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Innovative law firm opens up South African UCITS market with novel fund registration

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Innovative law firm opens up South African UCITS market with novel fund registration

Utilising novel registration process allows UCITS fund managers to register funds in South Africa without changing their derivatives policy

Zeidler Legal Services, a technology-driven law firm with a focus on advising the asset management sector, has successfully registered an Irish UCITS fund in South Africa for a US fund manager in a ground-breaking process that has the potential to increase UCITS investment from the country and make it a far more attractive destination for investment fund managers.

South Africa has strict regulatory restrictions on leverage and the use of derivatives in an investment fund. Registering a UCITS fund as a Retail Investor Hedge Fund means that the fund in question has more flexibility and removes the need to alter its prospectus.

Zeidler is one of only a handful of firms to have used this relatively recent procedure for such a registration. Doing so puts it at the forefront of cross-border UCITS registrations into the South African market.

Arne Zeidler, Managing Director and Founder of Zeidler Legal Services said: “As a firm, we are focused on providing innovative solutions for our clients, including helping them expand into new markets.”

Historically, the South African market has been less attractive for UCITS funds because the regulatory requirements are more restrictive than the European UCITS regime. Under the Collective Investment Schemes Control Act (CISCA), South African retail investment funds can only use derivatives for efficient portfolio management and the use of leverage is prohibited.

In contrast, UCITS offer wide-ranging investment powers, including in derivatives, and there is no limit to the amount of leverage they can utilise. This has meant most UCITS are, as they stand, unsuitable for registration in South Africa.

Zeidler continues: “Fund managers have therefore been reluctant to register UCITS in South Africa. Even those funds which currently comply with these tighter prudential regulations may not wish to register there because this closes off future options if they might need to use derivatives for investment purposes further down the line. On top of that, rewriting the prospectus is inconvenient and expensive.

“By utilising this relatively new route – which was only launched in 2015 – we have enabled our client to register an umbrella UCITS in a potentially lucrative new market. We believe that the increased flexibility offered by this option will mean that South Africa becomes a more attractive market for UCITS managers globally and will increase investment opportunities in the region, so will be beneficial not just for the wider funds industry but also for South Africa.

“One of our strengths is that we specialise in registering funds all over the globe – the client has one point of contact, rather than having to negotiate with multiple local law firms. This fund registration reinforces our ability to handle innovative cross-border work that opens major new markets for our clients.”

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Britain’s Heathrow sinks to $2.8 billion loss during pandemic

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Britain's Heathrow sinks to $2.8 billion loss during pandemic 1

LONDON (Reuters) – Britain’s Heathrow Airport plunged to a 2 billion pound ($2.8 billion) annual loss after passenger numbers collapsed to levels last seen in the 1970s during the pandemic.

Heathrow called on the government to agree a common international travel standard to allow passengers to start flying again in the summer and to provide business tax breaks for airports to help them ride out the crisis.

The airport, west of London, is hopeful that travel markets will reopen from mid-May after a government announcement on easing lockdown on Monday.

Still Britain’s biggest airport, Heathrow last year lost its title as the busiest in Europe to Paris as its flight schedules contracted more than its rival’s.

The airport said on Wednesday that during 2020 passenger numbers shrunk 73% to 22 million people, with half of those people having travelled during January and February before COVID-19 shut down global travel.

The airport sunk to a 2 billion loss before tax on revenues which were down 62% to 1.18 billion pounds, but Heathrow said it had 3.9 billion pounds of liquidity and that could keep it going until 2023.

The airport is owned by Spain’s Ferrovial, the Qatar Investment Authority and China Investment Corp, among others.

($1 = 0.7044 pounds)

(Reporting by Sarah Young; Editing by Kate Holton and James Davey)

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Strong exports, construction boost German economy in fourth quarter

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Strong exports, construction boost German economy in fourth quarter 2

BERLIN (Reuters) – Bullish exports and solid construction activity helped the German economy to grow by a stronger-than-expected 0.3% in the final quarter of last year, the Federal Statistics Office said on Wednesday, revising an earlier estimate.

The office, which previously had reported a 0.1% expansion on the quarter from October to December, said it also revised upward its 2020 full-year GDP figure for Europe’s largest economy to -4.9% from -5.0%.

Adjusted for calendar effects, the economy last year shrank by 5.3%, which was a much smaller contraction than many other European countries recorded, mainly due to a strong fiscal response of Chancellor Angela Merkel’s government to the COVID-19 pandemic.

The debt-financed fiscal splurge created an overall state budget deficit of 139.6 billion euros or 4.2% of gross domestic product in 2020, the office said. This was the first deficit since 2011 and the second-highest since German reunification.

(Reporting by Michael Nienaber; Editing by Maria Sheahan)

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UK’s Sunak could extend stamp duty holiday until June-end – The Times

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UK's Sunak could extend stamp duty holiday until June-end - The Times 3

(Reuters) – British finance minister Rishi Sunak is preparing to extend the stamp duty holiday by three months until the end of June in an attempt to boost activity in the housing market as the country emerges from lockdown, The Times reported on Wednesday.

The extension to the policy, which covers sales of properties worth up to 500,000 pounds ($708,100), could cost the government 1 billion pounds, the report https://bit.ly/3sglJoS added.

Britain raised the threshold of property tax to 500,000 pounds last July from 125,000 pounds, exempting nine of 10 people buying a main home from stamp duty. The temporary cuts are set to expire in March 2021.

Sunak will use his annual budget on March 3 to move the policy to the end of June, bringing it in line with the easing of lockdown restrictions, the newspaper said.

He will also announce plans to raise corporation tax while Treasury officials are considering a 25% tax hike.

Sunak said on Tuesday that he would set out more details of job support measures at his budget next week, after official figures showed unemployment had risen to its highest since early 2016.

($1 = 0.7061 pounds)

(Reporting by Aishwarya Nair in Bengaluru, Editing by Sherry Jacob-Phillips)

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