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  • Writer's picturePieter Dennis Janse Van Rensburg

Ensuring B-BBEE Compliance: What Financial Institutions Need to Know before the deadline (28 June 2024)

The Financial Sector Transformation Council (FSTC) has set a deadline of 28 June 2024 for all financial institutions, from individual brokers to large corporations, to submit Broad-Based Black Economic Empowerment (B-BBEE) compliance reports. This directive, outlined in Reporting Notice 1 of 2024, underscores the importance of adhering to B-BBEE requirements as mandated by recent FSTC notices.


Required Information and Documentation

Financial institutions must provide the following documentation to ensure compliance with the FSTC's B-BBEE reporting requirements:


B-BBEE Verification Certificate: This certificate confirms the institution's B-BBEE status and level, as verified by a recognised verification agency.


B-BBEE Verification Report: This report details the findings and methodology used by the verification agency to assess the institution's B-BBEE compliance.


Steps to Ensure Compliance

To meet the FSTC's requirements and avoid potential sanctions, financial institutions should consider the following steps:


  1. Engage with B-BBEE Legal Advisors: Seek guidance from reputable B-BBEE legal advisors or consultants, such as BEE Empowered Cape Winelands (Pty) Ltd. to ensure accurate interpretation and implementation of B-BBEE regulations.

2.     Letter of Intent from B-BBEE Specialist: A statement from a B-BBEE specialist or advisor affirming the institution's commitment to B-BBEE compliance and detailing any steps taken to improve B-BBEE standing.


  1. Submit Required Documentation Timely: Ensure that all necessary documentation is submitted to the FSTC by the stipulated deadline of 28 June 2024.


  1. Maintain Communication: Stay informed about any updates or clarifications regarding B-BBEE compliance requirements issued by the FSTC or relevant authorities.


Consequences of Non-Compliance

While the FSTC accepts all B-BBEE levels for reporting in 2024 and does not impose fines based on B-BBEE rating alone, failure to submit required reports or refusal to disclose B-BBEE status may result in the following actions:


  • One-Level Downward Discount at FSTC: Entities may face a discount of one level in subsequent reporting periods.


  • Public Naming: The FSTC reserves the right to publicly disclose entities that fail to comply with reporting obligations.


Financial institutions are therefore encouraged to proactively engage with B-BBEE compliance measures to uphold regulatory standards and avoid potential repercussions.

In conclusion, while the exact legislative requirements for B-BBEE compliance levels remain pending, financial institutions should prioritise timely and accurate reporting to the FSTC. By doing so, they not only demonstrate commitment to economic empowerment but also mitigate risks associated with non-compliance.


For additional support and guidance throughout the compliance process, financial institutions can rely on resources provided by B-BBEE specialists and legal advisors.


Pieter Janse van Rensburg - B-BBEE Specialist

BAHons PolSci (NWU-Potchefstroom) MDP (Unisa)

C: 060 505 4254 

 

Lizette Frank - B-BBEE Specialist

(BA) LLB (Stellenbosch) B-BBEE Management (Unisa)

C: 082 923 8296




 

 

 

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