeemed at nominal value on a specified maturity date. (b) Subscription to and/or purchase of stripped treasury certificates (aa) Stripped treasury certificates are a type of zero coupon bond, but are not issued by a corporate entity to raise funds. They are usually created by an investment (merchant) bank buying blocks of long-term securities issued by the government (treasury stocks) and separating (stripping) the future coupon payments and principal redemption values. Usually a special purpose vehicle is set up to carry out the stripping. Zero coupon bonds are then issued by the special purpose vehicle with maturity values determined by and secured on the coupons and redemptions of the underlying treasury stocks. The treasury stocks are held in trust by a custodian bank which collects the coupons to pay off each tranche of the zero coupon bonds. The final tranche is redeemed out of the redemption value of the block of treasury stocks. (c) Subscription to and/or purchase of foreign currency or index linked debt instruments (aa) The active swap market has facilitated the issue of a large number of debt instruments which have some of the following features: 218 of 298 6/2021 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers G. (1) interest payments denominated in a currency other than that of redemption; (2) redemption in a currency other than that of issue; (3) redemption values linked to index values such as stock exchange indices; (4) interest and/or redemption values linked to commodity prices; and (5) interest payments in a range of currencies. (d) Subscription to and/or purchase of asset backed securities (aa) With asset backed securities, specific assets serve as collateral for the securities and generate the payment streams that are used to finance the payment of interest and principal to the investors in the security (debt instrument). Typically, the issuer cannot easily convert assets into cash, and the assets are then securitised. (bb) In general, any receivable that has a contractual cash flow is potentially suitable for securitisation. Assets to be securitised or unitised must have some, if not all, of the following characteristics: (1) the cash flow generated from the assets should be received periodically in accordance with a predetermined schedule; (2) the actual cash flows generated from the assets should be predictable, or statistics should be available for their expected performance (e.g. a history of defaults and prepayments); (3) the assets should be large enough in number and total value for it to be economical to issue them in securitised form; (4) there should be sufficient similarity in the characteristics of the assets (e.g. the final maturity date) so that their cash flows can be pooled; and (5) the assets should be of good saleable quality (i.e. there is a low risk of default) or some form of credit enhancement may be required (e.g. a guarantee). (cc) There are two basic forms of asset backed securities. The choice of structure is generally regulatory and tax-driven. The first form is usually referred to as pass-through securities, 219 of 298 6/2021 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers G. which are sold to investors who receive participation certificates. The payments of both interest and capital received by the issuer from the pool of assets are passed through directly to the investors in proportion to their participation. (dd) The second form is the issue of asset backed bonds structured as a financing transaction. Debt securities are issued which are backed by collateral (i.e. the assets). The cash flows generated from the assets are not passed directly through to investors, but are used to pay coupon interest on the bonds and then redeem principal in a predetermined order. The pool of assets will often have been sold to a special purpose vehicle, which will in turn issue the securities. The special purpose vehicle may or may not be a subsidiary of the original owner. (E) Advances to non-residents (i) Advances, including those in respect of securities dealings Advances, including those in respect of securities dealings, except where it is permissible in terms of the Authorised Dealer Manual, may not without the specific authority of the Financial Surveillance Department be granted to non-residents against the pledge of such securities or against any other form of security. (ii) Switch transactions In switch transactions, however, where a stockbroker simultaneously sells one security for a non-resident and buys another, credit may be allowed on a purely temporary basis to bridge the gap pending receipt of payment for the security sold. Such facilities must be regarded as valid for the interim period only and may not be unduly protracted. (iii) Repurchase agreements (a) A repurchase transaction, also known as a carry deal, is an agreement whereby one party (known as the seller-borrower) sells a security to the other party (the buyer-lender) with a simultaneous agreement to repurchase the security at a fixed future date at a stipulated price. While the legal form of the transaction is a sale and a repurchase, in substance the seller-borrower borrows the proceeds of the sale from the buyer-lender and deposits the securities as collateral. The difference between the sale and repurchase price of the security is essentially an interest cost to the seller-borrower. (b) Repurchase transactions entered into with a non-resident seller- borrower counter party are deemed to be a form of financial 220 of 298 6/2021 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers G. assistance and therefore subject to the provisions of Regulation 3(1)(e) and (f). (c) Authorised Dealers may, however, enter into repurchase transactions with a non-resident seller-borrower, provided that such transactions are fully secured either by providing cash cover in Rand or the pledge of unencumbered non-resident owned local assets. Any additional margin requirements are to be provided similarly. (d) The aforementioned provisions would also apply to any repurchase transactions undertaken by an Authorised Dealer with emigrant seller-borrower counterparties in respect of their remaining portfolios. (e) Authorised Dealers are exempted from the provisions of Regulation 3(1)(e) and/or (f), provided that the terms and conditions of this subsection are strictly complied with. (f) The interest factor or cost of the carry may be settled in foreign currency or over a Non-resident Rand account, provided that the rate is reasonable having regard to current interest rates. In the case of emigrants the provisions of section B.3(B) of the Authorised Dealer Manual would, however, continue to apply. All other cash flows related to repurchase transactions would be settled over the Non-resident Rand account or emigrant’s capital account of the non-resident or emigrant concerned. (iv) Securities lending (a) Securities lending is the transfer of ownership of a locally quoted security, including inward listed securities from a lender to a borrower in exchange for collateral of an agreed type and for an agreed value. The transaction is accompanied by a pledge from the borrower to the lender to reverse the transaction at a future date by the redelivery of equivalent locally quoted securities. Collateral is usually required by lenders to cover the counter party risk involved in securities lending. Loans of locally quoted securities can be made either on a fixed term or on an open-ended (or call) basis. Open- ended loans will continue until either the lender or the borrower decides to terminate the loan. In both cases, on termination, the lender will ordinarily receive back from the borrower locally quoted securities of a similar kind to those lent and in exchange the lender will return the borrower’s collateral. For the period of the loan the lender retains all the rights attached to the locally quoted securities lent, except the right to vote. Thus all dividends and corporate action entitlements pass back to the lender through the borrower. (b) Securities lending transactions entered into with a non-resident counter party are deemed to be either a form of financial assistance 221 of 298 6/2021 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers G. to the non-resident borrower and therefore subject to the provisions of Regulation 3(1)(e) and/or (f) or a borrowing by a resident from a non-resident lender which is subject to the provisions of Regulation 2, amongst others. (c) Authorised Dealers may, however, enter into securities lending transactions with a non-resident borrower, provided that such transactions are fully secured by cash cover in Rand, the transfer of unencumbered non-resident owned local collateral securities or the pledge of unencumbered non-resident owned local assets. Similarly, securities lending transactions with a non-resident lender must be fully secured by cash cover in Rand, the outright transfer of unencumbered resident owned local collateral securities or the pledge of local assets. Any additional margin requirements are to be provided on the same basis. The securities in question may not be held outside of South Africa and both legs of any transfer of securities as collateral must be administered by a South African resident custodian. (d) The aforementioned provisions would also apply to any securities lending transactions undertaken by an Authorised Dealer with emigrant lender or borrower counterparties in respect of their remaining portfolios. (e) Authorised Dealers are exempted from the provisions of Regulations 3(1)(e) and/or (f) and/or Regulation 2, provided that the terms and conditions of this subsection are strictly complied with. (f) The interest factor or lending fee accruing to the lender may be settled in foreign currency or over a Non-resident Rand account, provided that the rate is reasonable having regard to current interest rates. In the case of emigrants the provisions of section B.3(B) of the Authorised Dealer Manual would, however, continue to apply. All other cash flows related to securities lending transactions would be settled over the Non-resident Rand account or emigrant’s capital account of the non-resident or emigrant concerned. (F) Endorsement (i) For the guidance of Authorised Dealers and to assist them in the administration of securities control, certain further aspects relative to endorsements are clarified below: (a) Non-resident interest of any nature (aa) Obligation to endorse Certificated securities in which there is a non-resident interest of any nature whatsoever must be endorsed ‘Non-Resident’ and it is the duty of any transfer secretary or Authorised Dealer 222 of 298 6/2021 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers G. to whom the securities are presented to immediately procure such an endorsement. Any new shares issued in certificated form based on emigrants’ shares controlled in terms of the Regulations will be forwarded to the Authorised Dealer controlling their remaining assets. (bb) Domicile of investor It should be noted that the current form of restrictive endorsement is ‘Non-Resident’, although historically certain securities may bear the endorsement ‘Transferable’. The country of domicile of the investor must not be added to an endorsement. (b) Residents of the CMA - Foreign address (aa) Endorsement and removal A resident of the CMA may not register an address outside the CMA and any securities currently held at an address outside the CMA are subject to immediate tainting by endorsement. Such occurrences must in each instance be referred to the Financial Surveillance Department together with full and precise details of the circumstances pertaining thereto. (bb) Certificate of ownership at 1961-06-16 Attention is drawn to the fact that on the introduction of securities control in 1961, Authorised Dealers and members of the JSE Limited were at that stage authorised to place on the face of securities owned by residents and registered at a foreign address a certificate in the following form: “Certified under authority of the South African Reserve Bank that the beneficial owner of these shares on 16 June 1961, was a resident of the Republic of South Africa. Date ........................ ............................................................ Signature (of Authorised Dealer or Broking Member of the JSE Limited).” (cc) The certificate in (bb) above may be taken by Authorised Banks as sufficient evidence to warrant a removal of the endorsement, provided that the owner is still a resident and that the registered address of the shareholder is changed to one within the CMA. (c) Bonus shares 223 of 298 6/2021 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers G. (aa) Bonus shares issued to non-residents must be endorsed ‘Non- Resident’. (d) Government, municipal and public utility stocks (aa) Non-resident owned stock is subject to the same endorsement requirements as applicable to any other securities. (e) Shares of foreign companies quoted on the JSE Limited (aa) The shares of companies registered outside the CMA that are quoted on the JSE Limited are subject to the same endorsement and other restrictions as applicable to CMA shares when traded locally on behalf of non-residents. (f) Documents of title other than scrip (aa) While the terms ‘scrip’ and ‘share certificates’ are used in general terms, the intention is that any other temporary or substitute documents of title such as letters of allocation, letters of allotment, option certificates, balance receipts and other receipts for scrip, are subject to the same endorsement and other restrictions as applicable to securities. (G) Export of securities (i) The purchase and export of securities, particularly bearer securities, is a possible means by which residents may circumvent Financial Surveillance Department requirements. Authorised Dealers should accordingly exercise special care in handling securities transactions in which it appears that a non-resident may have an interest. (a) Export by non-residents (aa) Authorised Dealers may permit the export of certificated securities owned by non-residents (except where such shares form part of an emigrant’s remaining assets), provided that they ensure that the certificates are first endorsed ‘Non- Resident’. (b) Re-export by transfer secretaries (aa) Transfer secretaries may re-export certificates sent to them by non-residents solely for registration, splitting or marking. Before returning such certificates, however, it is incumbent on the transfer secretary concerned to ensure that they are endorsed ‘Non-Resident’. (c) Export of securities acquired in switch deals 224 of 298 6/2021 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers G. (aa) Where a non-resident in a switch deal simultaneously sells one security locally and buys another, Authorised Dealers may, as an exceptional case and at their discretion, after endorsing the scrip as ‘Non-Resident’, authorise the export of the new security bought before receipt from abroad of the security sold. In these cases Authorised Dealers must keep adequate records to ensure that the securities sold are ultimately presented to them. Copies of brokers’ notes substantiating details of the transactions must be called for. (H) Address (i) The address at which securities are registered is of particular importance in the administration of securities control and Authorised Dealers should be vigilant when handling applications involving any change of address. (a) Deceased estates outside the CMA (aa) Transfer secretaries may, without the specific authority of the Financial Surveillance Department, record a change of address in their registers from the foreign address of the deceased, or the foreign estate, to the address of a resident executor or agent appointed to act for the non-resident estate. This concession only applies where the beneficial ownership remains non-resident and the executors or agents merely act on behalf of such owners. The securities must retain the non-resident endorsement. (b) Nominees (aa) Under the provisions of subsection (A)(x) above, a change from a non-resident address to the address of a local nominee acting for a non-resident may be effected by a transfer secretary without specific authority because, in this case, the beneficial ownership remains consistently non-resident. The certificates must therefore retain the non-resident endorsement. (c) Address in South Africa (aa) Authorised Dealers may permit the registration of an address in South Africa by a non-resident after the relative securities have been endorsed ‘Non-Resident’. (d) Foreign companies with offices in South Africa - Change of ownership and address (aa) In no instance may a change of ownership and address of securities from an office of an issuer outside South Africa to 225 of 298 6/2021 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers G. an office of an issuer within South Africa be recorded without the specific prior written approval of the Financial Surveillance Department. (e) Duties of transfer secretaries (aa) Except in the cases mentioned in the preceding paragraphs, a transfer secretary may not record a change of address from resident to non-resident or from non-resident to resident on any register maintained in South Africa, whether it be a principal, duplicate or branch register and whether the relative advice is received in South Africa or by an office outside South Africa, without the authority of an Authorised Dealer. (I) Income (i) Income due to non-residents (a) Income due to non-residents on their securities must be paid to their registered address. (b) Non-residents may, however, if desired, receive dividend payments in South Africa and no formal authority would subsequently be required from the Financial Surveillance Department if the non- resident decides to change the place of payment to that of his/her appropriate registered address. (c) Such dividend and income payments are subject to the provisions of section B.3(C) of the Authorised Dealer Manual. (ii) Income due to residents (a) Residents may under no circumstances have dividends paid outside the CMA without specific prior written approval from the Financial Surveillance Department. (J) Emigrants, immigrants and deceased estates (i) Emigrants (aa) Emigrants may not record a non-resident address in respect of any securities that form part of their remaining assets on emigration. Such securities may not be exported and must remain under the control of an Authorised Dealer. (ii) Immigrants (a) Purchase abroad of South African quoted securities 226 of 298 6/2021 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers G. (aa) Immigrants who have been accorded the concessions laid down in section B.5(B)(ii) of the Authorised Dealer Manual may within five years after their arrival, invest their foreign funds in or switch other foreign investments owned by them into South African securities abroad. (b) Cancellation of the non-resident endorsement on South African securities (aa) Immigrants may transfer their foreign assets to South Africa by way of locally quoted securities and Authorised Dealers must, in such instances, grant authority to Authorised Banks to cancel non-resident endorsements on such scrip. Such scrip must be transferred to the South African Register and a local address must be registered. Should South African quoted securities acquired abroad be introduced by an immigrant for sale on the JSE Limited, the resultant sale proceeds must be credited to a resident account. (c) Emigration within five years (aa) South African securities physically introduced and retained or purchased locally by immigrants who leave the country within five years of arrival may be exported on departure, provided that they have completed the necessary declaration and undertaking as outlined in section B.5(B)(i)(a) of the Authorised Dealer Manual. (d) Former residents of the CMA (aa) The facilities outlined above may not be accorded to any person who has previously resided in the CMA. Any requests received from such persons should be referred to the Financial Surveillance Department. (iii) Deceased estates (a) Securities in estates of persons who at time of death were permanently resident in South Africa (aa) Cash transfers by executors to non-resident legatees are permissible subject to the conditions laid down in section B.2(K) of the Authorised Dealer Manual. Executors may, prior to the submission and approval of the Liquidation and Distribution accounts, sell any securities in the estate and then, after the accounts have been passed, transfer the cash to the non-resident heirs. (bb) Where South African securities in the estate are specifically bequeathed to a non-resident legatee, such securities should 227 of 298 6/2021 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers G. be endorsed ‘Non-Resident’ and may thereafter be exported to the legatee. (cc) In all cases where such an estate holds authorised foreign assets, distribution of the foreign assets may be effected, provided that all foreign administrative and related costs have been met from the foreign portion of the estate. (b) Securities forming part of the estate of persons who at the time of death were non-resident (aa) South African securities forming part of the South African estates of non-residents, which are bequeathed to beneficiaries outside South Africa, remain non-resident assets and may be dealt with accordingly. (K) Dealings by residents on foreign stock exchanges (i) Sales (a) South African securities may be exported by residents for sale abroad only through the medium of an Authorised Dealer, whose duty it will be to ensure that the sale proceeds are repatriated to South Africa. (ii) Purchases (a) Residents are not permitted to purchase securities abroad, except as permitted in section B.2(B) to (I) of the Authorised Dealer Manual. Certain arrangements are, however, in force providing for controlled dealings by stockbrokers. Details of these arrangements are set out in (iii) below. (iii) Arbitrage (a) Finance switch transactions (aa) There is no differentiation of a restrictive nature against arbitrage dealings by stockbrokers with or on behalf of non-residents, as compared with other dealings in this respect. (bb) Authorised Banks must submit the names of foreign arbitrageurs, as well as the individual limits of the relevant Non-resident Rand account, to the Financial Surveillance Department for prior written approval, adding their recommendation for acceptance or stating reasons why recommendation is being withheld. 228 of 298 6/2021 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers G. (cc) Shares subsequently re-materialised must be endorsed ‘Non- Resident’ and sent to the Authorised Dealer through whom the payment was made. (dd) It is emphasised that this facility is subject to review on an annual basis and any abuse of the spirit and conditions of this arrangement will result in its immediate withdrawal from the parties concerned. (ee) For export of these securities see subsection (G)(i)(c) above. (b) Joint accounts between resident and non-resident stockbrokers (aa) Joint accounts between resident and non-resident stockbrokers should be regarded as non-resident and subject to the securities control requirements. (bb) Applications to settle profits and/or losses due to the foreign party to such joint accounts on four-way arbitrage deals for completed delivered transactions must be submitted to the Financial Surveillance Department quarterly. Copies of the joint accounts concerned must accompany these applications. (iv) Primary listings offshore (a) Authorised Dealers may submit requests by major corporates to establish primary listings offshore. The following guidelines will, inter alia, be taken into account: (aa) foreign expansion is necessary and integral to the company, given its size and the nature of its business; (bb) a significant proportion of revenue is derived from outside South Africa, making the company in effect an international concern; (cc) there are clear monetary and balance-of-payments benefits to South Africa; (dd) a substantial advantage can be demonstrated over alternative approaches to raising the required capital; (ee) the direct and indirect South African assets may not be encumbered; (ff) South Africa’s reserves may not be negatively impacted by an outflow of dividends or any other funds; (gg) the corporate involved must commit itself to match any dividends declared to the foreign holding company with 229 of 298 6/2021 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers G. dividends paid out to South African shareholders to preserve balance-of-payments neutrality; and (hh) all the South African operations and assets of the South African corporate or the proceeds thereof, as well as any other cash holdings, must remain in South Africa and may only be exported from South Africa if payable pro-rata to the non- resident shareholders of the listed holding company with the prior written approval of the Financial Surveillance Department. (v) Offshore secondary listings and depository receipt programmes (a) Authorised Dealers may permit South African listed companies, to secondary list on foreign exchanges and/or list depository receipt programmes in the offshore market, subject to receiving the following confirmations: (aa) admission to trade on the offshore exchange; (bb) the shares/securities will be traded for cash only to non-residents and qualifying institutional investors subject to the prudential limit; (cc) South African residents will hold their shares and/or securities and settle via the JSE Limited register, whereas non-residents will hold and settle their shares and/or securities via the offshore secondary register; (dd) the proposed shares and/or securities comprising the secondary listing will form part of the locally listed company’s share capital; (ee) South Africa must remain the place of effective management for the locally listed company and under no circumstances may the company re-domicile; (ff) the locally listed company will continue to be regulated in accordance with the rules and regulations of the JSE Limited; and (gg) the locally listed company will remain a South African incorporated company. (b) The locally listed company must furnish the Authorised Dealer with information regarding the ratio between the company’s shares listed on the JSE Limited and the offshore exchange as a proportion of the locally issued shares. In addition, the envisaged percentage non-resident shareholding in the local company post the secondary listing on the foreign exchange must be provided. 