Countdown to FIMA delayed – know your ABCs!
Update on the current status of the implementation of FIMA:
On 8 July, an announcement was made that FIMA’s enactment date has been delayed and will not be 1 October 2022 as expected. Please stay tuned for further updates. Sybil Somaes will still be issuing compliance preparation tips as the ABCs remain important, as FIMA is inevitable even if delayed.
By Sybil Somaes, Managing Director of Compli-Serve Namibia.
Time is marching on as we edge closer to the implementation of the Financial Institutions and Markets Act (“FIMA”) – 1 October 2022 – and if you currently work for an entity that is impacted by the change in regulation, you may be wondering what you need to focus on now, as you prepare for October.
In this article I’ll share my top compliance tips to assist you as you get ready for this new world of compliance, starting with my top recommendations under the first letter, A. This three-part series will summarise the most essential FIMA reminders – the ABCs – to keep in mind.
Assess your requirements
By now you should have a good understanding of the impact of the FIMA Act (the Act) on your business, assuming that your gap analysis and readiness levels have been determined. If not, do not fear, you still have time to determine the impact of the legislation on your business and assess what the key action items are. A great place to start would be to conduct a review of your existing processes against the new requirements. Compli-Serve (Namibia) can assist you with this evaluation exercise.
Affirm the rules of registration
As mentioned in previous articles, all regulated entities, except for insurers will be required to apply for registration under FIMA within 12 months of the commencement date of the Act. If you are a retirement fund, you would need to submit your rules for registration as early as 90-days after the commencement date of the Act as part of compliance with the new requirements related to your board. This means 1 January 2023.
Investment managers must ensure that their portfolio managers are registered within 6-months of the commencement date. This means 1 March 2023.
Align your governance structures
It is important to ensure that the governance of your financial institution or intermediary is in place. Review the new requirements applicable to boards, such as the fit and proper and independence requirements and start recruiting directors in compliance in line with these. Determine if your business is obligated by the Act to appoint an auditor, valuator, custodian, or trustee. Ensure that your principal officer complies with the requirements as prescribed for your industry.
Amend your documents
The new obligations introduced by the Act will require you to amend existing documentation such as client contracts, company policies and procedures documents as well as introduce new policies and procedures documents. Start reviewing your documents in line with the requirements of the Act and subordinate legislation. A draft standard on plain language requirements has been published in the Government Gazette and prescribes requirements that will be applicable to all financial institutions and intermediaries regulated under the Act. The standard, amongst others, for example, requires documents to be written to be as informative as possible; written for the clients, not for the financial institution or financial intermediary; and to avoid legal and technical terms or jargon unless these terms are explained.
Once you understand the impact of the Act and its subordinate legislation on your business, it is time to allocate resources for the implementation of the Act. You would need to ensure that sufficient provision is made for the implementation of the Act, both from a financial and human perspective. The Act introduces significant changes that will impact how you currently conduct your business.
Accept the change
Change is hard, especially when familiar processes must shift. Preparing as much as you can before FIMA implementation should ease some of the disruption that is natural with the transition ahead. Often accepting that change is coming before it does, can make it easier to manage too.
Contact Compli-Serve: [email protected]