Regulation 29 takes off
The Namibia Financial Institutions Supervisory Authority this week approved Omaanda Capital, and Desert Stone Fund as an unlisted investment manager and special purpose vehicles respectively, giving the Ministry of Finance the impetus to finally enforce Regulation 29. Regulation 29 falls under the Pension Funds Act No. 24 of 1956 and serves to amongst others; curb the outflow of capital and enable innovative projects, bolster promising investment projects and make domestic savings fruitful for national economic and social developments and provide a framework for regulatory authority to regulate these activities by strengthening the governance structures and risk management and mitigation.
Namibia Financial Institutions Supervisory Authority Chief Executive Officer, Phillip Shiimi said the registration of the special purpose vehicle and unlisted investment manager was a step in the right direction. According to Shimmi, more applications and approvals will be received before the end of the year. He said, “The Authority is confident that more applicants will be registered in the due course as only minor issues are outstanding and the applicants have all indicated that they will submit the outstanding documents or information in due course.” Shimmi added that 10 applications have been received, five of which were unlisted managers, and the other 5 for special purpose vehicles.
Shiimi said the approval of these entities will provide an opportunity to increase economic activity in the real sector of the Namibian economy. He further called on those entities that have still not been approved to ensure they work on the identified shortcomings that caused the delay in approval.
In December 2013, amendment to Regulation 28 under the Pension Funds Act No. 24 of 1956 were promulgated and became effective as from 1 January 2014. Regulation 28, among others, stipulates the minimum (1.75%) and maximum (3.5%) investments by pension funds in unlisted investments, within a period of 12 months from the date of promulgation in accordance with Regulation 29. Further, Regulation 29 under the Pension Funds Act was promulgated to provide a framework under which the unlisted investment by pension funds should be undertaken. As such, the regulations require that special purpose vehicles and unlisted investment managers be established and approved for this purpose.
Unlisted investments are investments that take the form of prescribed equity or debt capital in a company incorporated in Namibia and not listed on any stock exchange but excluding conventional asset classes.