FSC gazetted as per Section 9(5) of the act
Original publish date – Tue, 14 Dec 2010 09:23:04 +0000, Keith
Statement by Keith Levenstein, CEO of EconoBEE.
The dti minister, Dr Rob Davies has issued a new draft of the Financial Services Charter. The FSC is gazetted in terms of 9(5) of the B-BBEE Act. This means that the public has time to comment on the charter, and the minister can shortly – in as little as 3 to 4 months time issue the charter as a sector code. When it becomes a sector code it will apply to all in the financial services industry – banks, insurance companies, brokers, bond originators etc. Until it is gazetted as a sector code, those affected companies will use the code of good practice.
The FSC is being gazetted in two phases, and only phase 1 has now been gazetted.
A detailed scorecard will be published in phase 2.
One of the controversies around the gazetting of the codes was the ownership level, where targets have been set at both 15% (direct ownership) and 25% (indirect ownership). 25% is the target used by the codes of good practice.
The FSC creates the concept of a QSFI – as opposed to a QSE. A QSFI is a qualifying small financial institution with an annual turnover of less than R35 million or investments of less than R50 million. QSFI’s must choose 5 of the 7 elements.
The EME concept remains – turnover of less than R5 million.
“We welcome the issuing of the FSC. It removes confusion about the status of the sector codes. The phrasing shows that the FSC is now becoming more true to the codes – which was not the case with older drafts. The differences are based on specific differences in the financial sector, which is exactly the purpose of the sector codes. We hope that this will encourage true transformation, and at the same time eagerly await the reconciling of the PPPFA with the B-BBEE codes as this will remove the last major hurdle in implementing empowerment and B-BBEE properly.