230 of 298 10/2022 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers G. (c) Authorised Dealers must report annually to the Financial Surveillance Department details of the above-mentioned authorities granted. (L) General (i) Nominees for non-residents (a) Authorised Dealers and their nominee companies are authorised to act as nominees. Any other person or company (including stockbrokers and trust companies) must obtain, through their bankers, the prior written approval of the Financial Surveillance Department to act in this capacity. (ii) Brokerage rebates due to non-resident stockbrokers (a) Brokerage rebates due to a non-resident stockbroker by a resident stockbroker, in terms of the rules of the JSE Limited, may be transferred abroad against documentary evidence confirming the amount involved. (M) Bearer securities (i) Regulations (a) The attention of Authorised Dealers is drawn to the provisions of Regulation 15, which prohibits the issue of, or any dealing in, bearer securities or bearer options, without the specific prior written approval of the Treasury. (ii) Conditions of issue - Share or stock warrants to bearer Note: The term ‘bearer warrants’ used in this statement refers to both share warrants to bearer and stock warrants to bearer. (a) Only companies that have obtained the prior written approval of the Financial Surveillance Department may issue bearer warrants on the following conditions: (aa) Bearer warrants may only be issued to non-residents, in exchange for an equal number of registered shares of the same class and the conversion may be effected only against confirmation from an Authorised Dealer that the non-resident owned shares to be converted into bearer warrants were purchased locally with foreign currency or Rand from a Non-resident Rand account in the name of the non-resident and/or Rand from a vostro account held in the books of the Authorised Dealer. The bearer warrants must be endorsed ‘Non-Resident’. 231 of 298 6/2021 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers G. (b) Shares purchased in the prescribed manner by a non-resident or on his/her behalf by a broker or by his/her duly appointed nominee in South Africa, may be converted into bearer warrants: (aa) on application by such non-resident or his/her nominee in South Africa; (bb) on application by the person who is the registered holder of the shares at the time they are acquired by the non-resident; or (cc) on application by the holder of registered shares bearing the endorsement ‘Transferable’. (c) Where non-residents, by virtue of being registered shareholders or holders of bearer warrants in a company, are entitled as a right to take up shares in the same or another South African company, they may, if the latter company has obtained the necessary approval to issue bearer warrants, be issued against payment in foreign currency or Rand from a Non-resident Rand account in the name of the non-resident and/or Rand from a vostro account held in the books of the Authorised Dealer, with bearer warrants equal to the number of shares to which they are entitled. Before issuing the bearer warrants, the company concerned must be furnished with a certificate by an Authorised Dealer that payment for such shares has been effected in foreign currency or Rand from a Non-resident Rand account in the name of the non-resident and/or Rand from a vostro account held in the books of the Authorised Dealer. (d) Bearer warrants may not be dealt in but must be converted into registered shares before being sold in South Africa on behalf of the non-resident beneficial owner. (aa) In effecting reconversions into registered scrip, and in the event of such shares subsequently being re-materialised and issued in certificated form, such share certificates will be endorsed ‘Non-Resident’ and will be sent to the Authorised Dealer through whom the payment was made. (e) All dividend payments made against coupons detached from bearer warrants are eligible for transfer abroad. Coupons received by Authorised Dealers on a collection basis may be similarly dealt with and should be presented to the issuing company as though the Authorised Dealer were acting as nominee. (f) Subject to the provisions of (d) above, bearer warrants may be held in South Africa by a nominee of a non-resident, but in terms of Regulation 14(1)(b) no person may act as nominee for non-residents without the permission of the Financial Surveillance Department. Presentation of dividend coupons by a nominee must 232 of 298 6/2021 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers G. be accompanied by a declaration that the coupons are presented on account of non-residents. (aa) The proceeds of coupons so presented less non-resident shareholders’ tax, can thereafter be transferred to the non-resident abroad. The Authorised Dealer will require a declaration by the company that the payments are due to non- residents in respect of dividends on bearer warrants issued under these special arrangements. (g) Bearer warrants must be distinctively printed and must bear the endorsement “These bearer warrants are issued with the approval of the South African Treasury under the Republic of South African Exchange Control Regulations”. The words ‘South Africa’ must appear prominently on all bearer warrants, talons and coupons so that the difference between these issues and previous issues may be easily recognised. (h) Bearer warrants issued under these arrangements must be endorsed in terms of Regulation 14(2). (N) The Derivatives Market of the JSE Limited (i) Authorised Dealers may credit or debit Non-resident Rand accounts of non-resident clients with margin payments due to or from JSE Clear (Pty) Limited in respect of their positions in derivatives instruments. (ii) The terms and conditions pertaining to non-resident clients in their dealings on the Derivatives Market of the JSE Limited are prescribed in the Rules and Directives of the JSE Limited. (iii) See section B.2(J)(v)(a)(aa) of the Authorised Dealer Manual with regard to the release of emigrants’ remaining assets in respect of margin payments due to JSE Clear (Pty) Limited, on behalf of emigrant clients. (O) Dual listing of entities within SADC and SADC depository receipts on the JSE Limited (i) Applications by foreign entities to list on the JSE Limited, as well as the listing of SADC depository receipts (SDRs) on the JSE Limited, must be submitted to the Financial Surveillance Department, together with full details of the proposed transactions. ---oOo-- 233 of 298 6/2021 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers H. H. Inward listings on South African exchanges (A) Introduction (i) Instruments that offer South African investors exposure to foreign referenced assets in Rand terms must be listed on a South African exchange. The types of instruments include equity, debt and derivatives. (ii) These instruments may only be denominated in Rand. (iii) These foreign referenced instruments may not be offered to South African investors on an over-the-counter basis. (iv) The listing of all instruments referencing foreign assets will require specific prior approval of the Financial Surveillance Department. (v) An Authorised Dealer wishing to facilitate the cross-border reporting of inward listed transactions requires prior approval of the Financial Surveillance Department and will have to comply with the specific reporting requirements. (vi) The inward listing policy may not be used as a mechanism for a South African company to re-domicile offshore. (vii) The intention of the inward listing policy is to attract foreign direct investment to the domestic economy, grow market capitalisation and liquidity of South Africa’s capital markets and support the enhancement of foreign investment diversification through domestic channels. (B) Qualifying issuers of inward listed instruments (i) The following entities qualify to issue inward listed instruments on a South African exchange referencing foreign assets: (a) non-resident entities; (b) local Authorised Dealers; (c) South African exchanges; and (d) CIS managers registered under CISCA to administer collective investment schemes, limited to listing exchange traded funds referencing foreign assets. 234 of 298 12/2025 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers H. (C) Investors in inward listed instruments (i) The following entities may invest in inward listed instruments without restriction: (a) South African companies, trusts, partnerships and private individuals; (b) bona fide non-residents. (ii) South African institutional investors and Authorised Dealers may invest in: (a) inward listed shares without restriction; (b) inward listed debt and derivative instruments, subject to the full nominal or notional exposure being marked off against the prudential limit of institutional investors and macro-prudential limit of Authorised Dealers; and (c) inward listed exchange traded funds, subject to the prudential limit of institutional investors and macro-prudential limit of Authorised Dealers. (D) Classification of inward listed instruments (i) Approved inward listed debt and derivative instruments as well as exchange traded funds referencing foreign assets, traded and settled in Rand on a South African exchange, are classified as foreign. (ii) Approved inward listed shares are classified as domestic. (iii) Should an institutional investor or Authorised Dealer purchase the shares of an inward listed company on an offshore exchange in terms of prudential limit of institutional investors and macro-prudential limit of Authorised Dealers, the investment is deemed as foreign. (E) Inward listed instruments (i) Inward listed shares mean the following products listed on a South African exchange: No Product Details 1. Ordinary shares/equities including A, B and Shares which are listed on a N shares South African exchange and settled in Rand. 2. Preference shares/debentures If the company is already listed on a South African exchange 235 of 298 12/2025 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers H. No Product Details and the preference share/debenture is compulsory convertible. 3. Linked units/participatory interest/ real If the company is already estate investment trusts (REITS) and loan primary or secondary listed on stock companies a South African exchange. 4. Exchange traded funds (ETFs) An instrument that tracks a basket of shares, as long as they track an index or shares that are made up of companies already listed on a South African exchange. This must be valid for all the shares in the index. 5. Warrants As long as they represent an underlying share or basket of shares already listed on a South African exchange. 6. Share instalments As long as they represent an underlying share or basket of shares already listed on a South African exchange. 7. Derivatives - Equities indices A future or option that is listed against an index that represents companies already listed on a South African exchange. 8. Derivatives - Single stock futures and A future or option that is listed options against a single security of a company that is already listed on a South African exchange. 9. Derivatives - Dividend futures and options A future or option on a dividend of a company that is already listed on a South African exchange. 10. Krugerrand coins Listed and traded on a South African exchange in Rand. 11. Current commodity derivatives (i.e. White Listed and traded on a South Maize) African exchange in Rand. 236 of 298 12/2025 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers H. (ii) Criteria for ‘African’ debt (a) ‘African’ debt encompasses debt securities issued and listed on a South African exchange by African governments, African public entities, African local authorities, African development agencies and by non-African development institutions where the funds raised are earmarked for use in Africa. (F) Application procedure (i) Requests by a qualifying issuer to inward list an instrument on a South African exchange referencing foreign assets must be referred to the Financial Surveillance Department through an Authorised Dealer, for consideration. (ii) The application must include the following information, where applicable: (a) specific details of the proposed transaction including the term sheet or prospectus of the instrument to be inward listed; (b) utilisation and full reporting details of all transactions concluded in terms of a previous authority granted; (c) name of the Authorised Dealer responsible for the facilitation of the special vostro-styled account; (d) confirmation that the qualifying issuer will comply with the conditions set out in subsection H. below; and (e) confirmation that the transaction has been cleared with all relevant regulatory authorities. (iii) Requests to inward list a company’s shares on a South African exchange for the purpose of raising capital should be accompanied by the following information relating to the applicant company, in addition to the information called for in (ii) above: (a) the draft pre-listing statement or prospectus outlining the following information: (aa) registration and incorporation details; (bb) the nature of the business of the company; (cc) location and value of the assets; 237 of 298 12/2025 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers H. (dd) details of the place of effective management of the company; (ee) details of major shareholders (five per cent and above) including the extent of the direct and indirect South African shareholding as well as the mechanism through which such shareholding was acquired, if applicable; (ff) the latest audited financial statements, where applicable; (gg) details on how and where the listings proceeds will be utilised; and (hh) information whether the applicant company is registered as an external company in South Africa; and (b) should the pre-listing statement or prospectus not contain any of the above requested information, same must then be included in the application. (iv) Requests to utilise inward listed shares as acquisition currency must be accompanied by the following information, in addition to the information called for in (ii) and (iii) above: (a) details on the trading history/track record of the applicant company; (b) confirmation from an independent auditor that the transaction will be concluded on an arm’s length basis and at a fair and market related price; (c) details on how the acquisition will benefit South Africa; (d) a copy of the pre and post structure of the applicant company; and (e) details on how the balance of the transaction will be funded where the purchase consideration is partially funded by shares. (G) Adjudication process (i) Requests to inward list instruments on a South African exchange referencing foreign assets will be considered by the Financial Surveillance Department on receipt of an application submitted through an Authorised Dealer taking into account, inter alia, factors pertaining to the overall national and economic interest of South Africa. (ii) The compliance with the terms and conditions for the submission of an application to inward list an instrument referencing foreign assets on a South 238 of 298 12/2025 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers H. African exchange should not be construed as an indication that the application will necessarily be approved. (iii) The Financial Surveillance Department could refer an application to the National Treasury for their consideration. (iv) The Financial Surveillance Department will provide written notice of the decision in respect of an application to inward list an instrument referencing foreign assets on a South African exchange, to the applicant through an Authorised Dealer. (H) Conditions applicable to inward listing approvals (i) The following conditions will be applicable to approvals in respect of the inward listing of shares: (a) South African investors are required to hold their inward listed shares on a South African exchange and such shares may not be moved to an offshore exchange unless specific prior approval is obtained from the Financial Surveillance Department; (b) as an exception to (a) above, private individuals may, as part of their single discretionary allowance and/or foreign capital allowance, export multi-listed domestic securities (including inward listed shares) to a foreign securities register in a jurisdiction where such securities are listed, subject to tax compliance and reporting to the Financial Surveillance Department via a Central Securities Depository Participant, in conjunction with an Authorised Dealer. In this regard see section B.2(B)(i)(n) and (o) of the Authorised Dealer Manual. (c) the applicant company must appoint an approved Authorised Dealer to facilitate the reporting via the special vostro-styled account in respect of funds raised; (d) the trade and settlement of inward listed shares may only take place at market related prices and in Rand terms, where applicable; (e) all capital raised must be deployed within 30 days of being raised and recorded in the special vostro-styled account, in a manner that does not cause any distortions and/or volatility to the exchange rate; (f) in the event of a capital reduction/share buyback transaction or the delisting of an inward listed company from a South African exchange, all South African shareholders must be paid in Rand in South Africa. A notification to this effect must be submitted to the Financial Surveillance Department for record purposes; (g) South African investors may exercise their rights in terms of a rights offer without restriction; and 239 of 298 12/2025 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers H. (h) the inward listing of any additional instruments will require the specific prior approval of the Financial Surveillance Department, e.g. the utilisation of shares as acquisition currency in the purchase of CMA assets; any capital raising exercise by means of a new issue; rights offer; the issue of new shares in lieu of a cash dividend. (ii) The following condition, in addition to (i) above, is applicable to approvals in respect of the inward listing of shares utilised as acquisition currency to purchase CMA assets: (a) the transaction must be concluded on an arm’s length basis and at a fair and market related price. (iii) The following conditions are applicable to approvals in respect of the inward listing of debt instruments: (a) the applicant must appoint an approved Authorised Dealer to facilitate the reporting via the special vostro-styled account in respect of the funds raised; (b) all capital raised, must be deployed within 30 days of being raised and recorded in the special vostro-styled account, in a manner that does not cause any distortions and/or volatility to the exchange rate; (c) all settlements should take place locally in Rand; and (d) the inward listing of any additional instruments will require the specific prior approval of the Financial Surveillance Department. (iv) The following conditions are applicable to approvals in respect of the inward listing of derivative instruments: (a) for every buyer there should be a seller; (b) the loss for one party is paid as the profit of the counterparty; (c) participants may not hedge their exposures by physically trading in the underlying referenced asset unless that particular asset is also inward listed on a South African exchange; (d) all settlements of derivative contracts should take place locally in Rand; and (e) the inward listing of any additional instruments will require the specific prior approval of the Financial Surveillance Department. 240 of 298 12/2025 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers H. (v) The following conditions are applicable to approvals in respect of the inward listing of exchange traded funds by CIS managers: (a) only exchange traded funds referencing foreign assets may be inward listed on a South African exchange by local CIS managers; (b) the inward listed exchange traded funds will not be restricted in terms of the amount they can invest offshore; (c) the approved inward listed exchange traded fund must be ring-fenced and not be included in the quarterly asset allocation report of the local CIS manager for prudential purposes; (d) all subscriptions and settlements should take place locally in Rand; and (e) the listing of any additional exchange traded funds referencing foreign assets will require the specific prior approval of the Financial Surveillance Department. (I) Reporting requirements (i) All issuers of inward listed shares must furnish the Financial Surveillance Department through the Authorised Dealer concerned with the following information within three months after the authority granted has expired: (a) details on the capital raised through an initial public offering; (b) utilisation and full reporting details of all transactions concluded in terms of the authority granted; and (c) confirmation that the intended benefits to South Africa have been realised. (ii) Issuers of inward listed debt and derivative instruments referencing foreign assets must furnish the Financial Surveillance Department through an Authorised Dealer with the following information within three months after the authority granted has expired: (a) details on the capital raised through an initial public offering, if applicable; and (b) information on the deployment of the listing proceeds. (iii) All secondary trades will be reported directly to the Financial Surveillance Department by the South African exchanges in terms of standing arrangements. 