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

Industry Charters

Financial Services  Charter

Code Series FS100: Measurement of the Ownership Element of Broad-Based Black Economic Empowerment

Statement 103: The Recognition of Equity Equivalents

8. Empowerment Financing and Access to Financial Services Equity Equivalent Programmes

 

8.1 Measured Entities must register every programme, other than paragraph 8 programmes, that constitutes Empowerment Financing and Access to Financial Services Equity Equivalent Programmes with the Financial Sector Council at the commencement of the programme.

 

8.1.1 The registration will include details of the B-BBEE status of the recipients where relevant, a description of the transaction/s in the context of Code series FS600 and/or FS700 and/or FS800 and the Rand value of the Equity Equivalent and term over which it is claimed.

 

8.1.2 The transaction cannot form part of the score of the entity under Code series FS600 and/or FS700 and/or FS800.

 

8.1.3 Contributions to Equity Equivalent programmes that are the same in nature to contributions contemplated under Code series FS600 and/or FS700 and/or FS800 and have already been claimed under Code Series FS600 and/or FS700 and/or FS800 may not be claimed under paragraph 2 of Code FS100, Statement 100. For avoidance of doubt no double counting of the same contribution will be allowed under Ownership and any other element.

 

8.2 Measurement principles:

 

8.2.1 Equity Equivalent contributions will be recognised as follows:
– The target for Equity Equivalents shall be the Rand Value of 5% (for local entities) or 25% (for foreign multinationals/branches of foreign multinationals) of the measured enterprise measured using a standard valuation as at 31 December 2010
– For local entities, the origination amounts shall be recognised under paragraphs 2.1 to 2.5 of the Ownership Scorecard
– For the purpose of paragraph 2.1 of the Ownership scorecard equity equivalent contributions shall be deemed to hold voting rights
– For the purpose of paragraph 2.2 of the Ownership scorecard 50% of the voting rights recognised under paragraph 2.1 shall be deemed to be held by Black Women
– For the purpose of paragraph 2.3 of the Ownership scorecard equity equivalent contributions shall be deemed to hold Economic interest
– For the purpose of paragraph 2.4 of the Ownership scorecard, 50% of the economic interest recognised under paragraph 2.3 shall be deemed to be held by Black Women
– For the purpose of paragraph 2.5 of the Ownership scorecard, 50% of the economic interest recognised under paragraph 2.3 shall be deemed to be held by Black Designated Groups.

 

8.2.2 Only the balance sheet exposure as at measurement date shall be recognised under paragraph 2.6 of the Ownership scorecard (Table 2a) for local entities.