FSTC's 2025 Reporting Notice (another BEE bluff)

The Financial Sector Transformation Council (FSTC) has issued yet another opportunistic reporting notice seemingly demanding BEE compliance documentation from all financial institutions.

Sakeliga would like to remind Financial Service Providers (FSPs) that the FSTC does not possess the legal power to compel such reporting, as is evident from the FSTC’s reply to our PAIA request.

FSPs should take note of the following:

1. No legal obligation exists for FSPs not participating in BEE to comply with FSTC BEE reporting demands.

2. Failing to respond to the FSTC’s annual BEE reporting notices and a failure to meet procurement targets outlined by the 2017 Financial Sector Code is not a violation by FSPs of their professional and legal duties.

3. The FSTC has no statutory power to sanction FSPs that do not participate in BEE and decline to submit documentation.

4. FSPs that do participate in BEE can at most be downgraded one BEE level for not submitting a report in time or not meeting some Sector Code priority element score.

5. Information submitted to the FSTC could potentially be used against institutions in future; institutions should carefully consider whether voluntary disclosure serves their interests.

6. The costs of BEE compliance, including verification fees, administrative burden, and the structural distortions BEE imposes, fall on businesses that choose to participate.

Sakeliga's recommendation:

Multiple businesses not participating in BEE have reported to us that the FSTC has not acted against them, even though they ignored or expressly declined to comply with the FSTC’s similar demands in previous years.

We therefore recommend that:

• FSPs not participating in BEE can ignore the FSTCs reporting notice.

• FSPs that do participate in BEE should carefully consider the trade-offs of a possible BEE downgrade, and compare it to the moral, legal and business risks associated with complying with the request contained in the notice.

If you’d like further clarification from the FSTC, you can use our simple email template here. You can modify as needed.

Third Wave BEE:

The FSTC’s demands are unfounded and an example of the third wave of BEE, in which regulators seek to extend their monitoring reach before turning the industry’s initial co-operation into a basis for aggressive BEE enforcement.

Additional resources:

• FSTC Reporting Notice 01 of 2025
• For the FSTC’s official answers to our PAIA requests, click here.