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Cape Town - South Africa must guard against monopoly capital and neither black monopoly capital nor white monopoly capital is a good thing, according to ANC MP Joanmarie Fubbs.
"We in Parliament are opposed to all monopoly capital, but the reality is that currently there is white monopoly capital," Fubbs, who is also the chair of the Parliamentary Portfolio Committee on Trade and Industry, said at a transformation summit hosted by the Association of Black Securities and Investment Professionals (ABSIP) in Cape Town on Thursday.
Stockbroking is a major instrument to ensure change, because finance is the life blood of any economy, and ABSIP is playing a critical role in providing a platform for such change, according to Fubbs.
"Our great problem is that enforceable legislation is difficult to implement, but it is the only way to transform our economy. The financial charter requires a review - especially the provisions for the minister to issue BBBEE codes," said Fubbs.
"In the past some people have told me that one can have charters for all sectors, but not for the financial sector because it is 'complicated'. Some say the JSE is one of the most untransformed institutions. Others say one must remember a lot of investment on the JSE is foreign and [from] institutions."
In her view, transformation of the asset management sector is especially slow.
READ: Transformation in financial sector under the spotlight
For Vusi Mkhondo, CEO of Lefika Securities, it should not only be about complying with the letter of the law when it comes to transformation. It should rather be about what he calls "the spirit of transformation".
"We must try to marry the legalities and the spirit of transformation," he told delegates. "We must establish what will make a black stockbroker sustainable. Remember we are trying to redress the past."
For him it is very important to distinguish between empowerment and actual black ownership.
"Some institutions will, for instance, write a cheque for students (from a township) to study, but I am talking about transformation through ownership," he said.
"I want to propose that we move away from empowerment and rather focus on black ownership of 51% or more. We propose that asset owners, when they allocate assets to asset managers, try to identify players who are trying to drive transformation. Trustees must also keep this in mind."
For him the argument of the fiduciary responsibilities involved should not prevent finding solutions to transformation challenges.
"Adopt meaningful transformation targets for allocations. I have heard the figure of 5% being named, but that is not OK to say you will give 5% to black business. That is not the spirit of transformation as you are then implying that 95% will stay with white business," said Mkhondo.
"Big firms should share skills with small black stockbrokers and even international stockbrokers can do that. They say 'teach a man to fish', but after 23 years of independence we now also want to talk about the 'fishing rights'."
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