Until such a time that the minister issues the charter as a sector code; which could happen in as little as 3-4 months, the public has time to comment on the charter.  Once it has been declared a sector code, this FSC will apply to all institutions operating within the financial services industry - banks, insurance companies, brokers, bond originators etc.  Until it is gazetted as a sector code, affected companies will continue to use the Codes of Good Practice.

The FSC is being gazetted in two phases, of which phase 1 has only now been gazetted.  Companies operating in the financial services field can look forward to a detailed scorecard published in phase 2.

Keith Levenstein, CEO of EconoBEE, leading BEE consultancy welcomes the issuing of the FSC; which he believes removes confusion around the status of the sector codes.  "The altered 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," says Levenstein. 

 

An additional positive development in the latest FSC draft is the creation of 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. Another development is that QSFI's will be required to choose 5 of the 7 elements on which to be scored.  The EME concept retains its definition as a company with an annual turnover of less than R5 million.

 

Levenstein added to his assessment of the latest draft; "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). The 25% target is used by the Codes of Good Practice."

"We hope that that the amendments to the charter will encourage true transformation, and at the same time, EconoBEE eagerly awaits the reconciling of the PPPFA with the B-BBEE codes as this will remove the last major hurdle in properly implementing empowerment and B-BBEE," concludes Levenstein. 

 

Ends. 

 

Issued By:	The Lime Envelope
On Behalf Of:	EconoBEE
For Media Information:	Angelique Meyer
Telephone:	011 704 7770
Email:	angelique@thelime.co.za