HOW DO MY INVESTMENT ALLOWANCES GET USED UP WHEN ARBING?

A guide on how the OVEX Arbitrage service uses up your allowances

HOW DO MY INVESTMENT ALLOWANCES GET USED UP WHEN ARBING?

Every Arbitrage trade involves sending your invested ZAR abroad to purchase TUSD (TrueUSD) from OVEX UK’s offshore facility. To do so, the ZAR invested must first be converted to USD. To convert the ZAR to USD OVEX opens up an offshore Bank Account in your name and on your behalf. This process of sending ZAR abroad to then purchase US Dollars means you are using up your capital control allowances set by the SARB with each and every trade.

Let’s make use of an example: Say you were to invest ZAR100K in the OVEX Arbitrage Service. In this case, if you were to use up your full ZAR11million allowance (that is the ZAR1million SDA + the ZAR10million FIA) you could make 110 trades only before your full allowance is expunged.

If your arbitrage profits were re-invested it would take less than 110 trades to use up your full investment allowance. Arbitrage profits, however, are not considered a permissible Source of Funds (SoF) by the SARB for the purpose of arbitrage – so these cannot be re-invested. Instead, they are paid out into your OVEX wallet after every trade.

After the 110 trades have been executed, on your behalf by OVEX’s expert traders - your allowances would have been used up for the calendar year. You can only make offshore investments, like the OVEX Arbitrage Service, in the following calendar year.


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