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At the NAMFISA conference held in Swakopmund on 12 and 13 October, risk-based supervision was heralded as the non-plus-ultra for regulatory supervision. NAMFISA prides itself of the regulatory reform that will move the NBFI sector from compliance to risk-based supervision. While this may be a laudable objective, I have yet to understand what was wrong with the relatively cost-effective compliance-based approach of the past, other than being cautioned not to “wait for a burning platform”.

I cannot help feeling that Namibia took a bottom up, instead of a top-down approach to risk-based supervision. Where we – the retirement funds industry - had around 30 compliance requirements under the Pension Funds Act, we will have over 600 under the FIMA. In drafting the FIMA with its standards and regulations, we consulted all available text book of best practices across the world to compose our new legislative and regulatory framework. What we should have done is to identify the risks inherent in our industry and designed the risk-based framework to cover these risks. Obviously, our industry does not encompass all risks that other markets may experience and we may experience some risks that other countries may not experience. Nowhere in any of the presentations did I see any reference to ‘appropriate measures’, although that is quite topical in global discourse on this topic.

Important notice and disclaimer
This article summarises the understanding, observation and notes of the author and lays no claim on accuracy, correctness or completeness. RFS Namibia (Pty) Ltd does not accept any liability for the content of this contribution and no decision should be taken on the basis of the information contained herein before having confirmed the detail with the relevant party. Any views expressed herein are those of the author and not necessarily those of RFS.

 

 

 

 

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