B-BBEE Verification Professional Regulator
On the 21st of July 2017, the Department of Trade and Industry issued draft statement 005 for public comment. The commentary period is usually for a period of 60 days as prescribed in the B-BBEE Act.
The statement focuses more on the regulatory aspect of B-BBEE, it identifies who is regarded as the key players that will facilitate the accreditation processes of verification agencies (now referred to as rating agencies). In September 2016, The Independent Regulatory Board of Auditors(IRBA) was officially withdrawn from accrediting auditors to issue B-BBEE certificates and subsequently all IRBA auditors were given up to December 2016 to issue B-BBEE certificates provided the engagement letter was signed prior to the end of September 2016.
The minister of DTI Dr Rob Davis has now appointed the B-BBEE unit of their department as the official B-BBEE verification Professional Regulator. The new regulator is expected to work with the currently existing accreditation body SANAS, all accreditation issued by SANAS will also need to be approved by the new regulator.
There are new requirements that rating agencies will need to satisfy to retain their accreditation status or if they have the intention of acquiring a new one; below would be some of the key changes to take note of:
- All agencies are required to be superior contributors to B-BBEE by achieving a minimum of a level 3 B-BBEE status and are also required to have a minimum of 51% Black shareholding utilizing the flow through principle in the next 12 months otherwise the status will be lost automatically.
- Regardless of the rating agencies size (EME, QSE, Generic or start-up), all rating agencies need to be verified against the 5 elements (this typically means affidavits are not applicable to them)
- The previous MDP course is now going to be replaced by a new programme called the B-BBBEE Capacity Development Programme. All professional signatories and verification professionals would be required to take this course.
- Rating agencies are required to upload the B-BBEE certificate to the report portal after 5 days of issuing of the certificate and are also required to upload the underlying data used for the scorecard in the same portal.
- The verification professional regulator and SANAS have the power to investigate on engagement files to ensure that they have adhered to verification methodology outlined in the verification manual. Furthermore, the two bodies can investigate complaints and determine conditions for approval or withdrawal
These are some of the most significant changes in the redirection of the verification industry and subsequently this will have a knock off effect on how companies will be measured. It is therefore important that all comments are submitted before the 21st of September 2017 to ensure that they are considered in the final draft of Statement 005.
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