Finance: Transformation summit scheduled for April

The financial sector summit mooted following last year’s parliamentary hearings on financial sector transformation will take place in April, according to Finance Minister Malusi Gigaba, reports Pam Saxby for Legalbrief Policy Watch. Announcing this in his 2018 Budget speech – and noting that ‘the allocation of capital greatly influences patterns of ownership and production’ – the Minister referred to transformation across the financial services sector as ‘critical’. Against that backdrop, a media statement issued yesterday by the office of ANC Chief Whip Jackson Mthembu urged participants in the summit to arrive at ‘clear decisions’ informed by a report on the hearings adopted in November by the National Assembly. As Legalbrief Today has already reported, recommendations in the report included a restructured Financial Sector Council – perceived to be largely responsible for ‘inadequate’ progress in transforming the industries concerned.

Prepared by the National Assembly’s Standing Committee on Finance and Trade and Industry Committee, the report calls for: ‘sanctions for the subjective failings of individuals’; and for the Council and Broad-Based Black Economic Empowerment Commission to be ‘more rigorously’ held to account. ‘Major punitive fines’ are proposed for failing to achieve charter targets – with charter compliance prescribed as a licensing precondition. Other recommendations range from ‘proportional’ market entry requirements and more ‘appropriate’ minimum standards (with the aim of facilitating the growth of informal sector entities such as stokvels into larger, formal industry players), to a regulatory framework for money remittance service providers that are ‘not necessarily banks’ (to allow them access to the ‘payment system’).