Fin sector wants charter talks

Johannesburg - The future of the empowerment charter for the financial services sector is in the hands of the ministers of Finance and Trade & Industry.

The charter broke down some time ago because the Department of Trade & Industry did not accept it as a sector charter that could be integrated into the departmental empowerment codes.

The financial services sector has now requested meetings with the ministers of Finance and Trade & Industry.

The National Treasury has confirmed receiving a request for discussions on the issue with the Minister of Finance, but declined to elaborate.

The Department of Trade & Industry also confirmed receiving such a request.

Dr Rob Davies, Minister of Trade & Industry, states he is aware of a number of issues concerning the charter that need attention, Jana Marais reports.

The minister admitted a wish to speak to the financial services sector in this connection, but also declined to say more.

Both ministers are believed to be in favour of the empowerment charter for the financial services sector.

The sector charter had already been published in 2002, long before the Department of Trade & Industry drew up empowerment codes.

The department and the sector however got bogged down over requirements for ownership within the sector as well as the department's conditions. The departmental codes require 15% direct and 10% indirect empowerment ownership.

The sector charter finds 10% direct and 15% indirect ownership acceptable. Empowerment transactions within the sector have been done on the basis of the charter's requirements.

The most recent meetings in which the charter was discussed were boycotted by representatives of Cosatu and the South African Communist Party (SACP), and no compromise could be reached.

Representatives of financial institutions in many cases have agreed to conform to the departmental codes but after many months have been unable to agree on the requirements for black ownership.

Financial services institutions have frequently said they are not opposed to 25% empowerment ownership, but they would prefer a direct empowerment stake of 10% and an indirect one of 15%.

First National Bank chief executive Dr Michael Jordaan, the bank's representative in the charter council, says the charter has been a critical catalyst in the transformation to which banks committed themselves five years ago.

"The transformation of the financial services sector can still be achieved by means of voluntary targets and in terms of the codes," he reckons.

"At this stage banks require certainty from Minister Davies."

The financial sector wants to discuss the empowerment charter with ministers.

- Sake24.com

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