The South African Government Seeks To Enforce New BBE Rules At Banks And Funds
The South African Government Seeks To Enforce New BBE Rules At Banks And Funds. Deputy Finance minister David Masondo says that the South Africa’s financial and asset management sector will see a transformation push through the introduction of the draft Conduct of Financial Institutions Bill. “From the side of the state, what motivates us, what informs what we’re doing is a constitutional imperative for transformation. The equality clause in the constitution requires the state to undertake measures to transform South Africa in all facets of our society. We are also motivated by inclusive growth.” said Masondo in a Business Day webinar.
In earlier phases, BEE was generally focused on the procurement relationship between the state and providers of products of services to it, said Piet le Roux, Sakeliga chief executive. “Lately, in codes such as the legal sector code, BEE regulation jettisons the requirement of the state as a transacting party. The new approach is to regulate for BEE requirements regardless of state involvement, which poses serious implications for freedom to trade and freedom to procure professional services,” Le Roux said.
According to Business Tech, the shift in thinking around BEE is being driven by the Employment Equity Amendment Bill, which aims to accelerate the rate of transformation in South Africa. The bill, which is currently before parliament, will empower the minister of Labour to regulate the setting of sector-specific employment equity targets across most of South Africa’s major industries. Under the proposed legislation, the minister will first publish a notice in the gazette identifying national economic sectors which will be impacted.
Masondo said it will also be a requirement for financial institutions, such as banks, to have transformation plans that demonstrate their compliance with existing Black Economic Empowerment (BEE) legislation. The Financial Sector Conduct Authority (FSCA) will be given authority to enforce compliance. The FSCA will be empowered to enforce and regulate: Transformation; Operations; Culture; Product Design; Selling; Marketing and Internal Procedures. The FSCA has regulatory power over any financial institutions that are licensed in terms of a financial sector law, including banks, insurers, retirement funds and administrators, and market infrastructures.