241 of 298 12/2025 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers H. (J) Special dispensation to local brokers to facilitate the trading of inward listed shares (i) Local brokers are allowed to purchase inward listed shares offshore and to transfer such shares to the South African section of the register as a book-building exercise and to enhance liquidity on a South African exchange. (ii) This dispensation is confined to inward listed shares and brokers may warehouse such shares for a maximum period of 30 days only. ---oOo--- 242 of 298 12/2025 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers I.1 I.1 Local financial assistance to affected persons and non-residents (A) Introduction (i) Regulation 3(1)(e) and (f) prohibits the granting of local financial assistance to, as well as the acceptance of collateral from, affected persons and non-residents. (B) General (i) The lender is obliged to obtain exemption from the provisions of Regulation 3(1)(f). It is therefore the lender’s responsibility to establish whether or not a prospective borrower is an affected person or a non-resident. (ii) For ease of administration, any application for exemption from the aforementioned Regulation must be submitted in the name of the borrower. (C) Affected persons availing of local financial assistance in respect of transactions other than financial transactions and the acquisition of residential property (i) Authorised Dealers are exempted from the provisions of Regulation 3(1)(e) and (f) and may grant or authorise local financial assistance facilities to affected persons without restriction. (D) Affected persons availing of local financial assistance in respect of financial transactions and the acquisition of residential property (i) Authorised Dealers are exempted from the provisions of Regulation 3(1)(e) and (f) and may grant or authorise local financial assistance facilities to affected persons where the funds to be borrowed are required for financial transactions and/or the acquisition of residential property in South Africa, provided the 1:1 ratio applies, i.e. for every R1 in cash or assets that a non-resident introduces or owns, such non-resident may borrow an equivalent amount in the local market. (ii) Financial transactions include, inter alia, the purchase and sale of any securities (listed or unlisted), repurchase agreements and any derivative transactions on securities. (E) Non-residents (i) Authorised Dealers may grant or authorise local financial assistance facilities to non-residents in respect of bona fide foreign direct investment in South Africa without restrictions, except where the funds are required for financial transactions and/or the acquisition of residential or commercial property in South Africa, the 1:1 ratio will apply. 243 of 298 6/2021 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers I.1 (ii) As an exception to (i) above, Authorised Dealers may grant or authorise local financial assistance facilities to non-residents living and working in South Africa in respect of the acquisition of residential property, subject to normal lending criteria. (iii) Any facility being made available to a non-resident party must be secured by an unencumbered Rand deposit or Rand based asset of equal or higher value. In addition, any facility accorded to the non-resident in respect of the aforementioned may not cause the borrower to exceed 100 per cent of the Rand value of funds introduced from abroad and invested locally. (iv) If facilities are granted for the acquisition of fixed property, such facilities may not be increased at any stage based on a revaluation of the property in question. (F) Local financial assistance to affected persons or non-residents against a guarantee issued by an affected person or non-resident (i) Exemption from the provisions of Regulation 3(1)(e) is hereby granted to a local lender where such facilities granted are secured against a guarantee from an affected person or a non-resident. CFC and foreign currency account balances may also be accepted as security for local financial assistance. ---oOo--- 244 of 298 6/2021 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers I.2 I.2 Local facilities to non-residents (A) Short-term trade finance extended by a local Authorised Dealer to a non-resident directly related to the export of goods or services from South Africa (i) In order to facilitate the export of goods from South Africa, the Financial Surveillance Department is prepared to permit local Authorised Dealers, on application, to extend short-term finance facilities denominated in Rand or a foreign currency to the non-resident importer or his/her banker abroad on the conditions mentioned below. (a) Finance facilities denominated in Rand (aa) The facilities must relate to the post-shipment finance of the export of a specific shipment of goods and at the time of drawdown, the local Authorised Dealer extending these facilities must view the prescribed SARS Customs Declaration. (bb) The foreign currency proceeds eventually received in South Africa and/or payments received from any Non-resident Rand account, must be utilised to liquidate the aforementioned short-term export finance facility. The relevant Financial Surveillance Department requirements relating to the reporting in terms of the Reporting System and the observance of the 30-day rule must be complied with. (cc) The overall finance period, including any initial credit granted by the exporter, may not exceed six months from date of shipment of the underlying goods from South Africa unless the dispensation outlined in section B.18(B)(i)(b) of the Authorised Dealer Manual has been granted, when the overall finance period, including any initial credit granted by the exporter, may not exceed 12 months from date of shipment of the underlying goods from South Africa. An export finance facility may be extended in the event of the overseas importer requiring an extension of the original credit period, provided that the overall finance periods set out above are not exceeded. (dd) The facility must be repaid with foreign currency and/or by payment from a Non-resident Rand account. No facility may be drawn down where the proceeds of the underlying export transaction have already been received. (b) Finance facilities denominated in a foreign currency (aa) The facilities being extended must be funded, in turn, from foreign currency placements attracted and/or lines of credit 245 of 298 6/2021 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers I.2 obtained from correspondent banks abroad for that specific purpose. (bb) The facilities must relate to the pre-shipment or post-shipment finance of the export of a specific consignment of goods. (cc) The local Authorised Dealer extending these facilities must ensure that at the time of draw down, the foreign currency amount of the drawing is converted to Rand and the relevant Financial Surveillance Department requirements, including the reporting of transactions in terms of the Reporting System and the observance of the 30-day rule, are fully complied with. (dd) The foreign currency proceeds eventually received in South Africa must be utilised to liquidate the aforementioned short- term export finance facility. (ee) The overall finance period including any initial credit granted by the exporter may not exceed six months from date of shipment of the underlying goods from South Africa or unless the dispensation outlined in section B.18(B)(i)(b) of the Authorised Dealer Manual has been granted, when the overall finance period including any initial credit granted by the exporter, may not exceed 12 months from date of shipment of the underlying goods from South Africa. An export finance facility may be extended in the event of the overseas importer requiring an extension of the original credit period, provided that the overall finance periods set out above are not exceeded. (ff) The facility must be repaid with foreign currency and/or by payment from a Non-resident Rand account. No facility may be drawn down where the proceeds of the underlying export transaction have already been received. (c) In the application to the Financial Surveillance Department for approval to extend short-term foreign finance facilities, relating to the export of goods from South Africa, to non-residents, without obtaining our prior written approval in each instance, Authorised Dealers must undertake to observe the guidelines enumerated above and all other relevant Financial Surveillance Department directives. 246 of 298 6/2021 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers I.2 (B) Finance facilities extended by a local Authorised Dealer not related to the export of goods and services from South Africa (i) Foreign currency denominated finance facilities extended to non-residents for utilisation outside South Africa in terms of section B.2(I) of the Authorised Dealer Manual are not subject to the requirements of Regulations 3(1)(e) and (f). (ii) Rand denominated finance facilities extended to non-residents for utilisation within South Africa in terms of section B.2(I) of the Authorised Dealer Manual are subject to the conditions as outlined in section I.1 of the Authorised Dealer Manual. ---oOo--- 247 of 298 6/2021 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers I.3 I.3 Borrowing abroad by residents (A) Fraudulent practices involving purported foreign loan facilities such as advance fee fraud (i) Any applications for foreign currency to meet the purported cost of raising fees or administrative charges in connection with any proposed borrowing abroad by residents must be referred to the Financial Surveillance Department for prior written approval with full details of the terms of the proposed loan together with the original documentary evidence submitted in support of the request. (ii) Furthermore, should Authorised Dealers be approached by prospective borrowers with the request to issue, on the borrower’s behalf, stand-by letters of credit or other forms of guarantees, make promissory notes or avalise promissory notes or other forms of debt instruments made by the borrower, in favour of the lender, all such requests must be referred to the Financial Surveillance Department for approval with full details as mentioned above. (B) Authority to Authorised Dealers (i) Authorised Dealers may approve applications by residents, to avail of inward foreign loans and foreign trade finance facilities from any non- resident, subject to the specific criteria applicable to inward foreign loans being adhered to and that such loans are recorded via the Loan Reporting System. (ii) Reporting of loans (a) To facilitate the correct and accurate reporting of inward foreign loans and foreign trade finance facilities, a web based Loan Reporting System can be accessed from the South African Reserve Bank website: www.resbank.co.za, by following the links: Financial Surveillance>Authorised Dealers>Loan Reporting System. (b) All loans reported via the Loan Reporting System will be monitored by the Financial Surveillance Department and any inconsistencies will be queried with the specific Authorised Dealer concerned. (iii) Application requirements (a) All applications for inward foreign loans and foreign trade finance facilities must, inter alia, contain the following information: (aa) full names of the local borrower; (bb) identity number or temporary resident permit number or registration number of the borrower; 248 of 298 6/2021 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers I.3 (cc) full names of the foreign lender; (dd) domicile of the foreign lender; (ee) relationship between the foreign lender and the borrower; (ff) denomination of the loan; (gg) currency and amount of principal sum; (hh) interest rate and margin; (ii) purpose of the loan; (jj) details of the type of security required, if any; (kk) tenor. In instances where a loan will be repaid at a fixed future date, the date on which the loan will be repaid must be provided and, where a loan will be repaid in instalments, the date of the first instalment should be provided as well as the interval of the instalments, e.g. monthly/quarterly intervals; (ll) copy of the loan agreement, if available/applicable; (mm)full details of early repayment options, as well as currency switch options, if any; (nn) in the case of foreign trade finance facilities, written confirmation from the borrower to the effect that the relative import or export transaction is not being financed elsewhere; and (oo) detail of any commitment fees, raising fees and/or any other administration fees payable by the borrower. (iv) Adjudication process (a) The following criteria must be strictly applied by Authorised Dealers when adjudicating applications for inward foreign loans and foreign trade finance facilities: (aa) the tenor of each loan must be at least one month; (bb) the loan funds may not be invested into foreign sinking funds; 249 of 298 14/2026 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers I.3 (cc) no upfront payment of commitment fees, raising fees and/or any other administration fees are payable by the borrower; (dd) the above-mentioned fees may be paid from South Africa once the loan funds have been received and converted into Rand locally provided that such fees do not exceed 5 per cent of the principal sum; (ee) early repayments may be effected offshore, provided that the relevant loans are fully drawn down, reported correctly on the Loan Reporting System and that there are no anomalies on the Loan Reporting System; (ff) a change request must be submitted by the Authorised Dealer on the Loan Reporting System, confirming that loan funds will be received from a Non-resident Rand account. In addition, the Authorised Dealer must submit a change request on the Loan Reporting System of any drawdowns from the Non- resident Rand account as well as any capital or interest payments to the Non-resident Rand account. Also see section E.(A)(ii)(d) of the Authorised Dealer Manual; and (gg) the interest rate applicable to the new foreign loan should be market related in the country of denomination or normal in the trade concerned. With regard to transactions involving related parties, Authorised Dealers must receive confirmation from senior management of the applicant company that transfer pricing documentation is maintained as prescribed by the South African Revenue Service. Authorised Dealers must refer to the SARS’s Interpretation Note No.127 dated 17 January 2023 titled "Determination of the Taxable Income of Certain Persons from International Transactions: Intra-Group Loans” dealing with the transfer pricing and interest limitation rules in relation to cross-border loans between connected persons, thus forming part of the transfer pricing rules. The aforementioned Interpretation Note is available on the website of SARS at www.sars.gov.za. (v) Applications to be submitted to the Financial Surveillance Department (a) Authorised Dealers must submit an application to the Financial Surveillance Department for consideration in the following instances: (aa) regularisation of all unauthorised inward foreign loans and foreign trade finance facilities; (bb) loan draw-downs, capital and interest payments in respect of foreign trade finance facilities for imports/exports where the transactions will not be reported; 250 of 298 14/2026 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers I.3 (cc) any other instances where the Reporting System will not reflect changes to the original loan; (dd) any other instances subsequent to the original loan approval to reflect changes to the original loan, interest rate, capital repayments to non-resident third parties other than the original lender on record with the Financial Surveillance Department and instances where funds are draw-down or are to be received from parties other than the original lender; (ee) any unauthorised increase/decrease of the principal amount of the foreign loan; (ff) capitalisation of interest; (gg) compounding of interest; (hh) conversion of the loan to share capital; (ii) consolidation of loans; (jj) all loans where commitment fees, raising fees and/or any other administrative fees exceed 5 per cent of the principal sum; (kk) issuance of redeemable preference shares to non-residents; and (ll) all cases where the criteria outlined in (iv) above cannot be met. (vi) Capital repayments (a) Authorised Dealers may provide foreign currency for the repayment of inward foreign loans and foreign trade finance facilities, inclusive of loans and trade finance facilities approved by the Financial Surveillance Department prior to 2007-10-01, equal to the funds drawn down under a specific loan on the due date. Capital and interest payments must be reported separately on the Reporting System. (b) Capital repayments must be strictly in accordance with the terms of the loan. (c) In the case of foreign trade finance facilities, repayments of such facilities must be reported under category 106 or 801 and interest payments under category 309-06 of the Reporting System. (vii) Guarantees 251 of 298 6/2021 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers I.3 (a) Authorised Dealers may issue guarantees in favour of non-resident lenders as and when required. (viii) Draw-downs (a) Authorised Dealers must ensure that loan draw-downs, inclusive of any draw-down advices in respect of loans approved by the Financial Surveillance Department prior to 2007-10-01, are reported on the Reporting System or, where no flow of funds will take place, a suitable application advice must be submitted to the Financial Surveillance Department. (b) The principal sum of the loan must be introduced within a period of 12 months and may not exceed the authorised amount of the loan. Any extensions in this regard, must be advised to the Financial Surveillance Department. (ix) Retention of documentation (a) Authorised Dealers must be able to substantiate all information submitted via the Loan Reporting System. For inspection purposes, documentary evidence must be retained for a period of five years after the full repayment of the loan. (C) Trade finance, long-term loans and working capital loans extended by Authorised Dealers (i) Short-term trade finance (a) Imports (aa) Authorised Dealers may, on application to the Financial Surveillance Department or unless exempted, extend short-term foreign trade finance facilities, relating to the importation of goods into South Africa to residents subject to the following conditions: (1) the facilities being extended by the local bank concerned are funded, in turn, from foreign currency placements attracted and/or lines of credit obtained from correspondent banks abroad for this specific purpose; (2) the facilities relate to the payment for the importation of a specific consignment of goods. In this regard, the local bank concerned may bundle a number of payments together when extending a short-term foreign trade finance facility, but must ensure that payments for the underlying transactions have been made not more than six weeks prior to the date of draw-down of the facility or 252 of 298 6/2021 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers I.3 that payments will be made within six weeks from the date of draw-down of the facility. In all instances the draw-down of the facility may only take place on or after date of shipment, except for advance payments where the draw-down can be done prior to the goods being shipped, provided that the advance payment complies with the provisions outlined in sections B.1(D)(i) and (ii) of the Authorised Dealer Manual; (3) the Authorised Dealer extending these facilities ensures that the underlying payments comply fully with the relevant Financial Surveillance Department authorities and directives, including the viewing of substantiating documentation and the reporting in terms of the Reporting System on repayment of the facility; (4) the overall finance period, including any initial supplier’s credit taken, does not exceed 12 months from date of shipment of the underlying goods to South Africa; and (5) no such facility may be drawn down unless the supplier had been paid or will be paid with the proceeds of the said facility and no other financial commitment exists in regard to the underlying importation, except where a batch of import payments are being bundled into one draw-down under a short-term foreign trade finance facility. (b) Exports (aa) Authorised Dealers may, on application to the Financial Surveillance Department or unless exempted, extend short- term foreign trade finance facilities relating to the export of goods from South Africa to residents, subject to the following conditions: (1) the facilities being extended by the Authorised Dealer concerned are funded, in turn, from foreign currency placements attracted and/or lines of credit obtained from correspondent banks abroad for this specific purpose; (2) the facilities relate to the pre- or post-shipment finance of the export of a specific consignment of goods; (3) the Authorised Dealer extending these facilities ensures that at the time of draw-down, the foreign currency amount of the drawing is converted into Rand and the relevant Authorised Dealer requirements, and the observance of the 30-day rule, are complied with. The reporting in terms of the Reporting System must take 253 of 298 6/2021 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers I.3 place upon the receipt of the export proceeds from abroad; (4) the foreign currency draw-down under a short-term export finance facility must be treated as the early accrual of the export proceeds, be converted to Rand and further administered as such. Should the exporter be required to effect any foreign payments specifically relating to the export transactions, such costs may be paid in foreign currency, without first being converted to Rand. Authorised Dealers must view suitable documentation pertaining thereto and ensure the correct reporting of the transaction in terms of the FinSurv Reporting System; (5) the foreign currency eventually received from the overseas importer is not converted to Rand, but is applied in repayment of the export finance facility; (6) where another Authorised Dealer has been instructed to receive the proceeds, it would pass these on to the Authorised Dealer extending the trade finance facility by crediting the latter’s nostro account, thus ensuring that it is always possible to relate all outstanding facilities to specific current export transactions; (7) the overall finance period, including any initial credit granted by the exporter, does not exceed six months from date of shipment of the underlying goods from South Africa, unless the dispensation outlined in section B.18(B)(i)(b) of the Authorised Dealer Manual has been granted, when the overall finance period including any initial credit granted by the exporter may not exceed 12 months from date of shipment of the underlying goods from South Africa. An export finance facility may be extended in the event of the overseas importer requiring an extension of the original credit period, provided that the overall finance periods set out above are not exceeded; (8) the facility must be repaid with foreign currency. No facility may be drawn down where payment of the underlying export transaction has already been received; (9) in the event of the overseas importer paying before the relative export finance facility has fallen due for repayment and effecting an early repayment thereof is not possible, the local exporter may either retain these foreign currency funds in a CFC account to meet his/her export finance liability on due date, or alternatively 254 of 298 6/2021 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers I.3 convert such funds to Rand. Should the local exporter opt for the latter, the foreign finance facility must from then on be administered as a short-term working capital loan and be reported as such in subsequent monthly returns submitted to the Financial Surveillance Department; and (10) in the event the overseas importer does not effect payment or only makes partial payment, the balance outstanding must from then on be administered as a short-term working capital loan and be reported as such in subsequent monthly returns submitted to the Financial Surveillance Department, who must also be informed of the overseas importer’s default. (bb) The facilities enumerated above would not be included in the calculation of an affected person’s local borrowing levels in terms of the provisions of Regulation 3(1)(f), provided that the facilities being extended by the local bank concerned are funded, in turn, from foreign currency placements attracted and/or lines of credit obtained from correspondent banks abroad for the specific purposes mentioned. (ii) Short-term working capital loans (a) Authorised Dealers may, on application to the Financial Surveillance Department or unless exempted, extend short-term foreign currency working capital loan facilities, specifically relating to the financing of current assets, other than those arising from the import or the export of goods into or from South Africa, to residents on the following basis: (aa) the facilities being extended by the Authorised Dealer concerned are funded, in turn, from foreign currency placements attracted and/or lines of credit obtained from correspondent banks abroad for this specific purpose; and the facilities relate to the financing of a resident’s current assets other than those arising from the importation or the exportation of goods into or from South Africa. (b) The facilities enumerated above would not be included in the calculation of an affected person's local borrowing levels in terms of the provisions of Regulation 3(1)(f), provided that the facilities being extended by the Authorised Dealer concerned are funded, in turn, from foreign currency placements attracted and/or lines of credit obtained from correspondent banks abroad for this specific purpose. (iii) Long-term loans 255 of 298 10/2022 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers I.3 (a) In the event of an Authorised Dealer wishing to interpose itself locally and assume the funding of a capital goods import by substituting either local funding or shorter-term foreign currency finance facilities and, in so doing, bars direct utilisation of new long- term lines of credit, which were available for that specific purpose (by e.g. negotiating any bills of exchange or promissory notes, transferring or providing any security or acknowledging any debt), the Financial Surveillance Department's prior approval must be obtained, if not exempted. (b) Should an Authorised Dealer in similar circumstances wish to interpose itself through a subsidiary or branch office outside South Africa, it may do so provided that such transactions are financed solely out of the offshore entity’s own resources abroad. It follows that no funding may be provided from the CMA to the offshore entity to assist either wholly or partially, with the financing of such a transaction. Furthermore, such financing must run for the full credit period originally agreed and the resident debtor may not repay such financing at an earlier date, without the Financial Surveillance Department's prior approval. (c) Authorised Dealers must obtain prior written approval from the Financial Surveillance Department before entering into export credit facility agreements with correspondent banks abroad. Furthermore, the prior written approval from the Financial Surveillance Department must be obtained for all facilities subsequently availed of under such agreements where the overall finance period, including any initial supplier’s credit, exceeds 12 months from date of shipment of the underlying goods to South Africa. (d) The facilities mentioned above would not be included in the calculation of an affected person’s local borrowing levels in terms of the provisions of Regulation 3(1)(f), provided that the facilities being extended by the Authorised Dealer concerned are funded, in turn, from foreign currency placements attracted and/or lines of credit obtained from correspondent banks abroad for that specific purpose. (D) Expiry of the debt standstill arrangements on 2001-08-15 (a) Authorised Dealers may continue to repay South African foreign debt covered in the ‘1994 Debt Arrangement Letter’ dated 1993-09-09, provided that the applicant is in possession of a computer generated ‘Standstill Authorisation Printout’. Any repayment request which is not accompanied by such printout must be referred to the Financial Surveillance Department. 