Broad-Based Black Economic Empowerment Act, 2003 (Act No. 53 of 2003)

Industry Charters

Financial Services Charter

Code Series FS100: Measurement of the Ownership Element of Broad-Based Black Economic Empowerment

Statement 100: The General Principles for Measuring Ownership

3. Key measurement principles

3.4 Exclusion of specified entities when determining ownership

Purchase

3.4.1

When determining ownership in a measured entity, ownership held directly by organs of state or public entities must be excluded. This exemption only applies to organs of the state of the Republic of South Africa and to Public Entities of the Republic of South Africa.

3.4.2

In calculating their ownership score, Measured Enterprises must apply the Exclusion Principle to any portion of their Ownership held by Organs of State or Public Entities. This exemption only applies to organs of the state of the Republic of South Africa and to Public Entities of the Republic of South Africa.

3.4.3

Despite paragraphs 3.4.1 and 3.4.2, the Minister of Trade and Industry may, by notice in the Gazette, designate certain Public Entities as B-BBEE Facilitators. In calculating their Ownership score, Measured Enterprises must treat B-BBEE Facilitators as having rights of Ownership held:

3.4.3.1

100% by Black People:

3.4.3.2

40% by Black Women:

3.4.3.3

10% by Black Designated Groups;

3.4.3.4

Without any acquisition debts; and

3.4.3.5

Without any third-party rights.

3.4.4

When determining ownership in a Measured Entity, rights of ownership of Mandated Investments may be excluded. The maximum percentage of the ownership of any Measured Entity that may be so excluded is 40%. Mandated Investments are those investments as defined in Schedule 1 of the CoGP as per Gazette No. 29617.

3.4.5

Entities that elect not to exclude Mandated Investments when entitled to do so may either treat all of that ownership as non-black or obtain a competent person's report estimating the extent of black rights of ownership measurable in the Measured Entity and originating from that Mandated Investment.

3.4.6

A Measured Entity cannot selectively include or exclude Mandated Investments and an election to exclude one Mandated Investment is an election to exclude all Mandated Investments and vice versa.

3.4.7

Dilution due to regulatory requirements

Any dilution in the actual percentage of Black Ownership in a Measured Entity that occurs due to the Measured Entity having to increase its capital base as a direct result of regulatory requirements (new or existing) will for the purposes of this Code not result in a dilution of the percentage Black Ownership claimed under the Scorecard contained under paragraph 2, Table 2a.

A Measured Entity may exclude ownership arising in future as a direct result of any new regulatory requirements to increase the capital base of the Measured Entity.

For avoidance of doubt this principle will not apply should the institution be required to raise additional capital due to it having written bad business.