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

Amended Codes of Good Practice (2017)

Amended Code Series CSC100: Measurement of the Ownership Element of Broad-Based Black Economic Empowerment in the Construction Sector

Statement CSC100: The General Principles for Measuring Ownership

Annexe CSC100 (B)

1. Rules for Broad-Based Ownership Schemes
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1.1The following rules apply to Broad-Based Ownership Schemes:

 

1.1.1The management fees of the scheme must not exceed 15% of total Economic Interest received by the scheme in any year;

 

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

 

1.1.4 The fiduciaries of the scheme must have no discretion on the above mentioned terms of the constitution;

 

1.1.5 At least 85% of the value of benefits allocated by the scheme must accrue to Black People;

 

1.1.6 At 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;

 

1.1.7 At least 50% of the fiduciaries of the scheme must be Black People and at least 25% must be Black women;

 

1.1.8 The chairperson of the scheme must be independent;

 

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

 

1.1.10 The scheme fiduciaries must make available the annual financial reports of the scheme to Participants upon request.

 

1.1.11 On winding-up or termination of the scheme, all accumulated Economic Interest must be transferred to the beneficiaries or an entity with similar objectives that complies with the rules for Broad-Based Ownership Schemes.

 

1.11.12 The fiduciaries of the scheme must complete an annual declaration that the scheme was created, managed and operated in accordance with its stated constitution and that the scheme does not seek to circumvent the intention of the the Act and the Construction Sector Codes.