256 of 298 6/2021 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers I.3 (E) Corporate foreign debt issuance (i) Authorised Dealers may approve requests for foreign bond and note issuances by corporates with recourse to South Africa, e.g., a guarantee from South Africa and the issuance of shares in the South African entity, subject to the following conditions: (a) South African private individuals may only participate in the foreign bond and/or note issuances utilising their foreign capital allowance. Similarly, qualifying South African institutional investors may participate in the foreign bond and/or note issuances in terms of the prudential limit. (b) The coupon payable must be market related in the jurisdiction where the foreign bond and/or notes are issued. (c) Where the foreign bond and/or note proceeds are being deployed offshore, all costs and expenses associated with the bond and/or note issuances as well as the servicing of the coupon payments and repayments of the principal amount must be serviced from offshore. (d) Where the foreign bond and/or note proceeds are introduced into South Africa, the transaction must be recorded via an Authorised Dealer on the Loan Reporting System. (e) Within 30 days of the bond and/or note issuances offshore, the Financial Surveillance Department requires to be advised of the uptake, the amount of capital raised and the all-inclusive cost of the bond and/or notes issued. (f) The Financial Surveillance Department annually requires to be furnished with a report indicating the balance outstanding on the principal amount of the debt instrument. (g) Should any guarantee issued from South Africa be called up, the Financial Surveillance Department should immediately be advised of the circumstances that gave rise thereto. ---oOo--- 257 of 298 6/2021 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers J. J. FinSurv Reporting System (A) Introduction (i) The objective of the Reporting System is to ensure accurate and comprehensive reporting of all data by Authorised Dealers on transactions, irrespective of the amount, for compilation of: (a) balance-of-payments statistics by the Economic Research and Statistics Department of the South African Reserve Bank; (b) foreign debt statistics and repayment profiles to support monetary policy decisions; and (c) statistical information relating to the nature, volume and values of the various cross-border flows and to provide the appropriate information for economic and financial management decisions, as well as planning and policy formulation. (B) Business and Technical Specifications document (i) The complete Business and Technical Specifications document can be downloaded from the South African Reserve Bank’s website: www.resbank.co.za, by following the links: Financial Surveillance>Authorised Dealers>FinSurv Reporting System>FinSurv Reporting System documents>Business and Technical Specifications. (ii) Once access has been granted, select ‘Business and Technical Specifications, Version 3, FinSurv Business and Technical Specifications’. (iii) Reporting entities must comply with the rules specified in this document which must be read in conjunction with the Authorised Dealer Manual. (C) Operations Manual (i) The complete Operations Manual can be downloaded from the South African Reserve Bank’s website: www.resbank.co.za, by following the links: Financial Surveillance>Authorised Dealers>FinSurv Reporting System>FinSurv Reporting System documents>Operational Manual. (ii) Once access has been granted, select ‘Operations Manual, Version 3, FinSurv Operations Manual’. (iii) Reporting entities must comply with the rules specified in this document which must be read in conjunction with the Authorised Dealer Manual. 258 of 298 6/2021 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers J. (D) Offshoring and cloud computing (i) For the purpose of this subsection, the following key concepts are outlined below: Concept Description Business processes Business processes refer to FinSurv related business processes which include, but are not limited to, on-boarding of customers, exchange control compliance, sanction screenings, releasing of cross-border payments and activities relating to reporting to FinSurv. Data Data refers to cross-border transactional data, customer information and digital images of documentation, e.g. documentary evidence obtained in terms of the Authorised Dealer Manual and ADLA Manual. Customer information Customer information is data captured in the centralised customer database of reporting entities which, inter alia, includes data captured during on-boarding of a customer, client identification and verification documentation as obtained in terms of the Financial Intelligence Centre Act, 2001 (Act No. 38 of 2001). Transactional data Transactional data is cross-border transactional data reported by reporting entities to FinSurv in terms of the provisions outlined in the Authorised Dealer Manual and ADLA Manual. Digital images of Digital images of documentation include documentation documentary evidence obtained and/or stored in an electronic format by reporting entities as outlined in the Authorised Dealer Manual, ADLA 259 of 298 2/2022 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers J. Concept Description Manual or specified in terms of certain approvals granted by FinSurv. Offshoring Offshoring is the transferring of the business processes (including, but not limited to exchange control compliance), services, systems, data or infrastructure of the reporting entities to a branch or Head Office situated outside the borders of South Africa. Cloud computing Cloud computing is defined as a model for enabling convenient, on-demand network access to a shared pool of configurable computing resources (e.g. networks, servers, storage facilities, applications and services) that can be rapidly provisioned and released with minimal management effort or service provider interaction. Forms of cloud computing may include a public cloud, private cloud, community cloud or hybrid cloud. Computers providing capacity can be in different geographical locations which may be subject to different laws, business practices and government oversight. Local outsourcing Local outsourcing is the subcontracting of business processes (including, but not limited to exchange control compliance), functions, services, systems, data or infrastructure of reporting entities, as contemplated in the Authorised Dealer Manual and ADLA Manual, to a third party within South African jurisdiction but 260 of 298 2/2022 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers J. Concept Description not based at the premises of the relevant reporting entities. International International outsourcing is the subcontracting of outsourcing business processes (including, but not limited to exchange control compliance), functions, services, systems, data or infrastructure of reporting entities, as contemplated in the Authorised Dealer Manual and ADLA Manual to a third party situated outside the borders of South Africa. Regulatory access to Regulatory access to data refers to FinSurv’s data access to data and systems. This includes access to transactional systems’ front-end and back-end systems as well as folders, servers and databases. System replication System replication refers to duplication of transactional systems’ front-end and back-end systems as well as folders, servers and databases. This also includes the replication tools used to keep transactional systems’ front- end and back-end systems as well as folders, servers and databases synchronised. Data replication Data replication refers to the process of copying data from one location to another, including the replication tools used. (ii) The Financial Surveillance Department is prepared to consider requests for the following offshoring and cloud computing models relevant to data, infrastructure and systems, as contemplated in the Authorised Dealer Manual: (a) offshoring within a reporting entity’s international head office and/or group; (b) cloud computing relating to data, infrastructure and systems; 261 of 298 2/2022 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers J. (c) local outsourcing of data, infrastructure and systems; and (d) real-time system and data replication to South Africa from an international head office and/or group. (iii) The Financial Surveillance Department is not agreeable to the following offshoring and cloud computing models: (a) offshoring, local and international outsourcing or cloud computing of functions, services and business processes as contemplated in the Authorised Dealer Manual; and (b) any form of offshoring and cloud computing models where data is stored in a sanctioned country or in jurisdictions that may inhibit effective access to data. (iv) Requests for utilising offshoring and cloud computing will only be considered, on a case-by-case basis, upon the submission of a formal application to the Financial Surveillance Department. (v) The following requirements must be adhered to: (a) Agreements (aa) A documented legally binding agreements or contracts must be concluded with the reporting entity’s Head Office or any other third party that forms part of the proposed operating model. These agreements or contracts must state, but not be limited to, the following: (1) data relevant to the reporting entity will be ring-fenced from other activities of the data centre to be used and should stipulate how it will be achieved; (2) data will be retained for a minimum period of five years, as required by the Authorised Dealer Manual; and data will be accessible immediately, but not later than 48 hours, from the source systems and extractable in the format prescribed in (h)(gg) below. (bb) Any amendments to the above agreements/contracts with regard to a change in the approved operating model requires prior approval of the Financial Surveillance Department. (b) Risk assessment (aa) Prior to undertaking a particular offshoring and cloud computing initiative, a reporting entity must perform a risk assessment, which must be documented. 262 of 298 2/2022 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers J. (bb) The risk assessment must identify all risks involved and determine whether adequate controls can be implemented to mitigate any potential risks. (cc) A reporting entity must have documented processes and procedures in place to, on a continuous basis identify, assess, manage and mitigate risks associated with offshoring and cloud computing. (dd) Risks must be adequately understood and managed prior to entering into an offshoring and cloud computing arrangement. Factors that must be addressed include, inter alia, continuity, data protection, regulatory access to data and regulatory compliance. (c) Business continuity plan (aa) A reporting entity must satisfy itself that the data centre hosting the data must have extensive disaster recovery and business continuity processes and procedures in place. (bb) Regular disaster recovery tests must be performed to ensure data can be recovered. (d) Storage of data (aa) All data must be ring-fenced without the ability to be updated by unauthorised persons. (bb) Cross-border transactional data must be stored directly into the source system, i.e. the core accounting system. (cc) Customer data must be stored directly from the source system, i.e. the centralised customer database. (dd) In an event of the reporting entity terminating its operations in South Africa for any reason whatsoever, data for five years preceding the date of termination, must be replicated to South Africa by the reporting entity in a format accessible by the Financial Surveillance Department and within an agreed period. (e) Regulatory access to data (aa) Any data required by the Financial Surveillance Department must be made available for access immediately, but not later than 48 hours, by the reporting entity and should forthwith be furnished to the Financial Surveillance Department in the format prescribed in paragraph (h)(gg) below. 263 of 298 2/2022 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers J. (bb) Information must be made available, upon request, at no cost to the Financial Surveillance Department. (cc) The use of offshoring and cloud computing may not in any way infringe on the Financial Surveillance Department’s mandated access to data. (f) Jurisdiction (aa) A reporting entity must ensure that data is not stored in a sanctioned country or in jurisdictions that may inhibit effective access to data. (bb) In considering foreign jurisdictions, a reporting entity must take into account the wider political and security stability of the particular jurisdiction as well as the legislative requirements in terms of the foreign jurisdiction concerned. This should include consideration of the legal enforcement provisions within a jurisdiction. (g) Procedure to update data back to source (aa) From time to time a reporting entity may be required to amend certain data, e.g. balance of payments categories or cancel the reporting of a transaction. This might have an impact on the same source reporting principle, as all changes must be updated back to the source, i.e. transactional or accounting system. (h) System requirements (aa) Data in any offshore data centre must at the least be encrypted through modern encryption technology. (bb) All cryptographic keys used in a storage encryption solution must be secured and managed properly to support the security of the solution. (cc) To prevent the non-recovery of encrypted data, extensive planning of key management processes, procedures, and technologies should be performed before implementing storage encryption technologies. This planning should include all aspects of key management, including key generation, use, storage, recovery and destruction. (dd) Only authorised personnel and systems must be able to retrieve, decrypt and process data through any network or cloud. (ee) The foreign service provider should have very strong, 264 of 298 2/2022 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers J. documented and tested cyber controls to protect data against cybercrime. (ff) A reporting entity must verify adherence to the agreed information security requirements, i.e. through third party assurance audits and/or any other security testing requirements such as vulnerability scanning and penetration testing. (gg) Data requested by the Financial Surveillance Department should be provided in a standard report format, as prescribed in the Authorised Dealer Manual, such as a semi-colon delimited file (e.g.CSV). (i) Other regulatory bodies and legislative requirements (aa) A reporting entity must consider the offshoring and cloud computing models in the context of its overarching regulatory obligations, which may include obligations to the Financial Intelligence Centre and the Prudential Authority who have different statutory objectives and may, therefore, have different requirements. (bb) A reporting entity must acquaint itself with the relevant provisions of the applicable legislation, e.g. the Protection of Personal Information Act, 2013 (Act No. 4 of 2013) and Financial Intelligence Centre Act, 2001 (Act No. 38 of 2001). (vi) Applications to the Financial Surveillance Department should, inter alia, include the following: (a) confirmation that the reporting entity complies with the requirements and assurance set out in (v) above and (vii) below; and a copy of the business case which should outline, inter alia, the following: (aa) proposed offshoring and cloud computing operating model; (bb) details of all relevant offshoring and cloud computing third parties or service providers; (cc) benefits and risks involved; (dd) confirmation that the management and mitigation of risks is done in order to maximise the benefits through effective end- to-end governance practices; (ee) jurisdictions where data will be stored; (ff) service, deployment and security models of offshoring and cloud computing applicable to the different classifications of 265 of 298 2/2022 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers J. data; (gg) how data loss and breaches will be dealt with; (hh) procedure to ensure that the reporting requirements stated in the Authorised Dealer Manual are adhered to; (ii) procedures to be implemented to accommodate requests to update data from the source systems; and (jj) strategy to be implemented in the event that offshoring and cloud computing operations are required to be moved from one provider to another. (vii) Assurances (a) The compliance with all the requirements listed in (v) above, must be contained in the Managerial Letter of Comfort to be provided to the Financial Surveillance Department on an annual basis. (viii) Remedies (a) Any failure by a reporting entity to comply with the above mentioned requirements may result in the suspension of authorities provided by the Financial Surveillance Department or may cause the Financial Surveillance Department to invoke remedies available to it in terms of the Exchange Control Regulations. (E) Inward payments (i) General (a) Authorised Dealers must ensure the correct reporting of all cross-border foreign exchange transactions irrespective of the amounts and currencies involved. (b) Data pertaining to transactions must be submitted to the Financial Surveillance Department in the various formats outlined in the Business and Technical Specifications document within two business days from the value date of the transaction. (c) Rejections by the Financial Surveillance Department must be corrected and re-submitted in the agreed format within one business day from the date of the rejection. (d) Warning messages by the Financial Surveillance Department must be thoroughly investigated and actioned within one business day from the date of the warning message and, where required, the appropriate remedial actions must be taken. 266 of 298 2/2022 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers J. (ii) Integrated form (a) The integrated form is applicable to all transactions reported under the ‘BOPCUS’, ‘NON RESIDENT RAND’ and ‘BOPDIR’ modules. (b) Since transactions reported under the ‘BOPCARD RESIDENT’ module are fully electronic, the card-holder will be held responsible for transactions concluded by utilising either a debit or credit card. (c) Transactions reported by reporting entities under the ‘NON REPORTABLE’, ‘INTERBANK’ and ‘BOPCARD NON RESIDENT’ modules do not require an integrated form. (d) Authorised Dealers must make use of an integrated form in respect of all inward payments either in hard copy or electronic format, to obtain data required for the processing and reporting of all cross- border foreign exchange transactions to the Financial Surveillance Department. (e) When the client is physically present at the Authorised Dealer, the integrated form must be completed and signed by the client in respect of all inward payments. (f) When the client is not physically present to complete and sign the integrated form, the Authorised Dealer may complete and sign the integrated form either physically or electronically, provided that the Authorised Dealer has been authorised or mandated to do so by means of a letter, a facsimile message, an email message or by a recorded telephonic message to act on the client’s behalf. The client’s communication must be retained by the Authorised Dealer for a period of five years for inspection purposes. (g) As an exception to the arrangement outlined in the preceding paragraph, an integrated form need not be completed by the client of an Authorised Dealer in respect of inward payments under R50 000 per transaction, subject to the following conditions: (aa) only transactions in respect of a natural person who is a client of the Authorised Dealer, will qualify; (bb) the purpose of the transaction must be disclosed in either fields 70, 72 or 77 of the SWIFT customer transfer message, in a clear and unambiguous manner; (cc) where additional information is required to report a transaction, e.g. exports, loans, this procedure may not be applied; 267 of 298 2/2022 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers J. (dd) all transactions must be reported in terms of the Reporting System in line with the requirements of the Business and Technical Specifications document; (ee) where no official mandate is in place, a confirmation must be sent by the Authorised Dealer to the client on conclusion of each transaction, containing the reporting category and clearly stipulating that should the client not be in agreement with the category selected and reported to the Financial Surveillance Department, the client must dispute same within a period of 14 days; and (ff) a copy of the communication to the client must be retained for a period of five years for inspection purposes. (h) In cases where the client transacts with the Authorised Dealer via an electronic interface in terms of this dispensation, the Authorised Dealer must ensure that the underlying agreements legally bind the client in terms of the correctness of the information provided via the electronic medium. (i) The above-mentioned dispensation does not apply to an ADLA. (iii) Declaration (a) The following declaration must be included in the integrated form: “I, the undersigned ……………………………………., hereby declare that: 1. I have read this document and know and understand the contents thereof; 2. the information furnished above is in all respects both true and correct; 3. the currency applied for will only be used for the specific purpose stated herein; 4. the documentation presented in support of this application is in all respects authentic; 5. I have been informed of the limit applicable to the above transaction and confirm that this limit will not be exceeded as a result of the conclusion of this transaction; and I consent to this information being provided to the South African Revenue Service and/or the Financial Intelligence Centre.” 268 of 298 2/2022 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers J. (F) Balance of payments categories applicable to BOPCUS AND BOPDIR - inward payments A balance of payment category consists of a category and in some cases a category and a sub-category is also applicable. (i) Merchandise Transaction adjustments

