Background and Motivation

Regulation 28 of the Pension Funds Act was amended effective on 1 July 2011, with a transitional period provided until 31 December 2011. It imposes limits on the investments of retirement’s fund and these limits are intended to protect retirement funds against making imprudent investments. Regulation 28 places limits on investments held by Retirement Funds (RA, Pension and Provident) by limiting the exposure to asset classes as well as issuer exposure, in order to prevent over-exposure of policyholders assets to investment risks. Stakeholders are required to adhere to these limits and to demonstrate compliance by reporting on these exposures quarterly.

This regulation imposes more onerous provisions in that there are now additional requirements:

  • Compliance at member level.
  • A 'look through' principle to investments.
  • New limits on asset class exposure and exposure to the individual issuer of financial instruments.
  • Reporting to the Regulator of any breaches on a quarterly basis.
It is important to note that these changes affected both Liberty Corporate and Retail business.

  • Summary of Requirements
      1. Infomet was required to establish a solution for sourcing and provisioning of 'On Balance Sheet' asset data for Liberty's four Life Licences that will enable specific reporting with the appropriate frequency, consistency and flexibility. The solution must specifically cater for Offshore Asset Data and provide 'Look Through' information where appropriate and available.
      2. We also needed to establish the ability to perform 'Overlays' between the above-mentioned Asset Data to Liability Information available in the existing Infomet Finance & Risk Information Delivery Solution (FRID) at Liberty.
      3. It was imperative to our client that the information included in FRID as a base for the above, is reconcilable between Source System, FRID and the SAP General Ledger for each relevant Source System.
  • Deliverables to Date
    • In delivering against the requirements described above, the following has been achieved:

      1. Sourcing investment and investment related data (including information) at Investment Portfolio, Counterparty and Financial Instrument levels from a wide variety of sources, including -
        • Transactional sources (x6)
        • Descriptive market and instrument structure sources (x7)
      2. Using Rule Sets to ensure proper standardisations and classifications of instruments and counterparties without losing traceability to the original source information.
      3. Successfully utilising the Infomet GBM's Stakeholder and Item Variant Structures to identify, manage and even eliminate duplications.
      4. Providing users with a comprehensive 'look-through' capability for collective investment instruments as required by regulators.
      5. Presenting Investment Management Information to management and regulators in a variety of ways, including -
        • Investment Register
        • Investment Library
        • Credit Risk Information
        • Regulatory Reports (including Solvency and PFA Regulation 28)

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