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Cape Town - Increased transparency regarding black economic empowerment (BEE) of all stakeholders in the stockbroking industry in South Africa is required, according to Sibongiseni Mbatha, president of the Association of Black Securities and Investment Professionals (ABSIP).
He regards dealing houses in SA as "old boys school tie gatekeepers, who allocate to firms based on past connections".
Less than 2% of the value traded on the JSE is by black stockbrokers and supporting legislation for transformation in this sector either does not exist or it is not effective, according to black stockbrokers.
"We must look back and reflect on our history - 60 years since the Freedom Charter," Mbatha said at the opening of ABSIP's stockbroking summit in Cape Town on Thursday.
"ABSIP is a united transformational force. Revolutionary greetings!"
In Mbata's view companies in the stockbroking industry in particular sometimes merely make hasty attempts to have their racial balance in place before legislation comes into effect.
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"Transformation is a word that comes up regularly and to me it is also about the role black people can and must play in upholding our Constitution," said Mbatha.
"The financial sector should be a vibrant sector that upholds demographics and direct investments into targeted areas. More needs to be done to bring more black people into the industry."
For him it is about raising issues collectively and making policy changes if necessary.
"Corporates should allocate a set time to spend with black stockbrokers and there should be more black stockbrokers. There should also be more women and more black analysts on the selling side," said Mbatha.
In 2015 the allocation to black firms was 1.5% and now it has only grown to 1.8%.
"Obviously there are barriers and we also need more black people on the research side. On top of that, the number of black brokerage firms has declined over the last 10 years. The challenge is that there is no legislative support and broad-based black economic empowerment (BBBEE) remains voluntary," said Mbatha.
"The playing field must be equal. Black brokers are generally given low-value trades to execute. They also battle to retain talent for their firms."
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