100 Adjustments / Reversals / Refunds applicable to merchandise Exports : Advance payments 101 01 Export advance payment (excluding capital goods, gold, platinum, crude oil, refined petroleum products, diamonds, steel, coal, iron ore and goods exported via the South African Post Office) 101 02 Export advance payment - capital goods 101 03 Export advance payment – gold 101 04 Export advance payment – platinum 101 05 Export advance payment – crude oil 101 06 Export advance payment – refined petroleum products 101 07 Export advance payment – diamonds 101 08 Export advance payment – steel 101 09 Export advance payment – coal 101 10 Export advance payment – iron ore 101 11 Export advance payment - goods exported via the South African Post Office 102 01 Not allocated 102 02 Not allocated 102 03 Not allocated 102 04 Not allocated 102 05 Not allocated 102 06 Not allocated 102 07 Not allocated 102 08 Not allocated 102 09 Not allocated 102 10 Not allocated 102 11 Not allocated Exports: 103 01 Export payments (excluding capital goods, gold, platinum, crude oil, refined petroleum products, diamonds, steel, coal, iron ore and goods exported via the South African Post Office) 103 02 Export payment - capital goods 103 03 Export payment – gold 103 04 Export payment – platinum 103 05 Export payment – crude oil 103 06 Export payment – refined petroleum products 269 of 298 2/2022 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers J. 103 07 Export payment – diamonds 103 08 Export payment – steel 103 09 Export payment – coal 103 10 Export payment – iron ore 103 11 Export payment – goods exported via the South African Post Office 104 01 Not allocated 104 02 Not allocated 104 03 Not allocated 104 04 Not allocated 104 05 Not allocated 104 06 Not allocated 104 07 Not allocated 104 08 Not allocated 104 09 Not allocated 104 10 Not allocated 104 11 Not allocated Exports: Other 105 Consumables acquired in port

