The Namibia Financial Institutions Supervisory Authority (Namfisa) has confirmed the postponement of the implementation of the Financial Institutions and Markets Act (Fima).
Fima, Act No. 2 of 2021, was promulgated on 30 September 2021 and caused a public uproar on contentious regulations on the compulsory preservation of pension funds.
“Pursuant to section 468 (1) of FIMA, the minister responsible for finance needs to determine the date by which FIMA comes into operation. In this regard, the public is informed that FIMA will not come into operation on 1 October 2022 as was previously envisaged. The date on which FIMA will come into operation will be communicated to the public at the appropriate time,” read a statement from Namfisa CEO Kenneth Matomola.
Matomola noted the public and industry input on the subordinate legislation to the FIMA has been received, and feedback on these comments will be communicated during the last quarter of 2022.
“The object of FIMA is to consolidate and harmonise the laws regulating financial institutions, financial intermediaries and financial markets in Namibia, and to provide for incidental matters,” Matomola stated.
In particular, the objects of FIMA are to foster the financial soundness of financial institutions and financial intermediaries; the stability of the financial institutions and markets sector; the highest standards of conduct of business by financial institutions and financial intermediaries; the fairness, efficiency and orderliness of the financial institutions and markets sector; the protection of consumers of financial services; the promotion of public awareness and understanding of financial institutions and financial intermediaries as well as the reduction and deterrence of financial crime
“FIMA takes a wider approach not only to address prudential matters but advocate for issues of market conduct and governance. Under this reform, NAMFISA will shift from compliance or rule-based supervision to Risk-Based Supervision (RBS). RBS will allow NAMFISA to focus its limited resources on the areas that pose the greatest risk to meeting regulatory objectives,” Matomola explained
FIMA replaces the outdated Pension Fund Act of 1956 and was to be implemented as of 1 October 2022.
Under FIMA and in terms of the draft contentious regulations, it is proposed that members who leave a pension fund before the retirement or early retirement age are compelled to preserve at least 75% of their accumulated benefits.
Namfisa conducted formal consultations with industry players on all the draft proposed standards, and regulations under FIMA are currently at an advanced stage.
The official solicitation of comments from the industry on these standards and regulations ended on 28 February 2022.
Matomola added that in the meanwhile, Namfisa is considering and evaluating comments received and consult, where necessary, further with the industry before finalising the standards and regulations for the finance minister to consider for promulgation.