FINANCIAL SECTOR TRANSFORMATION COUNCIL CHANGE IN SUBMISSION OF REPORTS
What is this?
The FSTC recently sent out important reporting changes and information. See the original communication here. To be clear, the FSTC is not to be confused with the FSCA. Although this does not fall in the realm of FAIS compliance, we thought it is a good idea to perhaps just summarise the requirements and application thereof.
Usually the BEE components of a business is handled internally/with HR or accountants in consultation with Verification Agents (BEE Compliance Officers) if need be.
The FSTC is mandated to obtain BBBEE statistical data from entities operating in the financial services sphere on their progress relating to BBBEE. They send out a request once a year for statistical data so they can compile their annual report on the progress of Financial Institutions with the Financial Sector BBBEE codes.
Who does this apply to?
The sectors/companies asked to report are:
Banking;
Long-term insurance;
Short-term insurance;
Re-insurance;
Retirement fund administration;
The management of collective investment scheme assets;
Financial services intermediation and brokerage (FSP's);
Public entities involved in the financial sector e.g. DBSA, Land Bank;
Asset management, consulting and administration;
Private equity, venture capitalist and impact investors;
Management of investments on behalf of the public, including, but not limited to, private equity, members of any exchange licensed to trade equities or financial instruments in South Africa and entities listed as part of the financial index of a licensed exchange;
Underwriting management agents; and
Industry Trade Associations operating in the sector.
This does not apply to:
Natural or juristic persons who do not have trading operations in the Republic of South Africa;
The trading operations of natural or juristic persons outside the Republic of South Africa; and Managers of investments on behalf of the public who are not subject to regulation by the FSCA, such as lawyers who hold money in intermediate trusts etc.
How do I report if I need/want to?
Exempted Micro Enterprises must submit an affidavit confirming their annual turnover and level of black ownership to the FSTC.
Financial Institutions that meet the requirements of a Qualified Small Financial Institution (QSFI), that has an annual turnover of more than R10 million but less than R50 million, and are more than 50% black owned (where there is an existing equity deal in place) or at least 51% black owned (for all deals concluded after the commencement date of the amended Code) or 100% black owned, should submit an affidavit confirming their annual turnover and BBBEE status to the FSTC.
Financial institutions with an annual turnover of R50 million or more must have their BBBEE status verified by a Verification Agent. This agent must submit a verification certificate together with the full verification report to the FSTC within 30 days of issuing the verification certificate.
All of the entities above should complete and submit a CEO Survey.
Changes in Submission of Reports:
It is extremely important to note that the FSTC changed the method for companies to submit reports. The FSTC will NO LONGER accept reports via the reporting email.
The reports and supporting documents should be submitted as a folder through Drop Box. All report should now be submitted electronically to the Drop Box link: https://www.dropbox.com/request/YYZggWgIZT3BwJrh4AP5 with the folder named: FSTC 2020/21 Reporting– (name of entity).
FIs were requested to submit the full final verification reports, to the FSTC no later than the end of the business Friday, 12 August 2022. All reports are to be submitted electronically to the Drop Box link.
***Avoid editing and saving online into one drive. ***
Should an entity encounter difficulty in providing the above-requested information they should contact the FSTC at reporting@fstc.org.za, or call (011)838 6696 or get in touch with their respective Trade Associations for more clarity
Any Penalties?
All entities that do not submit the required reports to the Council will automatically be discounted by one BEE level in the next rating period.
The Council also reserves the right to name institutions that have not submitted reports on a list, however we have not seen them doing so yet.
