National Treasury is developing new legislation that will “seek to enhance the transformation imperatives of the South African financial services sector”, says finance minister Tito Mboweni.
Answering in a recent written parliamentary Q&A, Mboweni said that a new version of the Conduct of Financial Institutions (COFI) bill contains provisions that, if enacted, will require financial institutions to develop transformation plans and commitments around broad-based black economic empowerment (BBBEE).
“Treasury is aware that there are also more structural forms of exclusion due to the history of our country, forms of inequality and access to financial services,” he said. “For such reasons, National Treasury has adopted a multi-pronged approach to transformation that seeks to enhance market conduct, market development and financial inclusion.”
Mboweni said that Treasury also recently published a draft policy document on financial inclusion for public comment, which focuses on general ‘economic inclusiveness’ for South Africa.
“The Financial Sector Code commits all participants to actively promote a transformed, vibrant and globally competitive financial sector that reflects the demographics of South Africa, and which contributes to the establishment of an equitable society by providing accessible financial services to poor and marginalized people and by directing investment into targeted sectors of the economy,” Mboweni said.
“Working together with the Financial Sector Transformation Council and its other members, National Treasury will continue working on the strengthening and implementation of the Financial Sector Code so as to enhance the transformation of the financial sector.
Stronger BEE laws needed
Employment and labour minister Thulas Nxesi says that government will need to introduce new regulations to speed up the rate of transformation at businesses in South Africa.
Speaking at the launch of the Commission for Employment Equity (CEE) annual report in June, Nxesi said it will take at least 50 years to see real transformation in the workplaces if the current pace of employment equity implementation in the top echelons is allowed to persist.
“The CEE report is a wake-up call to government that self-regulation by employers to achieve the objectives of EE legislation has not worked.
“We now need a more aggressive strategy including a review of legislation. The Employment Equity Bill currently in parliament is a catalyst to expedite transformation in the workplace.”
Currently making its way through parliament, the bill will provide the minister with the power, in consultation with the sector stakeholders and on the advice of the Commission for Employment Equity to:
- Regulate employment equity sector through specific EE numerical targets for designated groups (i.e., black people, women and persons with disabilities);
- Reduce the regulatory burden on small employers, i.e., those employing between 0-49 employees;
- Regulate criteria for assessment of compliance to complement the promulgation of Section 53 of the EE Act in order to be able to issue Employment Equity Certificate of Compliance as a precondition for designated employers to access State Contracts and do business with any organ of the state or public entity.