Financial institutions and markets legislation in the home straight

CABINET has given the long-awaited Financial Institutions and Markets Bill the green light and has granted Finance Minister Saara Kuugongelwa-Amadhila permission to submit it to the Cabinet Committee on Legislation, and afterwards to the National Assembly for approval.

The decision was taken at Cabinet’s first meeting of the year on January 26.Once approved by Parliament, the law will replace the existing Namibia Financial Institutions Supervisory Authority (Namfisa) Act. It will also consolidate all other acts regulating the financial sector and currently administered by Namfisa, into one single law.Motivating their decision, Cabinet said the overhaul of the legislative framework for financial supervision is critical because the governance structure of Namfisa needs to be aligned. That way, the Namfisa Board will be properly tasked ‘with overseeing the registrar’s supervision of regulatory functions, since the current act does not make this aspect clear’, Cabinet said in a statement.Reviewing existing legislation was also crucial so that proper market conduct rules could be introduced which would ensure effective supervision. Umbrella legislation will be cost-effective, Cabinet said.’The cost of regulation is exacerbated because of regulatory measures in the legislation being disjointed and disharmonious, calling for the creation of a consistent, uniform regime to suit the Namibian situation.’The new law will furthermore allow trade in financial service to broaden and deepen, which in turn will stimulate business.The bill makes provision for a consumer protection framework, a complaints adjudicator and financial services ombudsman.Commenting on the bill in Namfisa annual report for 2008, Chairman Rick Kukuri said: ‘The current financial turmoil and its potential effects on the global economy may require an overhaul of current financial regulation.’ The bill was crafted in such a way that changes in regulation can easily be adopted by the use of standards, he said.