Corporate governance crucial for survival

Corporate governance crucial for survivalNamfisa on capital markets The capital markets industry saw an increase in assets under management signifying good performance despite the challenging times following the 2020 economic shock overall. Staff reporter - For businesses to survive and thrive under these uncertain times it is important to embrace best practices of corporate governance and risk management, according to the chief executive officer of the Namibia Financial Institutions Supervisory Authority (Namfisa), Kenneth Matomola.

Matomola made these remarks as part of his welcoming statement at a recent industry meeting for the capital markets industry, regulated by Namfisa. Industry meetings are some of the platforms aimed at enhancing stakeholder engagement through which Namfisa, as the regulator, would like to foster beneficial relationships premised on collaboration, trust and productive and active engagement.

Matomola said the capital markets industry saw an increase in assets under management signifying good performance despite the challenging times following the 2020 economic shock overall. Namfisa has observed that many entities operating in the capital market arena have started offering digital products and offerings, which is a commendable and responsible approach to remaining relevant in the market and to safely service clients.

REFORMS

Matomola updated the regulated entities on the ongoing Namfisa legislative reforms.

Finance minister Iipumbu Shiimi has requested Namfisa to draft regulations for the central securities depository that will be issued under the Stock Exchanges Control Act, which have been circulated for industry input. Matomola urged the industry to provide their input for consideration.

The new Namfisa Act was passed by the National Assembly and signed by president Hage Geingob. The long-awaited Financial Institutions and Markets (FIM) Bill was approved by the National Assembly and awaits presidential assent. The National Council has referred the Financial Services Adjudicator (FSA) Bill back to the National Assembly for amendments relating to cross referencing to the Namfisa Act and FIM Bill.

The core focus of the legislative change is the shift from compliance-based and standalone supervision to a risk-based and integrated supervision, allowing for better preparedness, risk mitigation and efficiency in the supervision framework.

AIMS

The envisaged legislative instruments further aim at correcting market inefficiencies, thus making the non-bank financial sector more relevant to the national development objectives and promoting national competitiveness through alignment with the best regional and global practices. Additionally, the legislative reform seeks to foster confidence in the financial system and soundness of financial institutions and financial intermediaries.

The Bills thus aim at maintaining the highest standards of conduct of business by non-bank financial institutions and financial intermediaries, and the reduction and deterrence of financial crime. The bid for greater consumer protection, transparency and highest standards of market conduct necessitated the need to introduce designate legislation for the speedy, accessible and cost-efficiency resolution mechanism for consumer complaints, ensuring that consumers of financial products and services are treated fairly, Namfisa said.