Financial Institutions and Markets (J)



1. Keep calm – In the words of Douglas Adams DON’T PANIC, these are uncertain times but at some point life will return to normal and people will need the service/product you provide.

2. People – Follow Public Health England recommended precautions to help prevent the spread of disease. For your organisation understand which people perform which critical task and what happens if they are out of the business for a period; share skills, information and training to increase resilience to absences.

Read more: Dealing with Distress: Top 10 Tips for Dealing with COVID-19 Financial Distress

Presidential Decree numbered 1965 was published on the Official Gazette dated 31.12.2019, which is related to the approval of the “Multilateral Competent Authority Agreement on Automatic Exchange of Financial Account Information” signed in Paris on 21.04.2017 (hereinafter referred to as “Agreement”). The Agreement will enter into force following the completion of the domestic legal processes pursuant to Article 7 of the Agreement.

Read more: Presidential Decree On the Approval of the Multilateral Competent Authority Agreement On the...

Author: Alex Hocking

On August 19, 2019, the American Institute of Certified Public Accountants (AICPA) issued valuation guidance for investment companies on how to value their portfolio company investments. The guide, titled “Valuation of Portfolio Company Investments of Venture Capital and Private Equity Funds and Other Investment Companies,” provides a nonauthoritative practical approach to valuations and is intended to harmonize the views of industry participants, auditors and valuation specialists.

Read more: 2 Topics Investment Companies Should Understand in AICPA’s New Valuation Guidance

During periods of underperformance, even the most experienced investors get tempted to switch funds in search of better returns. However, switching funds in response to short-term market conditions can jinx your investment success over the long term. Mthobisi Mthimkhulu explains.

After a flat few years, 2018 was particularly difficult for local investors in South Africa, with the FTSE/JSE All Share Index returning -8.5%. To add to the woe, price declines in other asset classes contributed to overall negative performance.

During these periods, like many other investors, you may get tempted to switch out of a fund that is doing poorly and buy into another fund that is doing relatively better. While this may appear to be a sensible way to protect your investment, or generate better returns, switching funds during poor performance inevitably destroys the value of your investment. This is because, in order to switch, you have to sell your units, which often locks in the underperformance of the fund you are switching out of. At the same time, the fund that you switch to may not be positioned to repeat its good performance of the past in the future. In effect, by switching you are often selling and buying at exactly the wrong time.

Switching could also cost you in fees and taxes. As switching involves the sale of an asset, the transaction could trigger capital gains tax. In addition, the fund you are switching to may charge initial fees.

Read the entire article.

Author: Marcy Kempf

A busy day for the Securities and Exchange Commission (SEC). The open meeting held on June 28, 2018, resulted in votes on several final rules and rule proposals that had been noted as priorities and publicly discussed in recent speeches from SEC staff. Among other things, two significant items — exchange-traded fund (ETF) exemptive orders and amendments to Rule 22e-4, better known as the Liquidity Rule — were both impacted by the day’s work.

Read more: Exchange-Traded Funds and Investment Company Liquidity Disclosures Addressed in Recent SEC Actions