Regulatory Reform in the Non-Banking Financial Sector
NAMFISANAMFISA’s primary role is to regulate and supervise non-bank financial institutions to ensure the soundness of these institutions and the integrity of the financial contracts they enter into with consumers. Central to this role is the promotion of a financial sector that is honest, transparent, and aligned with international best practices.
Over the past two years, NAMFISA has been engaged in an extensive legislative reform process to address the historical gaps in the laws governing the non-banking financial sector. Many of these laws, including the Pension Funds Act No. 24 of 1956, are outdated and no longer adequately serve the needs of the modern financial system. As part of the reform agenda, the Financial Institutions and Markets Bill (FIM Bill) was developed and is now at the final stages of consultation before promulgation.
The legislative reform is guided by several key imperatives:
Over the past two years, NAMFISA has been engaged in an extensive legislative reform process to address the historical gaps in the laws governing the non-banking financial sector. Many of these laws, including the Pension Funds Act No. 24 of 1956, are outdated and no longer adequately serve the needs of the modern financial system. As part of the reform agenda, the Financial Institutions and Markets Bill (FIM Bill) was developed and is now at the final stages of consultation before promulgation.
The legislative reform is guided by several key imperatives:
To address these shortcomings, the FIM Bill aims to empower NAMFISA to act more decisively and adopt a risk-based supervisory approach. This shift will ensure that regulatory efforts are focused on areas of highest risk to the financial system and consumer protection.
Enhancing Fiduciary Responsibility
The FIM Bill places significant fiduciary responsibility on the Boards of Trustees managing pension funds. Trustees are expected to:
NAMFISA will have the authority to remove Trustees from office where there is evidence of abuse of power or failure to act in the best interest of fund members.
It is important to note that umbrella funds are recognised by NAMFISA as legal stand-alone entities. These funds operate under the same regulatory framework as traditional pension funds and are subject to the same governance and disclosure requirements.
It is important to note that umbrella funds are recognised by NAMFISA as legal stand-alone entities. These funds operate under the same regulatory framework as traditional pension funds and are subject to the same governance and disclosure requirements.
The Role of Pension Fund Members
Members of pension funds also play a crucial role in safeguarding their retirement savings. This includes:
Improving Reporting and Compliance
NAMFISA has historically struggled with the effective supervision of pension funds due to non-compliance with statutory return submissions. Annual submissions have proven insufficient for effective oversight.
To improve this, NAMFISA, through the Provident Institutions Division, has initiated a shift toward quarterly reporting. This will provide timely data to improve regulatory decisions and market monitoring. The Division has consulted widely with industry stakeholders to ensure the new reporting framework is practical and cost-effective.
To improve this, NAMFISA, through the Provident Institutions Division, has initiated a shift toward quarterly reporting. This will provide timely data to improve regulatory decisions and market monitoring. The Division has consulted widely with industry stakeholders to ensure the new reporting framework is practical and cost-effective.
A Shared Responsibility
While NAMFISA is responsible for ensuring a safe and sound financial sector, the success of this mandate also depends on:
The regulatory reform process is ultimately about building a resilient financial sector that protects consumers, encourages savings and investment, and supports Namibia’s broader socio-economic goals.
