Brexit

Yes, for existing clients nothing has changed. We will continue to look after your financial needs now and in the future. However, we aren’t taking on any new clients who are resident in the EU/EEA.

Yes, you can still send euros from, and electronically remit euros to, your account(s) at Nedbank Private Wealth.

We have received assurances from our Visa processor that you can continue to use your Visa Platinum debit cards globally as normal.

Yes, it is business as usual for the execution of trade instructions.

Yes, where MiFID rules apply, these continue to apply after Brexit.

It is our job as portfolio managers to consider the ramifications of Brexit and then implement a strategy that is able to mitigate the most likely risks while maximising opportunity.

It is important to emphasise that our managed investment strategies do not have a regional bias to the UK. Our strategies are positioned according to our views on the global investment landscape. UK assets are only one relatively small part of that landscape in normal times, and currently the combination of heightened risks and the lack of clear opportunities means that we have substantially reduced our exposures to the UK.

From a currency perspective, we have minimal sterling exposure in non-sterling strategies. While sterling could appreciate in value over the long term, at present and over the medium term the upside to the pound is limited given there is currently no real single / positive scenario that would realistically take us back to previous “average” levels (i.e. GBP/USD1.5 any time soon).

We are also maintaining our usual long-term focus, which means that at time like this we can tune out the highest-frequency drama, with only the most significant developments having even the potential to affect investment positioning. All the while we are monitoring markets for any long term opportunities that might present themselves in the short term.

There are three key messages to keep in mind:

• Nedbank Private Wealth managed investment portfolios are about as anti-sterling as they can reasonably be.
• Brexit may cause some minor short term fluctuations in portfolio valuations; however long term returns will not be determined by Brexit.
• Having a professionally managed portfolio means that when things change, as they constantly do, you can be sure your portfolio will be actively positioned to aim to take advantage of the opportunities that change presents.

• There is no change to the Depositor’s Compensation Schemes in the UK, Jersey and Isle of Man.
• Our correspondent banks were prepared for Brexit, and have confirmed there was no disruption to normal services.
• Our investment custodian, Citi, and the stockbrokers that we utilise for trading, were prepared for Brexit and have confirmed no disruption occurred.
• Our treasury team increased our liquidity so we would be able to cope with higher levels of currency exchange activity.
• UK and Crown Dependencies financial services regulations are the same standard as EU regulations, so customer safeguards remain in place across the industry.

There is unlikely to be any impact. Firstly, Nedbank Private Wealth is well capitalised and retains levels of capital well above regulatory minimum requirements. It has a low risk balance sheet with no debt servicing obligations and high levels of liquidity.

Nedbank Private Wealth’s approach to liquidity management is very conservative, benefitting from a strong portfolio of high quality negotiable instruments. Cash placements with third party banks are generally for periods no greater than seven days and Nedbank Private Wealth Liquidity is very strong.

Secondly, we apply a policy of very limited lending (sometimes referred to as deposit upstreaming) to our parent and also restrict the size of our money market exposures with other major financial institutions. All such exposures are only made with banks that are considered systemically important either globally or within their own geographic regions, and consequently are subject to much higher supervisory expectations and are required to have full resolution planning in place (“resolution” is the restructuring of a bank by a resolution authority through the use of resolution tools in order to safeguard public interests, including the continuity of the bank’s critical functions, financial stability and minimal costs to taxpayers). This ensures diversity of risk on behalf of our clients and individual exposures therefore remain extremely modest given the scale of our balance sheet and reserves.

We have guarantees from our custodian that all assets held will continue to be secure and accessible after Brexit.

Although closely connected to the UK, the Crown Dependency of Jersey the Channel Islands is self-governing, is not subject to UK law and has never been part of the EU. Jersey’s financial services industry is not impacted by the UK’s membership of the EU. Certain aspects of EU legislation are adopted by the Channel Islands in order to comply with bilateral agreements in place between Jersey and member states of the EU, but this position has not changed. As such, Brexit has had no direct effect on the financial services industry in Jersey.

Although closely connected to the UK, the Crown Dependency of the Isle of Man is self-governing and is not included within the scope of the UK’s membership of the EU. No change in the relationship between the Isle of Man and the UK is anticipated as a result of its withdrawal from the EU. As such, Brexit has had no direct, first order impact on the financial services industry in the Isle of Man.

Passporting is the process whereby British-based financial institutions, such as banks, insurance providers, or asset management firms, can sell their products and services into the rest of the EU without the need to obtain a license, get regulatory approval, or set up local subsidiaries to do so.

Nedbank Private Wealth does not utilise passporting. Any restrictions around passporting, will have no impact on Nedbank Private Wealth or the services we provide.

Are there any changes to how Nedbank Private Wealth uses clients’ personal data (for clients who live in EU)?

There is no change to data protection in relation to our clients. Information on what we do with personal data is contained in our Privacy Notice, which is available on our website here.

Political background

The UK left the EU on 31 January 2020 and entered a transition period with the EU, which ended on 31 December 2020. During the transition period, EU law continued to apply in the UK.

What is the Withdrawal Agreement?

The Withdrawal Agreement set out the terms of the UK’s exit from the EU, including provisions for a transition period until 31 December 2020.

What is the Political Declaration?

The Political Declaration set out the framework for the future relationship between the UK and the EU. It covered trade and economic cooperation with the EU, alongside agreements on security and other areas. The UK and EU used this framework as the starting point for negotiations on the future UK-EU relationship.