Lesotho Introduces Stricter Licensing Requirements for Financial Institutions

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Maseru, Lesotho - In a bid to strengthen the country’s financial sector, the government of Lesotho has introduced new licensing requirements for financial institutions. The Financial Institutions (Licensing Requirements) Regulations, 2016, came into effect on [insert date] and aim to ensure that only fit and proper individuals are allowed to operate financial institutions in the country.

Personal Declaration Sheets

According to the regulations, a personal declaration sheet must be submitted by each appointed director, officer, or branch manager of a financial institution. This requirement is aimed at ensuring transparency and accountability within the industry.

Shareholding Requirements

The regulations also stipulate that any person intending to acquire 10% or more of the voting rights of a licensed institution must apply for prior approval from the Commissioner of Lesotho. This includes individuals acting alone or in concert with other persons.

Additionally, financial institutions seeking to acquire 33% to 50% of the voting rights of another institution must undergo a thorough evaluation process before being granted approval. This will involve submitting an application supported by information required in Schedules 1, 2, and 3, which includes details on the applicant’s business activities, financial projections, and existing shareholdings.

Audited Financial Statements

The regulations also require financial institutions to submit audited financial statements for the past two years, as well as certified true copies of their memorandum and articles of association. Foreign financial institutions must also provide a statement from the supervisory authorities of their home country declaring that they have given prior approval for the establishment of a subsidiary or branch in Lesotho.

Penalties for Non-Compliance

The Commissioner of Lesotho has been empowered to approve or reject applications based on fit and proper criteria for bank shareholders, as well as other relevant factors. The regulations also provide for penalties for non-compliance, including fines and imprisonment.

Experts’ View

Experts say that the new regulations are a step in the right direction towards strengthening Lesotho’s financial sector and ensuring the stability of its banking system. “These regulations will help to ensure that only reputable individuals and institutions are allowed to operate in the country,” said [insert expert name]. “This will help to maintain public confidence in the financial sector and prevent fraudulent activities.”

Conclusion

The Financial Institutions (Licensing Requirements) Regulations, 2016, came into effect on [insert date] and apply to all financial institutions operating in Lesotho. The regulations are designed to ensure that only fit and proper individuals are allowed to operate financial institutions in the country, and to maintain public confidence in the financial sector.

Financial Institutions (Licensing Requirements) Regulations, 2016
Lesotho
Banking
Financial Regulation