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

Industry Charters

Financial Services  Charter

Code Series FS000: Framework for Measuring Broad-Based Black Economic Empowerment

Statement 000: General Principles and the Scorecard

8. The Financial Sector Scorecard
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8.1        The following table represents the Scorecard and contains the:

 

8.1 .1        Elements of the scorecard;

 

8.1 .2         Weightings; and

 

8.1 .3Financial Sector Code series reference that specifies the mechanisms for measurement and calculation of each of the elements of the scorecard (Code series 100 – 800).

 

Element

Available Points

% Weighting

Primary Reference

Ownership

14 + 3 bonus

14%

Code series FS100 to be read with Code series 100 of the Generic Code

Management Control

8 + 1 bonus

8%

Code series FS200 to be read with Code series 200 of the Generic Codes

Employment Equity

15 + 3 bonus

15%

Code series FS300 to be read with Code series 300 of the Generic Codes

Skills Development

10

10%

Code series FS400 to be read with Code series 400 of the Generic Codes

Preferential Procurement

16

16%

Code series FS500 to be read with Code series 500 of the Generic Codes

Empowerment Financing

15

15%

Code series FS600

Enterprise Development*

5

5%

Code series FS600 to be read with Code series 600 of the Generic Codes

Socio-Economic Development

3

3%

Code series FS700 to be read with Code series 700 of the Generic Codes

Access to Financial Services

14

14%

Code FS800

Total

100 + 7 bonus

100%

 

 

*For Measured Entities that are exempted from Empowerment Financing, the total number of points available shall be 95 + 7 bonus. This is as a result of having only 15 points available for Enterprise Development and zero available for Empowerment Financing, whereas enterprises that are not exempt from Empowerment Financing have 5 points available for Enterprise Development and 15 available for Empowerment Financing. For measured entities that are exempted from Empowerment Financing, the Enterprise Development Measurement Principles, Scorecard and Benefit Factor Matrix shall align completely with all the provisions of Code series 600 of the Generic Codes. Therefore, the Recognition level of these entities shall be based on the score obtained via the following formula:

 

A = (B/95) x 100

 

Where:

A =  the deemed score achieved (to be applied to the table under paragraph 8.2 below)

B =  the total number of points achieved (including Bonus Points)

 

The same principle shall apply to measured entities that are exempt from both Empowerment Financing and Access to Financial Services or to measured entities that are exempt from only Access to Financial Services.

 

8.2Based on the overall performance of a Measured Entity using the Scorecard it receives the following B-BBEE Status-:

 

B-BBEE Status

Qualification

B-BBEE Recognition Level

Level One Contributor

≥ 100% on the FSC Scorecard

135%

Level Two Contributor

≥ 85% but ˂ 100% on the FSC Scorecard

125%

Level Three Contributor

≥ 75% but ˂ 85% on the FSC Scorecard

110%

Level Four Contributor

≥ 65% but ˂ 75% on the FSC Scorecard

100%

Level Five Contributor

≥ 55% but ˂ 65% on the FSC Scorecard

80%

Level Six Conributor

≥ 45% but ˂ 55% on the FSC Scorecard

60%

Level Seven Contributor

≥ 40% but ˂ 45% on the FSC Scorecard

50%

Level Eight Contributor

≥ 30% but ˂ 40% on the FSC Scorecard

10%

Non Compliant Contributor

˂ 30% on the FSC Scorecard

0%

 

 

8.3If a financial institution is a member of a group, it will be measured and reported on as part of the South African group unless:

 

8.3.1The financial institution is a listed company; or

 

8.3.2The financial institution opts to be measured as a separate company.

 

8.3.3Notwithstanding paragraphs 8.3.1 and 8.3.2, should any division or business unit or subsidiary within a measured entity be deemed as a significant division or business unit or subsidiary it shall, upon request of the Financial Sector Council be required to produce and submit its own scorecard to the Council for information purposes. The scorecard need not be independently verified; however, the head of that division or business unit or subsidiary must attest to the accuracy of the scorecard submitted.

 

8.3.3.1The division or business unit or subsidiary referred to in paragraph 8.3.3 above may utilise its Group B-BBEE report for official use or it can opt to utilise its own scorecard (as per paragraph 8.3.3 above) should that scorecard be verified.

 

8.3.3.2A significant division, business unit or subsidiary is defined as:
•Any subsidiary, division or business unit forming part of a Consolidated Group Scorecard that conducts its primary business activities in a sector other than the financial sector; or
•Any subsidiary, division or business unit forming part of a Consolidated Group Scorecard that contributes more than  50% of the measured entity's revenue.

 

8.4Each financial institution will report annually to the Financial Sector Council on its progress in implementing the provisions of this Financial Sector Code.