FINANCIAL SERVICES BOARD

Rigel Park 446 Rigel Avenue South Erasmusrand Pretoria South Africa

PO Box 35655 Menlo Park Pretoria South Africa 0102

Tel (012) 428-8000 Fax (012) 347 0221 e-mail info@fsb.co.za

Enquiries; J van Rooyen D. Dialling No.: (012) 428 8080

E-mail: jeffv@fsb.co.za

 

To: Jeremy Michaels

Committee Secretary: Ad Hoc Commit on Finance

Attention: Ms Barbara Hogan

Dear Ms Hogan

AMENDMENTS TO THE PUBLIC INVESTMENT CORPORATION BILL [B6-2004]

Thank you for sending the FSB the Committee’s proposed amendments for comment.

After consulting with the Public Investment Corporation and my colleagues, including Franso van Zyl, we wish to inform the Committee as follows:

Proposed amendments to specific clauses in track format sent by the Committee on 23 June 2004 and reworded clause 9 sent on 24 June 2004.

The FSB supports the proposed amendments. As far as the wording of clause 9 sent on 24 June 2004 (presumably to replace clause 9 in track format sent on 23 June) is concerned, the deletion of the words "as contemplated in section 7 and 8 of the FAIS Act" at the end of sub-clause (1) is proposed. The reference to sections 7 and 8 is superfluous because of the automatic inclusion thereof in the earlier words "in terms of the FAIS Act".

Proposed amendments in terms of letter of 25 March 2004 from the FSB to PIC

The FSB is also satisfied that, as a result of the above, all the issues raised in the letter of 25 March 2004 to the PIC in respect f an earlier version of the Bill have been addressed satisfactorily.

Proposed amendments withdrawn by the FSB on 22 June 2004-08-03

  1. The amendments to the definition "deposit" improves in our view the readability and understanding of the current definition. In the current definition, the amount of money referred to in "section 11(1)" is excluded from the above definition but when one reads clause 11(1) such amount is again deemed to be a deposit which is, with respect, confusing. The proposed amendment of the definition together with the consequential amendments to clause 11 provides greater clarity and is therefore supported.
  2. It is not so clear what is meant by a "depositor" referred to in clause 10 of the Bill. As there is no reference in the FAIS Act to the word "depositor" an alignment with the word "client" as defined in the FAIS Act is considered necessary. The insertion of the definition of "depositor is therefore supported.
  3. The addition to the definition of "FAIS Act" of the words "and includes any measure or decision refer to in the definition of 'this Act' in section l (1) of that Act", is considered over cautious and therefore not supported.
  4. The technical amendment to the definition of "the Registrar by the deletion of the word "the" for purposes of the alphabetical order of the list of definitions, is supported.
  5. The proposed amendments to clauses 6 and 9 are not supported as they have been satisfactorily accommodated in the Committee's own amendments to the relevant clauses.
  6.  

  1. The inclusion of the words "Subject to relevant codes of conduct published under the FAIS Act" at the beginning of clause 10 is not supported as the PIC will in any case be fully subject to the FAIS Act.
  2. The inclusion of the words "and guidelines which must be determined by the board" is not supported as the distinction between investment policy and investment strategy is accepted.
  3. Should the proposed amendments to the definition of "deposit" be accepted a consequential amendment to sub-clause (2) will entail the deletion of the words "and other money referred to in section 11".

We trust the above comments will be of help to the Committee

Yours sincerely

JEFF VAN ROOYEN

EXECUTIVE OFFICER