Medicines and Related Substances Act, 1965
R 385
Broad-Based Black Economic Empowerment Act, 2003 (Act No. 53 of 2003)Industry ChartersFinancial Services CharterCode Series FS100: Measurement of the Ownership Element of Broad-Based Black Economic EmpowermentStatement 100: The General Principles for Measuring OwnershipAnnexe 100(B): Rules on Certain Types of Enterprises |
1. | Rules for Broad-Based Ownership Schemes |
1.1 | The following rules apply to Broad-Based Ownership Schemes: |
1.1.1 | The management fees of the scheme must not exceed 15%; |
1.1.2 | The constitution of the scheme must record the rules governing any portion of economic interest received and reserved for future distribution or application; |
1.1.3 | At least 85% of the value of benefits allocated by the scheme must accrue to Black People; |
1.1.4 | 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; |
1.1.5 | At least 50% of the fiduciaries of the scheme must be Black People and at least 25% must be Black Women; |
1.1.6 | The chairperson of the scheme must be independent; and |
1.1.7 | On the winding-up or termination of the scheme, all accumulated Economic Interest must be transferred to beneficiaries or an entity with similar objectives. |
2. | Rules for Employee Share Ownership Schemes |
2.1 | The following rules apply to Employee Share Ownership Schemes (ESOP): |
2.1.1 | The scheme constitution must define the participants and the proportion of their claim to receive distributions; |
2.1.2 | A written record of the name of the participants or the use of a defined class of natural person satisfies the requirement for identification; |
2.1.3 | 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 |
2.1.4 | The fiduciaries of the scheme must have no discretion on the above-mentioned terms; |
2.2 | The participants must take part in: |
2.2.1 | Appointing at least 50% of the fiduciaries of the scheme; |
2.2.2 | Managing the scheme at a level similar to the management role of shareholders in a company having shareholding; |
2.2.3 | The 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; and |
2.2.4 | All accumulated Economic Interest of the scheme is payable to the participants at the earlier of a date or event specified in the scheme constitution or on the termination or winding-up of the scheme; and |
2.2.5 | The scheme fiduciaries must present the financial reports of the scheme to participants yearly at an annual general meeting of the scheme. |
3. | Rules for Trusts |
3.1 | The qualification criteria for the recognition of Trusts are as follows: |
3.1.1 | The trust deed must define the beneficiaries and the proportion of their entitlement to receive distributions; |
3.1.2 | A written record of the names of the beneficiaries or the use of a defined class of natural person satisfies the requirement for identification; |
3.1.3 | A written record of fixed percentages of entitlement or the use of a formula for calculating entitlement satisfies the need for defining proportion of benefit; and |
3.1.4 | The trustees (including trustees of a family trust that will qualify provided that the Trust deed stipulates that the Beneficiaries must be Black South Africans and that at least 85% of the proceeds of the Trust accrue to the beneficiaries) must have no discretion on the above mentioned terms, and on winding-up or termination of the trust, all accumulated Economic Interest must be transferred to the beneficiaries or to an entity representing the interest of the participants or class of beneficiaries. |
4. | Additional Criteria Applicable to Trusts: |
4.1 | For a Measured Entity to obtain the maximum points on its Ownership scorecard from shareholding by a Trust, the Measured Entity must be in possession of a certificate issued by a competent person to the effect: |
4.1.1 | That the Trust was created for a legitimate commercial reason, which must be fully disclosed; and |
4.1.2 | That the terms of the Trust do not directly or indirectly seek to circumvent the provisions of the Codes and the Act. |
5. | Additional Criteria Applicable to Broad-Based Ownership Schemes and Employee Ownership Schemes: |
5.1 | For a Measured Entity to obtain the maximum points on its ownership scorecard, the following additional requirements must be met by a Broad-Based Scheme or Employee Share Ownership Scheme: |
5.1.1 | A track-record of operating as a Broad-Based Ownership Scheme or Employee Share Ownership Scheme, or in the absence of such a track-record demonstrable evidence of full operational capacity to operate as a Broad-Based Ownership Scheme or Employee Share Ownership Scheme |
5.1.2 | Operational capacity must be evidenced by suitably qualified and experienced staff in sufficient number, experienced professional advisors, operating premises and all other necessary requirements for operating a business. |