106 Trade finance repayments in respect of exports

107 Export proceeds where the Customs value of the shipment is less than R500

108 Export payments where goods were declared as part of passenger baggage and no UCR is available 109 01 Proceeds for goods purchased by non-residents where no physical export will take place, excluding gold, platinum, crude oil, refined petroleum products, diamonds, steel, coal and iron ore as well as merchanting transactions 109 02 Proceeds for gold purchased by non-residents where no physical export will take place, excluding merchanting transactions 109 03 Proceeds for platinum purchased by non-residents where no physical export will take place, excluding merchanting transactions 109 04 Proceeds for crude oil purchased by non-residents where no physical export will take place, excluding merchanting transactions 109 05 Proceeds for refined petroleum products purchased by non- residents where no physical export will take place, excluding merchanting transactions 109 06 Proceeds for diamonds purchased by non-residents where no physical export will take place, excluding merchanting transactions 109 07 Proceeds for steel purchased by non-residents where no physical export will take place, excluding merchanting transactions 109 08 Proceeds for coal purchased by non-residents where no physical export will take place, excluding merchanting transactions 270 of 298 2/2022 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers J. 109 09 Proceeds for iron ore purchased by non-residents where no physical export will take place, excluding merchanting transactions 109 10 Not allocated 110 Merchanting transaction 111 Not allocated 112 Not allocated (ii) Intellectual property and other services Transaction adjustments 200 Adjustments / Reversals / Refunds applicable to intellectual property and service related items Charges for the use of intellectual property

201 Rights assigned for licences to reproduce and/or distribute

202 Rights assigned for using patents and inventions (licensing)

203 Rights assigned for using patterns and designs (including industrial processes)

204 Rights assigned for using copyrights

205 Rights assigned for using franchises and trademarks Disposal of intellectual property (excluding computer related and audiovisual)

210 Disposal of patents and inventions

211 Disposal of patterns and designs (including industrial processes)

212 Disposal of copyrights

213 Disposal of franchises and trademarks Research and development

220 Proceeds received for research and development services

221 Funding received for research and development Audiovisual and related items

225 Sales of original manuscripts, sound recordings and films

226 Receipt of funds relating to the production of motion pictures, radio and television programs and musical recordings Computer software and related items

230 The outright selling of ownership rights of software 231 Computer-related services including maintenance, repair and consultancy

232 Commercial sales of customised software and related licences for use by customers

233 Commercial sales of non-customised software on physical media with periodic licence to use

234 Commercial sales of non-customised software provided on physical media with right to perpetual (ongoing) use 271 of 298 2/2022 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers J.

235 Commercial sales of non-customised software provided for downloading or electronically made available with periodic licence

236 Commercial sales of non-customised software provided for downloading or electronically made available with single payment Technical related services 240 01 Fees for processing - processing done on materials (excluding gold, platinum, crude oil, refined petroleum products, diamonds, steel, coal and iron ore) 240 02 Fees for processing - processing done on gold 240 03 Fees for processing - processing done on platinum 240 04 Fees for processing - processing done on crude oil 240 05 Fees for processing - processing done on refined petroleum products 240 06 Fees for processing - processing done on diamonds 240 07 Fees for processing - processing done on steel 240 08 Fees for processing - processing done on coal 240 09 Fees for processing - processing done on iron ore 241 Repairs and maintenance on machinery and equipment 242 Architectural, engineering and other technical services 243 Agricultural, mining, waste treatment and depollution services Travel services for non-residents 250 Travel services for non-residents - business travel 251 Travel services for non-residents - holiday travel

252 Foreign exchange accepted by residents from non-residents Travel services for residents 255 Travel services for residents - business travel 256 Travel services for residents - holiday travel Travel services in respect of third parties

260 Proceeds for travel services in respect of third parties - business travel

261 Proceeds for travel services in respect of third parties - holiday travel Telecommunication and information services

265 Proceeds for telecommunication services

266 Proceeds for information services including data, news related and news agency fees Transportation services 270 01 Proceeds for passenger services - road 270 02 Proceeds for passenger services - rail 270 03 Proceeds for passenger services - sea 272 of 298 2/2022 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers J. 270 04 Proceeds for passenger services – air 271 01 Proceeds for freight services - road 271 02 Proceeds for freight services - rail 271 03 Proceeds for freight services - sea 271 04 Proceeds for freight services – air 272 01 Proceeds for other transport services – road 272 02 Proceeds for other transport services – rail 272 03 Proceeds for other transport services – sea 272 04 Proceeds for other transport services – air 273 01 Proceeds for postal and courier services – road 273 02 Proceeds for postal and courier services – rail 273 03 Proceeds for postal and courier services – sea 273 04 Proceeds for postal and courier services – air Financial services provided 275 Commission and fees

276 Proceeds for financial services charged for advice provided Construction services

280 Proceeds for construction services Government services

281 Proceeds for government services 282 Diplomatic transfers Study related services 285 Tuition fees Other business services rendered

287 Proceeds for legal services

288 Proceeds for accounting services289 Proceeds for management consulting services

290 Proceeds for public relation services

291 Proceeds for advertising and market research services

292 Proceeds for managerial services

293 Proceeds for medical and dental services

294 Proceeds for educational services 295 Operational leasing

296 Proceeds for cultural and recreational services

297 Proceeds for other business services not included elsewhere 298 Not allocated 299 Not allocated (iii) Transactions relating to income and yields on financial assets Transaction adjustments

300 Adjustments / Reversals / Refunds related to income and yields on financial assets 273 of 298 2/2022 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers J. Income receipts 301 Dividends 302 Branch profits

303 Compensation paid by a non-resident to a resident employee temporarily abroad (excluding remittances)

304 Compensation paid by a non-resident to a non-resident employee in South Africa (excluding remittances)

305 Compensation paid by a non-resident to a migrant worker employee (excluding remittances)

306 Compensation paid by a non-resident to a foreign national contract worker employee (excluding remittances) 307 Commission or brokerage

308 Rental 309 01 Interest received from a resident temporarily abroad in respect of loans 309 02 Interest received from a non-resident in respect of individual loans 309 03 Interest received from a non-resident in respect of study loans 309 04 Interest received from a non-resident in respect of shareholders loans 309 05 Interest received from a non-resident in respect of third party loans 309 06 Interest received from a non-resident in respect of trade finance loans 309 07 Interest received from a non-resident in respect of a bond 309 08 Interest received not in respect of loans 310 01 Income in respect of inward listed securities equity individual 310 02 Income in respect of inward listed securities equity corporate 310 03 Income in respect of inward listed securities equity bank 310 04 Income in respect of inward listed securities equity institution 311 01 Income in respect of inward listed securities debt individual 311 02 Income in respect of inward listed securities debt corporate 311 03 Income in respect of inward listed securities debt bank 311 04 Income in respect of inward listed securities debt institution 312 01 Income in respect of inward listed securities derivatives individual 312 02 Income in respect of inward listed securities derivatives corporate 312 03 Income in respect of inward listed securities derivatives bank 312 04 Income in respect of inward listed securities derivatives institution

313 Income earned abroad by a resident on an individual investment 314 Not allocated

315 Not allocated 274 of 298 2/2022 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers J. (iv) Transfers of a current nature Transaction adjustments 400 Adjustments / Reversals / Refunds related to transfers of a current nature Current payments 401 Gifts 402 Annual contributions 403 Contributions in respect of social security schemes

404 Contributions in respect of charitable, religious and cultural (excluding research and development)

405 Other donations / aid to government (excluding research and development)

406 Other donations / aid to private sector (excluding research and development) 407 Pensions 408 Annuities (pension related) 409 Inheritances 410 Alimony 411 01 Tax - Income tax 411 02 Tax - VAT refunds 411 03 Tax – Other 412 Insurance premiums (non life/short term) 413 Insurance claims (non life/short term) 414 Insurance premiums (life) 415 Insurance claims (life) 416 Migrant worker remittances (excluding compensation) 417 Foreign national contract worker remittances (excluding compensation)

418 Value Transfer Service (Authorised providers - for statistical purposes only) 419 Not allocated (v) Transfers of a capital nature Capital transfers and immigrants Transaction adjustments 500 Adjustments / Reversals / Refunds related to capital transfers and immigrants Capital transfers relating to government / corporate entities (excluding loans)

501 Donations to SA Government for fixed assets

502 Donations to corporate entities - fixed assets

503 Investment into property by a non-resident corporate entity

504 Disinvestment of property by a resident corporate entity 275 of 298 2/2022 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers J. Capital transfers by non-resident individuals 510 01 Investment into property by a non-resident individual 510 02 Investment by a non-resident individual - other Capital transfers by South African resident individuals Disinvestment of capital 511 01 Disinvestment of capital by a resident individual – Shares 511 02 Disinvestment of capital by a resident individual – Bonds 511 03 Disinvestment of capital by a resident individual – Money market instruments 511 04 Disinvestment of capital by a resident individual – Deposits with a foreign bank 511 05 Disinvestment of capital by a resident individual – Mutual funds / collective investment schemes 511 06 Disinvestment of capital by a resident individual – Property 511 07 Disinvestment of capital by a resident individual – Other 511 08 Not allocated Disinvestment of capital in terms of investment allowance 512 01 Not allocated 512 02 Not allocated 512 03 Not allocated 512 04 Not allocated 512 05 Not allocated 512 06 Not allocated 512 07 Not allocated 512 08 Not allocated

513 Not allocated Disinvestment of capital to a resident Foreign Currency account (Note: Categories 511/01 to 511/07 must be used) 514 01 Not allocated 514 02 Not allocated 514 03 Not allocated 514 04 Not allocated 514 05 Not allocated 514 06 Not allocated 514 07 Not allocated 514 08 Not allocated Disinvestment of capital 515 01 Not allocated 515 02 Not allocated 515 03 Not allocated 515 04 Not allocated 515 05 Not allocated 515 06 Not allocated 515 07 Not allocated 515 08 Not allocated 276 of 298 2/2022 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers J.

