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

Amended Codes of Good Practice (2013)

Amended Code Series 100: Measurement of the Ownership Element of Broad-Based Black Economic Empowerment

Annexe 100 (B)

1. Rules for Broad-Based Ownership Schemes
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1.Rules for Broad-Based Ownership Schemes

 

1.1The following rules apply to Broad-Based Ownership Schemes:

 

1.1.1the management fees of the scheme must not exceed 15%;

 

1.1.2the constitution of the scheme must record the rules governing any portion of Economic Interest received and reserved for future distribution or application;

 

1.1.3the constitution of the scheme must define the Participants and the proportion of their claim to receive distributions;

 

1.1.4a written record of the name of the Participants or the use of a defined class of natural person satisfies the requirement for identification;

 

1.1.5a written record of fixed percentages of claim or the use of a formula for calculating claims satisfies the need for defining proportion of benefit; and

 

1.1.6the fiduciaries of the scheme must have no discretion on the above mentioned terms;

 

1.1.7at least 85% of the value of benefits allocated by the scheme must accrue to Black people;

 

1.1.8at least 50% of the fiduciaries of the scheme must be independent persons having no employment with or direct or indirect beneficial interest in the scheme;

 

1.1.9at least 50% of the fiduciaries of the scheme must be Black people and at least 25% must be Black women;

 

1.1.10the chairperson of the scheme must be independent;

 

1.1.11the constitution, or other relevant statutory documents, of the scheme must be available, on request, to any Participant in an official language in which that person is familiar;

 

1.1.12the scheme fiduciaries must present the financial reports of the scheme to Participants yearly at an annual general meeting of the scheme; and

 

1.1.13on winding-up or termination of the scheme, all accumulated Economic Interest must be transferred to the beneficiaries or an entity with similar objectives.