Davies said the draft Financial Services Sector Code introduced two new elements which make the total number of compliance elements to nine as opposed to the seven proposed by the B-BBEE Codes of Good Practice.

"The two elements are Empowerment Financing and Access to Financial Services. These elements are intended to broaden the transformation process by making financial services accessible to the previously unbanked and undeserved," he said

The set target for ownership is 25% with Direct Portion being 15% and the Indirect Portion 10%.

"Local entities have an option of accomplishing an outright 15% direct ownership or through a combination of 10% direct and a maximum of 5% of the portion by way of Equity Equivalents.

"The 5% should be used for enterprise development and other developmental initiatives. Foreign Banks may accomplish the entire 25% ownership target by way of Equity Equivalents," added the Minister.

Minister Davies said that in addition under the ownership element, the charter deviates from the Codes of Good Practice with regard to the principle of "dilution due to regulatory requirements" as well as "dilution as a result of black participant(s) electing to sell their shares and realise the net value attributable to those shares" as stipulated in paragraphs 3.4.7 and 3.5.2.1 of the Key Principles for the Ownership element.

The other key highlight of the Charter is that Qualifying Small Enterprises in the Financial Service sector must select any five (5) elements of the eight elements and not four, which is what is stipulated in the Generic Codes.

Comments on Phase II of the Draft Financial Services Sector Code can be sent to bee-fsc@thedti.gov.za