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Investment regulations unwrapped

The Namibia Financial Institutions Supervisory Authority last month announced its intent to amend  current regulations pertaining to investment managers. The move is seen as an effort to align the regulatory framework with international best practice and comes hot on the heels of the recently finalised Financial Institutions and Markets Bill.
Responding to queries by The Economist, the Namibia Financial Institutions Supervisory Authority Manager for Corporate Communications, Isack Hamata said, “Globalised and integrated financial markets pose significant challenges to the regulation of financial markets. Therefore, in a global and integrated environment, regulators must be in a position to assess the nature of conduct of financial services industry players to ensure the existence of fair, efficient and transparent markets.”
Hamata added, “Amendments are constantly being effected to existing legislation in order to respond to prevailing conditions and to align with international best practice.” According to Hamata, the condition for investment managers will cover matters such as Approval of Investment Managers, Compliance and Failure to Comply with Conditions and Requirements, Money or Securities Lodged with Investment Managers, Duties of an Investment Manager, Accounting Records, Appointment and Duties of Auditors, Furnishing of Information to the Registrar, Compliance Officer and Compliance Reports, Ceasing, Dissolution or Liquidation of Business, and finally, Withdrawal of Approval.

He said, “We have gone past the planning stage and industry consultation stage and are now in the finalisation stages. This includes the legal drafting and eventual tabling in Parliament. Promulgation will hopefully happen in the first half of next year. Simultaneously, the Standards and Regulations are also being drafted and consultations in this regard are still to follow.” The new regulations tie in with the soon to be promulgated Financial Institutions and Markets Bill, and provide clarity on what is deemed an investment manager and a stock broker. Hamata explained that while investment managers and stock brokers are regulated and supervised under the Stock Exchanges Control Act, a clear definition is lacking. The so-called FIM Bill will however seek to address these shortcomings, he stated.
Hamata added, “The draft Conditions for Investment Managers, define Investment Manager as a company that is in the business of administration of investments approved in terms of section 4(1)(f) of the Stock Exchanges Control Act, and satisfies the requirements of the conditions.”
Under the  Financial Institutions and Markets Bill, the term stock broker makes way and an all-inclusive term of financial intermediary is used, defined as a person who receives compensation, directly or indirectly, for providing a financial service.

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