Financial Crime World

NAMFISA Scrutinizes Financial Institutions for Fit and Proper Requirements

Enhancing Financial System Stability and Integrity

The Namibian Financial Institutions Supervisory Authority (NAMFISA) has intensified its scrutiny of financial institutions to ensure they meet the fit and proper requirements, a critical component in determining their fitness to operate. This move is aimed at enhancing the stability and integrity of the country’s financial system.

Fit and Proper Requirements

According to NAMFISA’s guidelines, an entity seeking registration must demonstrate:

  • Honesty: Individuals referred to in clause 11(a) have not been disqualified from being a director of a company.
  • Fairness: They have not breached a fiduciary duty or perpetrated grossly negligent business practices.
  • Ethical behavior: They maintain liquid assets equal to at least 25% of their annual expenses.
  • Integrity: They have audited financial statements that are satisfactory to the authority.

Key Requirements for Financial Institutions

Financial institutions must:

  • Maintain a documented policy relating to fitness and propriety for individuals, which includes compliance with required criteria for continuing education and professional development.
  • Review and update this policy annually by the board of directors or equivalent governing body.
  • Ensure transparency in reporting any matter that may affect their operations.

Qualifications, Experience, and Skills

Key persons within financial institutions are expected to have:

  • Relevant qualifications
  • Appropriate experience
  • Essential skills for prudent management of their operations

Consequences of Non-Compliance

Financial institutions have been advised to review their policies and procedures to ensure compliance with NAMFISA’s guidelines. Failure to comply may result in regulatory action, including suspension or revocation of licenses.

Commitment to Financial System Integrity

As the country’s financial landscape continues to evolve, NAMFISA remains committed to ensuring that financial institutions operate with:

  • Transparency
  • Integrity
  • Prudence

The authority will not tolerate any entity that compromises the fit and proper requirements. “Our primary objective is to protect the interests of depositors, investors, and the general public,” said a NAMFISA spokesperson.