Broad-Based Black Economic Empowerment Act, 2003 (Act No. 53 of 2003)Industry ChartersFinancial Services CharterSchedule 1 : Interpretation and Definitions1. Interpretation |
1.1 | Unless otherwise stated in this Code, any term or phrase assigned a specific meaning in Schedule 1 to the CoGP and used in this Code, has the meaning assigned in that schedule. |
1.2 | Affected institution means every financial institution that takes designated investments. |
1.3 | Agreed Standard Valuation means a valuation of an asset (valued in terms of the context in which this term appears) based on normal valuation methodologies (representing standard market practice) given the nature and stage of development of the asset being valued provided that: |
1.3.1 | The principles set out in the table hereunder will serve only as a guide to possible valuation methodologies that could be employed: |
Operation |
Valuation methodologies |
Banking |
Discounted cash flow |
Price to book |
|
Comparable Multiples |
|
Dividend Discount Model |
|
Capitalisation of earnings |
|
Net asset value |
|
Insurance |
Discounted cash flow |
Embedded value |
|
Price-to-embedded value |
|
Capitalisation of earnings |
|
Net asset value |
|
Brokerage firms |
Discounted cash flow |
Capitalisation of earnings |
|
Net asset value |
|
Asset managers and Collective Investment Schemes |
Discounted cash flow |
Capitalisation of earnings |
|
Percentage of funds under management |
|
Net asset value |
1.3.2 | Where the financial institution is listed on the JSE Limited, the market capitalisation of the financial institution concerned will serve as an overall benchmark for the individual valuations of the underlying assets and businesses of such financial institutions; |
1.3.3 | Cash flows to a beneficiary or shareholder will be valued on an after-tax basis. |