516 Repatriation of capital, on instruction by the Financial Surveillance Department, of a foreign investment by a resident individual in respect of cross-border flows

517 Repatriation of capital, on instruction by the Financial Surveillance Department, of a foreign investment by a resident individual originating from an account conducted in foreign currency held at an Authorised Dealer in South Africa Immigrants 530 01 Immigration 530 02 Not allocated 530 03 Not allocated 530 04 Not allocated 530 05 Not allocated 530 06 Not allocated 530 07 Not allocated 530 08 Not allocated 531 Not allocated 532 Not allocated (vi) Financial investments/disinvestments and prudential investments Transaction adjustments

600 Adjustments / Reversals / Refunds related to financial investments/disinvestments and prudential investments Financial investments/disinvestments (excluding local institutional investors) Investment by a non-resident 601 01 Investment in listed shares by a non-resident 601 02 Investment in non-listed shares by a non-resident

602 Investment into money market instruments by a non- resident 603 01 Investment into listed bonds by a non-resident (excluding loans) 603 02 Investment into non-listed bonds by a non-resident (excluding loans)

604 Not allocated Disinvestment by a resident corporate entity 605 01 Disinvestment of shares by resident - Agriculture, hunting, forestry and fishing 605 02 Disinvestment of shares by resident - Mining, quarrying and exploration 605 03 Disinvestment of shares by resident - Manufacturing 605 04 Disinvestment of shares by resident - Electricity, gas and water supply 605 05 Disinvestment of shares by resident - Construction 277 of 298 2/2022 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers J. 605 06 Disinvestment of shares by resident - Wholesale, retail, repairs, hotel and restaurants 605 07 Disinvestment of shares by resident - Transport and communication 605 08 Disinvestment of shares by resident - Financial services 605 09 Disinvestment of shares by resident - Community, social and personal services 605 10 Not allocated Inward listed investments 610 01 Inward listed securities equity individual buy back 610 02 Inward listed securities equity corporate buy back 610 03 Inward listed securities equity bank buy back 610 04 Inward listed securities equity institution buy back 611 01 Inward listed securities debt individual redemption 611 02 Inward listed securities debt corporate redemption 611 03 Inward listed securities debt bank redemption 611 04 Inward listed securities debt institution redemption 612 01 Inward listed securities derivatives individual proceeds 612 02 Inward listed securities derivatives corporate proceeds 612 03 Inward listed securities derivatives bank proceeds 612 04 Inward listed securities derivatives institution proceeds 613 01 Not allocated 613 02 Not allocated 613 03 Not allocated 613 04 Not allocated Prudential investments (institutional investors and banks) 615 01 Disinvestment by resident institutional investor – Asset Manager 615 02 Disinvestment by resident institutional investor - Collective Investment Scheme 615 03 Disinvestment by resident institutional investor - Retirement Fund 615 04 Disinvestment by resident institutional investor - Life Linked 615 05 Disinvestment by resident institutional investor - Life Non Linked

616 Bank prudential disinvestment 617 Not allocated 618 Not allocated (vii) Derivatives Transaction adjustments

700 Adjustments / Reversals / Refunds related to derivatives Derivatives (excluding inward listed) 701 01 Options – listed 701 02 Options – unlisted 702 01 Futures – listed 278 of 298 2/2022 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers J. 702 02 Futures – unlisted 703 01 Warrants – listed 703 02 Warrants – unlisted 704 01 Gold hedging – listed 704 02 Gold hedging – unlisted 705 01 Derivative not specified above – listed 705 02 Derivative not specified above – unlisted 706 Not allocated 707 Not allocated (viii) Loan and miscellaneous payments Transaction adjustments 800 Adjustments / Reversals / Refunds related to loan and miscellaneous payments Loans (capital portion) Loans granted to residents

801 Trade finance loan drawn down in South Africa

802 International Bond drawn down

803 Loan made to a resident by a non-resident shareholder

804 Loan made to a resident by a non-resident third party 805 Not allocated Loans repaid by residents temporarily abroad

810 Repayment by a resident temporarily abroad of a loan granted by a resident Loans repaid by non-residents

815 Repayment of an individual loan to a resident

816 Repayment of a study loan to a resident

817 Repayment of a shareholders loan to a resident

818 Repayment of a third party loan to a resident (excluding shareholders)

819 Repayment of a trade finance loan to a resident 820 Not allocated Miscellaneous payments 830 Details of payments not classified

831 Not allocated

832 Rand drafts/cheques drawn on vostro accounts (Only applicable if no description is available) 833 Credit/Debit card company settlement as well as money remitter settlements 834 Not allocated 835 Not allocated

836 Not allocated 279 of 298 2/2022 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers J. (G) Outward payments (i) General (a) Authorised Dealers must ensure the correct reporting of all cross- border foreign exchange transactions irrespective of the amounts and currencies involved. (b) Data pertaining to transactions must be submitted to the Financial Surveillance Department in the various formats outlined in the Business and Technical Specifications document within two business days from the value date of the transaction. (c) Rejections by the Financial Surveillance Department must be corrected and re-submitted in the agreed format within one business day from the date of the rejection. (ii) Integrated form (a) The integrated form is applicable to all transactions reported under the ‘BOPCUS’, ‘NON RESIDENT RAND’ and ‘BOPDIR’ modules. Since transactions reported under the ‘BOPCARD RESIDENT’ module are fully electronic, the card holder will be held responsible for transactions concluded by utilising either a debit or credit card. Transactions reported by Reporting Entities under the ‘NON REPORTABLE’, ‘INTERBANK’ and ‘BOPCARD NON RESIDENT’ modules do not require an integrated form. (b) Authorised Dealers must make use of an integrated form, in respect of all outward payments either in hard copy or electronic format, to obtain data required for the processing and reporting of all cross- border foreign exchange transactions to the Financial Surveillance Department. (c) When the client is physically present at the Authorised Dealer, the integrated form must be completed and signed by the client in respect of all outward payments. (d) When the client is not physically present to complete and sign the integrated form, the Authorised Dealer may complete and sign the integrated form, either physically or electronically, provided that the Authorised Dealer has been authorised or mandated to do so by means of a letter, a facsimile message, an email message or by a recorded telephonic message to act on the client’s behalf. The client’s communication must be retained by the Authorised Dealer for a period of five years for inspection purposes. (e) In cases where the client transacts with the Authorised Dealer via an electronic interface, the Authorised Dealer must ensure that the underlying agreements legally bind the client in terms of the 280 of 298 2/2022 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers J. correctness of the information provided via the electronic medium. (iii) Declaration (a) The following declaration must be included in the integrated form: “I, the undersigned……………………………………., hereby declare that: 1. I have read this document and know and understand the contents thereof; 2. the information furnished above is in all respects both true and correct; 3. the currency applied for will only be used for the specific purpose stated herein; 4. the documentation presented in support of this application is in all respects authentic; 5. I have been informed of the limit applicable to the above transaction and confirm that this limit will not be exceeded as a result of the conclusion of this transaction; and 6. I consent to this information being provided to the South African Revenue Service and/or the Financial Intelligence Centre.” 281 of 298 2/2022 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers J. (H) Balance of payments categories applicable to BOPCUS and BOPDIR – outward payments A balance-of-payment category consists of a category and in some cases a category and a sub-category is also applicable. (i) Merchandise Transaction adjustments

100 Adjustments / Reversals / Refunds applicable to merchandise Imports: Advance payments (not in terms of import undertaking) 101 01 Import advance payment (excluding capital goods, gold, platinum, crude oil, refined petroleum products, diamonds, steel, coal, iron ore and goods imported via the South African Post Office) 101 02 Import advance payment – capital goods 101 03 Import advance payment – gold 101 04 Import advance payment – platinum 101 05 Import advance payment – crude oil 101 06 Import advance payment – refined petroleum products 101 07 Import advance payment – diamonds 101 08 Import advance payment – steel 101 09 Import advance payment – coal 101 10 Import advance payment – iron ore 101 11 Import advance payment - goods imported via the South African Post Office Imports: Advance payments (in terms of import undertaking) 102 01 Import advance payment (excluding capital goods, gold, platinum, crude oil, refined petroleum products, diamonds, steel, coal and iron ore) 102 02 Import advance payment – capital goods 102 03 Import advance payment – gold 102 04 Import advance payment – platinum 102 05 Import advance payment - crude oil 102 06 Import advance payment – refined petroleum products 102 07 Import advance payment - diamonds 102 08 Import advance payment – steel 102 09 Import advance payment – coal 102 10 Import advance payment – iron ore 102 11 Import advance payment - goods imported via the South African Post Office Imports: (excluding advance payments and not in terms of import undertaking) 103 01 Import payment (excluding capital goods, gold, platinum, crude oil, refined petroleum products, diamonds, steel, coal, 282 of 298 2/2022 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers J. iron ore and goods imported via the South African Post Office) 103 02 Import payment – capital goods 103 03 Import payment – gold 103 04 Import payment – platinum 103 05 Import payment – crude oil 103 06 Import payment – refined petroleum products 103 07 Import payment – diamonds 103 08 Import payment – steel 103 09 Import payment – coal 103 10 Import payment – iron ore 103 11 Import payment - goods imported via the South African Post Office Imports: (excluding advance payments but in terms of import undertaking) 104 01 Import payment (excluding capital goods, gold, platinum, crude oil, refined petroleum products, diamonds, steel, coal, iron ore and goods imported via the South African Post Office) 104 02 Import payment – capital goods 104 03 Import payment - gold 104 04 Import payment - platinum 104 05 Import payment– crude oil 104 06 Import payment– refined petroleum products 104 07 Import payment - diamonds 104 08 Import payment– steel 104 09 Import payment– coal 104 10 Import payment– iron ore 104 11 Import payment - goods imported via the South African Post Office Imports: Other

105 Consumables acquired in port

106 Repayment of trade finance for imports

107 Import payments where the Customs value of the shipment is less than R500

108 Import payments where goods were declared as part of passenger baggage and no MRN is available 109 01 Payments for goods purchased from non-residents in cases where no physical import will take place, excluding gold, platinum, crude oil, refined petroleum products, diamonds, steel, coal and iron ore as well as merchanting transactions 109 02 Payments for gold purchased from non-residents in cases where no physical import will take place, excluding merchanting transactions 109 03 Payments for platinum purchased from non-residents in cases where no physical import will take place, excluding merchanting transactions 283 of 298 2/2022 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers J. 109 04 Payments for crude oil purchased from non-residents in cases where no physical import will take place, excluding merchanting transactions 109 05 Payments for refined petroleum products purchased from non-residents in cases where no physical import will take place, excluding merchanting transactions 109 06 Payments for diamonds purchased from non-residents in cases where no physical import will take place, excluding merchanting transactions 109 07 Payments for steel purchased from non-residents in cases where no physical import will take place, excluding merchanting transactions 109 08 Payments for coal purchased from non-residents in cases where no physical import will take place, excluding merchanting transactions 109 09 Payments for iron ore purchased from non-residents in cases where no physical import will take place, excluding merchanting transactions 109 10 Not allocated

110 Merchanting transaction

111 Not allocated

112 Not allocated (ii) Intellectual property and other services Transaction adjustments

200 Adjustments / Reversals / Refunds applicable to intellectual property and service related items Charges for the use of intellectual property

201 Rights obtained for licences to reproduce and/or distribute

202 Rights obtained for using patents and inventions (licensing)

203 Rights obtained for using patterns and designs (including industrial processes)

204 Rights obtained for using copyrights

205 Rights obtained for using franchises and trademarks Acquisition of intellectual property (excluding computer related and audiovisual)

210 Acquisition of patents and inventions

211 Acquisition of patterns and designs (including industrial processes)

212 Acquisition of copyrights

213 Acquisition of franchises and trademarks Research and development

220 Payments for research and development services

221 Funding for research and development 284 of 298 2/2022 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers J. Audiovisual and related items

225 Acquisition of original manuscripts, sound recordings and films

226 Payment relating to the production of motion pictures, radio and television programs and musical recordings Computer software and related items

230 The outright purchasing of ownership rights of software

231 Computer-related services including maintenance, repair and consultancy

232 Commercial purchases of customised software and related licences to use

233 Commercial purchases of non-customised software on physical media with periodic licence to use

234 Commercial purchases of non-customised software provided on physical media with right to perpetual (ongoing) use

235 Commercial purchases of non-customised software downloaded or electronically acquired with periodic licence

236 Commercial purchases of non-customised software downloaded or electronically acquired with single payment Technical related services 240 01 Fees for processing - processing done on materials (excluding gold, platinum, crude oil, refined petroleum products, diamonds, steel, coal and iron ore) 240 02 Fees for processing - processing done on gold 240 03 Fees for processing - processing done on platinum 240 04 Fees for processing - processing done on crude oil 240 05 Fees for processing - processing done on refined petroleum products 240 06 Fees for processing - processing done on diamonds 240 07 Fees for processing - processing done on steel 240 08 Fees for processing - processing done on coal 240 09 Fees for processing - processing done on iron ore

241 Repairs and maintenance on machinery and equipment

242 Architectural, engineering and other technical services

243 Agricultural, mining, waste treatment and depollution services Travel services for non-residents

250 Travel services for non-residents - business travel

251 Travel services for non-residents - holiday travel

252 Not allocated Travel services for residents

255 Travel services for residents - business travel

256 Travel services for residents - holiday travel 285 of 298 2/2022 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers J. Travel services in respect of third parties

260 Payment for travel services in respect of third parties - business travel

261 Payment for travel services in respect of third parties - holiday travel Telecommunication and information services

265 Payment for telecommunication services

266 Payment for information services including data, news related and news agency fees Transportation services 270 01 Payment for passenger services - road 270 02 Payment for passenger services - rail 270 03 Payment for passenger services - sea 270 04 Payment for passenger services – air 271 01 Payment for freight services – road 271 02 Payment for freight services – rail 271 03 Payment for freight services – sea 271 04 Payment for freight services – air 272 01 Payment for other transport services – road 272 02 Payment for other transport services – rail 272 03 Payment for other transport services – sea 272 04 Payment for other transport services – air 273 01 Payment for postal and courier services – road 273 02 Payment for postal and courier services – rail 273 03 Payment for postal and courier services – sea 273 04 Payment for postal and courier services – air Financial services obtained

275 Commission and fees

276 Financial service fees charged for advice provided Construction services

280 Payment for construction services Government services

281 Payment for government services

282 Diplomatic transfers Study related services

285 Tuition fees Other business services obtained

287 Payment for legal services

288 Payment for accounting services

289 Payment for management consulting services

290 Payment for public relation services

291 Payment for advertising and market research services

292 Payment for managerial services 286 of 298 2/2022 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers J.

293 Payment for medical and dental services

294 Payment for educational services

295 Operational leasing

296 Payment for cultural and recreational services

297 Payment for other business services not included elsewhere

298 Not allocated

299 Not allocated (iii) Transactions relating to income and yields on financial assets Transaction adjustments

300 Adjustments/Reversals/Refunds related to income and yields on financial assets Income payments

301 Dividends

302 Branch profits

303 Compensation paid by a resident to a resident employee temporarily abroad (excluding remittances)

304 Compensation paid by a resident to a non-resident employee (excluding remittances)

305 Compensation paid by a resident to a migrant worker employee (excluding remittances)

306 Compensation paid by a resident to a foreign national contract worker employee (excluding remittances)

307 Commission or brokerage

308 Rental 309 01 Not allocated 309 02 Not allocated 309 03 Not allocated 309 04 Interest paid to a non-resident in respect of shareholders loans 309 05 Interest paid to a non-resident in respect of third party loans 309 06 Interest paid to a non-resident in respect of trade finance loans 309 07 Interest paid to a non-resident in respect of a bond 309 08 Interest paid not in respect of loans 310 01 Not allocated 310 02 Not allocated 310 03 Not allocated 310 04 Not allocated 311 01 Not allocated 311 02 Not allocated 311 03 Not allocated 311 04 Not allocated 312 01 Fee in respect of inward listed securities derivatives individual 312 02 Fee in respect of inward listed securities derivatives corporate 312 03 Fee in respect of inward listed securities derivatives bank 287 of 298 2/2022 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers J. 312 04 Fee in respect of inward listed securities derivatives institution

