The Reserve Bank and National Treasury have published draft proposals for a Synthetic Financial Centre, a new set of rules that would let licensed South African firms manage international assets from South Africa. South Africans hold an estimated R5 trillion in offshore investments, and some estimates put it at R10 trillion, with most of the management fees going to foreign firms.

South Africans paid R21.7 billion to overseas providers of financial and insurance services in 2025, according to the Reserve Bank. And the public has 30 days to comment, and implementation is expected before the end of 2026.

Unlike Mauritius, Kigali or Casablanca, a synthetic financial centre is not a place. It is created by regulation, so approved firms could manage assets for clients and investments located elsewhere without opening offices abroad, which exchange controls have often forced them to do.

The idea came from Operation Phumelela, an industry task force working with Treasury and the Reserve Bank, chaired by JSE chief executive Valdene Reddy. "We developed the SFC because South Africa should be competing for this business, not watching it move elsewhere," Reddy said.

To take part, a firm would need the relevant FSCA or Prudential Authority licences, registration with the Reserve Bank's Financial Surveillance Department and approval for the centre itself. Its centre business would have to be ring-fenced from the rest of its activities, with quarterly reports to the Reserve Bank.

Private individuals could invest directly through the centre using their foreign capital and single discretionary allowance. The proposals keep the 45% cap on how much retirement funds and other institutions can invest offshore, and investments routed through the centre still count towards that limit.

The key change is for the managers: a qualifying firm could manage a client's offshore portfolio without those assets using up its own foreign exposure limit, and foreign investors could invest through the centre without a South African limit applying to them.

A later phase would go further, letting companies raise capital locally in foreign currencies, allowing firms to set up offshore-focused funds here, and enabling shares and bonds listed in currencies other than the rand.

Moneyweb's Ciaran Ryan set out the proposals and the fees at stake. Stuart Theobald, executive chair of research firm Krutham, said South Africa has the expertise to serve international markets but has lacked the rules to do it, after two years of work between industry and regulators. Nedbank chair Daniel Mminele said the challenge is turning the country's sophisticated financial system into investment, exports and jobs. Wiehann Olivier of Forvis Mazars said the real prize is not only attracting foreign capital, but the management work, skills and fees that come with it.

South Africa has a deep financial sector but has spent decades sending fees and talent offshore because of how its exchange controls work. The appeal of this plan is that it changes the rules rather than building a new financial district, which makes it cheaper and faster than the approach taken by competitors like Mauritius.

It also fits a pattern this month of Treasury moving from blanket restrictions to monitored permission, the same shift behind the rewrite of the crypto rules. For investors, more choice and possibly lower fees could follow, though nothing guarantees firms will pass savings on.

For the JSE, which is working to find more companies to list, non-rand listings could be the bigger long-term change. The 30-day comment window matters, because the crypto rules showed that public comments really can change a draft. Asset managers, fintechs and wealth platforms that want to compete for international business should read the proposals now.

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