The Johannesburg Stock Exchange (JSE) has announced that it will be listing and trading Actively Managed Exchange Traded Funds (AMETFs) for the first time from 14 October.
This follows the approval by the Financial Conduct Authority (FSCA) of amendments to the JSE’s listing requirements to allow investment managers to use an actively managed investment strategy to generate returns as opposed to using a passive investment strategy.
The JSE says the changes will result in collective investment scheme (CIS) management companies listing ETFs linked to offshore assets on South African securities exchanges. It will also allow unlimited investment in offshore assets subject to the fund’s offshore portfolio allowance limits.
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“The forthcoming introduction of the AMETF in South Africa follows extensive consultation between the JSE, FSCA and market participants, taking into account the evolution of the global ETF market and the desire of the local industry to adapt to global best practice,” the JSE added in a statement released on Tuesday.
It said it has attracted several ETF listings this year and currently has 93 listings with a total market capitalization of more than 114 billion rand.
It also noted that actively managed ETFs recorded strong growth globally, increasing assets under management by 7.1% year-to-date to $474 billion in 2022 from $442 billion at the end of 2021.
JSE Director of Capital Markets Walden Reddy says the new listing amendments are part of the JSE’s ongoing efforts to align its operations with international standards and to improve the efficiency, fairness and transparency of the stock exchange for both issuers and investors.
“Adding AMETF to our already extensive product offering will allow the JSE to attract more issuers to place new instruments. In addition, AMETFs will enable South African investors to further diversify their portfolios in a cost-effective manner,” she adds.
The JSE says the new amendments are the most significant recent regulatory changes to the local ETF industry since the South African Reserve Bank issued its Foreign Exchange Control Circular in 2017.
Nondumiso Lehutso is a Moneyweb intern.