313 Not allocated

314 Not allocated

315 Not allocated (iv) Transfers of a current nature Transaction adjustments

400 Adjustments / Reversals / Refunds related to transfers of a current nature Current payments

401 Gifts

402 Annual contributions

403 Contributions in respect of social security schemes

404 Contributions in respect of foreign charitable, religious and cultural (excluding research and development)

405 Other donations / aid to a foreign Government (excluding research and development)

406 Other donations / aid to a foreign private sector (excluding research and development)

407 Pensions

408 Annuities (pension related)

409 Inheritances

410 Alimony 411 01 Tax - Income tax 411 02 Tax - VAT refunds 411 03 Tax – Other

412 Insurance premiums (non life/short term)

413 Insurance claims (non life/short term)

414 Insurance premiums (life)

415 Insurance claims (life)

416 Migrant worker remittances (excluding compensation)

417 Foreign national contract worker remittances (excluding compensation)

418 Value Transfer Service (Authorised providers – for statistical purposes only)

419 Not allocated (v) Transfers of a capital nature Capital transfers and emigrants Transaction adjustments

500 Adjustments / Reversals / Refunds related to capital transfers and emigrants 288 of 298 2/2022 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers J. Capital transfers relating to government / corporate entities (excluding loans)

501 Donations by SA Government for fixed assets

502 Donations by corporate entities for fixed assets

503 Disinvestment of property by a non-resident corporate entity

504 Investment into property by a resident corporate entity Capital transfers by non-resident individuals 510 01 Disinvestment of property by a non-resident individual 510 02 Disinvestment by a non-resident individual - other Capital transfers by South African resident individuals Investment not related to the investment allowance 511 01 Investment by a resident individual not related to the investment allowance – Shares 511 02 Investment by a resident individual not related to the investment allowance – Bonds 511 03 Investment by a resident individual not related to the investment allowance - Money market instruments 511 04 Investment by a resident individual not related to the investment allowance – Deposits with a foreign bank 511 05 Investment by a resident individual not related to the investment allowance – Mutual funds / collective investment schemes 511 06 Investment by a resident individual not related to the investment allowance – Property 511 07 Investment by a resident individual not related to the investment allowance – Other 511 08 Not allocated Investment in terms of investment allowance 512 01 Foreign investment by a resident individual in respect of the investment allowance - Shares 512 02 Foreign investment by a resident individual in respect of the investment allowance – Bonds 512 03 Foreign investment by a resident individual in respect of the investment allowance – Money market instruments 512 04 Foreign investment by a resident individual in respect of the investment allowance – Deposits with a foreign bank 512 05 Foreign investment by a resident individual in respect of the investment allowance – Mutual funds / collective investment schemes 512 06 Foreign investment by a resident individual in respect of the investment allowance – Property 512 07 Foreign investment by a resident individual in respect of the investment allowance – Other 512 08 Not allocated 289 of 298 2/2022 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers J.

513 Investment by a resident individual originating from a local source into an account conducted in foreign currency held at an Authorised Dealer in South Africa Investment from a resident Foreign Currency account (Note: Categories 511/01 to 511/07 must be used) 514 01 Not allocated 514 02 Not allocated 514 03 Not allocated 514 04 Not allocated 514 05 Not allocated 514 06 Not allocated 514 07 Not allocated 514 08 Not allocated Re-transfer of capital repatriated (Note: Categories 511/01 to 511/07 must be used) 515 01 Not allocated 515 02 Not allocated 515 03 Not allocated 515 04 Not allocated 515 05 Not allocated 515 06 Not allocated 515 07 Not allocated 515 08 Not allocated

516 Not allocated

517 Not allocated Emigrants 530 01 Emigration foreign capital allowance – fixed property 530 02 Emigration foreign capital allowance – listed investments 530 03 Emigration foreign capital allowance – unlisted investments 530 04 Emigration foreign capital allowance – insurance policies 530 05 Emigration foreign capital allowance – cash 530 06 Emigration foreign capital allowance – debtors 530 07 Emigration foreign capital allowance – capital distribution from trusts 530 08 Emigration foreign capital allowance –other assets

531 Not allocated

532 Not allocated (vi) Financial investments/disinvestments and prudential investments Transaction adjustments

600 Adjustments / Reversals / Refunds related to financial investments/disinvestments and prudential investments 290 of 298 2/2022 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers J. Financial investments/disinvestments (excluding local institutional investors) Disinvestment by a non-resident 601 01 Listed shares - sale proceeds paid to a non-resident 601 02 Non-listed shares - sale proceeds paid to a non-resident

602 Disinvestment of money market instruments by a non-resident 603 01 Disinvestment of listed bonds by a non-resident (excluding loans) 603 02 Disinvestment of non-listed bonds by a non-resident (excluding loans)

604 Not allocated Investment by a resident corporate entity 605 01 Investment into shares by a resident entity - Agriculture, hunting, forestry and fishing 605 02 Investment into shares by a resident entity - Mining, quarrying and exploration 605 03 Investment into shares by a resident entity - Manufacturing 605 04 Investment into shares by a resident entity - Electricity, gas and water supply 605 05 Investment into shares by a resident entity - Construction 605 06 Investment into shares by a resident entity - Wholesale, retail, repairs, hotel and restaurants 605 07 Investment into shares by a resident entity - Transport and communication 605 08 Investment into shares by a resident entity - Financial services 605 09 Investment into shares by a resident entity - Community, social and personal services 605 10 Not allocated Inward listed investments 610 01 Inward listed securities equity individual 610 02 Inward listed securities equity corporate 610 03 Inward listed securities equity bank 610 04 Inward listed securities equity institution 611 01 Inward listed securities debt individual 611 02 Inward listed securities debt corporate 611 03 Inward listed securities debt bank 611 04 Inward listed securities debt institution 612 01 Inward listed securities derivatives individual 612 02 Inward listed securities derivatives corporate 612 03 Inward listed securities derivatives bank 612 04 Inward listed securities derivatives institution 613 01 Not allocated 613 02 Not allocated 613 03 Not allocated 613 04 Not allocated 291 of 298 2/2022 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers J. Prudential investments (institutional investors and banks) 615 01 Investment by resident institutional investor – Asset Manager 615 02 Investment by resident institutional investor – Collective Investment Scheme 615 03 Investment by resident institutional investor - Retirement Fund 615 04 Investment by resident institutional investor - Life Linked 615 05 Investment by resident institutional investor - Life Non Linked

616 Bank prudential investment

617 Not allocated

618 Not allocated (vii) Derivatives Transaction adjustments

700 Adjustments / Reversals / Refunds related to derivatives Derivatives (excluding inward listed) 701 01 Options – listed 701 02 Options – unlisted 702 01 Futures – listed 702 02 Futures – unlisted 703 01 Warrants – listed 703 02 Warrants – unlisted 704 01 Gold hedging – listed 704 02 Gold hedging – unlisted 705 01 Derivative not specified above – listed 705 02 Derivative not specified above – unlisted

706 Not allocated

707 Not allocated (viii) Loan and miscellaneous payments Transaction adjustments

800 Adjustments / Reversals / Refunds related to loan and miscellaneous payments Loans (capital portion) Loan repayments by residents

801 Repayment of trade finance drawn down in South Africa

802 Repayment of an international Bond drawn down

803 Repayment by a resident of a loan received from a non-resident shareholder

804 Repayment by a resident of a loan received from a non-resident third party

805 Not allocated 292 of 298 2/2022 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers J. Loans granted to residents temporarily abroad

810 Loan made by a resident to a resident temporarily abroad Loans granted to non-residents

815 Individual loan to a non-resident

816 Study loan to a non-resident

817 Shareholders loan to a non-resident

818 Third party loan to a non-resident (excluding shareholders)

819 Trade finance to a non-resident

820 Not allocated Miscellaneous payments

830 Details of payments not classified

831 Rand collections for the credit of vostro accounts

832 Not allocated

833 Credit/Debit card company settlement as well as money remitter settlements

834 Not allocated

835 Not allocated

836 Not allocated (I) Reconciliation module (i) Reporting entities must make use of a straight through processing system, in an electronic format, which must daily account for all reportable and non-reportable transactions, including interbank transactions, reconciling all such transactions at the reporting entities and also reconciling the transactions submitted to and confirmed by the South African Reserve Bank. (ii) In amplification of the above, the purpose is to ensure that there is reconciliation between the data on the general ledger/accounting system, the system used to submit data to the South African Reserve Bank as well as confirmation, from the South African Reserve Bank, that the data submitted was successfully received and stored. (iii) The reconciliation module must be able to perform the following functions: (a) compile the following daily reports from the general ledger/accounting system: (aa) reportable transactions; (bb) non-reportable transactions; and (cc) interbank transactions; 293 of 298 2/2022 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers J. (b) compile a daily report of all reportable transactions reported to the South African Reserve Bank from the system used to transmit data to the South African Reserve Bank; (c) electronically match the reportable transactions from the daily report referred to in (a) above with the actual transactions reported to the South African Reserve Bank referred to in (b) above; (d) compile a daily report of transactions not matched between the general ledger/accounting system of the reporting entity and the system used to transmit data to the South African Reserve Bank; and (e) the reconciliation module must be able to create the daily report referred to in (a), (b) and (d) above in Excel or text (semicolon delimited) format and must be forwarded to the South African Reserve Bank upon request. (iv) The data required, as per point (iii)(e) above, must contain the following information: (a) flow (IN or OUT); (b) transaction reference number; (c) branch code; (d) value date; (e) Rand amount; (f) foreign amount; and (g) foreign currency code. (v) In cases where the reporting entities change the status of transactions between reportable and non-reportable, the reconciliation module must be updated to ensure that this manual intervention does not distort the reconciliation process. (J) Systems governance (i) Inspection manual The minimum information that should be contained in an inspection manual includes: (a) a comprehensive flow diagram clearly depicting the flow of transactions through various systems (on-boarding, transactional, accounting and FinSurv Reporting System, including the 294 of 298 2/2022 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers J. Reconciliation Module) from capturing to submission of the transactions to the Financial Surveillance Department; (b) an up to date list of definitions, contact details of the dedicated person(s) responsible for the reporting to Financial Surveillance Department, error handling and the Reconciliation Module; and (c) suitable back-up procedures (i.e. how often, where, when, by whom, the duration of storage that should be minimum five years and recovery testing). Refer to the inspection manual specimen which is available from the website: www.resbank.co.za by following the links: Home>Financial Surveillance>Authorised Dealers>FinSurv Reporting System>FinSurv Reporting System documents>System Governance Templates or Home>Financial Surveillance>ADLAs>FinSurv Reporting System >FinSurv Reporting System documents>System Governance Templates. (ii) Pre and post certification managerial letter of comfort (a) Pre certification managerial letter of comfort must be submitted to the Financial Surveillance Department prior to the inspectors conducting a systems certification of the on-boarding, transactional, accounting and FinSurv Reporting System, including the Reconciliation Module. The pre certification managerial letter of comfort provides assurance that the reporting entity’s FinSurv Reporting System complies with the Financial Surveillance Department’s reporting requirements. In addition, risks and controls around the systems are properly mitigated to ensure that correct, accurate and comprehensive data is submitted as well as that the respective system is ready for deployment into the production environment. (b) Post certification managerial letter of comfort must be submitted to the Financial Surveillance Department after the on-boarding, transactional, accounting and FinSurv Reporting System, including the Reconciliation Module have been deployed in a live environment successfully for at least one month. (c) These pre and post managerial letters of comfort should be completed by the dedicated person responsible for regulatory compliance in consultation with various governance structures within the reporting entity. Refer to the pre and post certification managerial letter of comfort specimens that are available as outlined in (i)(c) above. (iii) Annual managerial letter of comfort (a) The reporting entity must submit an annual managerial letter of comfort indicating that it is comfortable with the governance structures and functionality of the FinSurv Reporting System. The 295 of 298 2/2022 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers J. letter must be submitted to the Financial Surveillance Department annually within three months after the financial year end of the reporting entity. (b) The dedicated person responsible for regulatory compliance must be accountable for completing the annual managerial letter of comfort and obtaining confirmation from assurance providers that the independent assurance review of the on-boarding, transactional, accounting and FinSurv Reporting System, including the Reconciliation Module will form part of its ongoing reviews. In this regard, the nature of the assurance procedure must be outlined. Refer to the annual managerial letter of comfort specimen that is available as outlined in (i)(c) above. ---oOo--- 296 of 298 2/2022 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers K. K. Returns and reports The following returns and reports must be submitted to the Financial Surveillance Department by Authorised Dealers as required in terms of the applicable sections of the Authorised Dealer Manual: (A) Return from insurance companies See section B.10(D)(ii)(d) of the Authorised Dealer Manual. (B) Returns of immigrants See section B.5(B)(i)(a) of the Authorised Dealer Manual. (C) Return of extensions granted to importers and exporters in terms of Exchange Control Regulations 11 and 12 See section F.2(C)(ii) of the Authorised Dealer Manual. (D) Authorisation to travel agents, hotels, restaurants, shops and other persons whose business is directly related to the tourist industry See section B.20(A)(iv) of the Authorised Dealer Manual. (E) Return of South African Reserve Bank notes repatriated from countries outside South Africa See section F.1(B)(iii) of the Authorised Dealer Manual. (F) Report of overdrawn non-resident clearing accounts of foreign banks in excess of R25 million See section E.(A)(ii)(c) of the Authorised Dealer Manual. (G) Macro-prudential foreign exposure limit return See section B.2(I) of the Authorised Dealer Manual. (H) Report of active currency management regarding in-between trades in respect of beneficial holdings trading See sections D.1(B)(i)(f) and (g) of the Authorised Dealer Manual. (I) Report of active currency management regarding in-between trades in respect of forward rates applicable to each contract concluded See sections D.1(B)(i)(f) and (g) of the Authorised Dealer Manual. 297 of 298 2/2022 <!-- page break --> Currency and Exchanges Manual for Authorised Dealers K. (J) Return of missing application sequence numbers See Section A.3(B)(xxii) of the Authorised Dealer Manual. (K) Return of related party agreement(s) See subsection B.3(C)(vii) of the Authorised Dealer Manual. ---oOo--- 298 of 298 13/2024 <!-- page break -->