Trade and Industry Minister Rob Davies has gazetted the Amended Financial Service Sector Code (FSC) after it received endorsement by the cabinet last week, his department said on Monday.
The FSC commits all participants to actively promote a transformed and competitive financial sector that reflects the demographics of South Africa, which contributes to the establishment of an equitable society by providing accessible financial services to black people and by directing investment into targeted sectors of the economy.
In a statement on Monday, Davies said that the Amended FSC was now a legally binding document on all entities and organisations operating in the financial sector.
Davies said that the financial sector in South Africa manages over R8 trillion assets, contributing 21.6 percent to the gross domestic product of the economy annually, and therefore transformation of the sector was vital for the country.
"Transformation of this sector is key because it is the life blood for all other sectors of the economy. The process to develop a charter emanated from the 2002 [National Economic Development and Labour Council] Nedlac Summit where stakeholders committed to a sector charter," Davies said.
The Amended FSC has unique features and deviations that intent to address transformation peculiarities that exist in the sector."
Davies approved and gazetted the FSC in terms of Section 9 (1) of the Broad Based Black Economic Empowerment (B-BBEE) Act.
It has also been agreed among stakeholders that post the gazette of the sector code there will need to be a review process taking into account the report of the recently held parliamentary hearings on transformation of the financial sector and other considerations.
The FSC has two unique elements called Empowerment Financing and Access to Financial Services as a catalyst for empowerment.
"The aim for empowerment financing is to ensure support for black owned entities (including black Industrialists), black agriculture funding necessary to assist with the land reform process, transformational infrastructure financing (emphasis here is on funding of previously neglected areas such as townships and rural areas) and low-cost housing funding," Davies said.
"In this regard no less than R122 billion shall be spend by the sector under empowerment financing to investment (black SMME finance, affordable housing, and infrastructure and black industrialisation) and risk capital finance and BEE transaction financing."