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Financial Institutions Face Tougher Regulations Under New Banking Laws

In a move aimed at ensuring the stability and soundness of the financial sector, the Bank has introduced new regulations that will impact licensed financial institutions, insurers, and securities dealers operating in Swaziland.

Stricter Rules for Financial Conglomerates

Under the new laws, financial conglomerates - groups comprising a financial institution and one or more other undertakings - must adhere to stricter rules regarding control and ownership. The Bank may impose conditions on such groups, including:

  • Limiting shareholdings
  • Controlling exposure to capital and reserves

Tougher Requirements for Licensed Agents of Foreign Financial Institutions

Licensed agents of foreign financial institutions operating in Swaziland will be required to obtain a license from the Bank before engaging in any activities on behalf of their foreign principals.

Consequences of Non-Compliance

The new regulations aim to promote a stable financial system and protect the interests of depositors and investors in Swaziland. Failure to comply with these rules may result in:

  • License revocation
  • Fines and other penalties
  • In extreme cases, collapse of a financial institution or group

Key Provisions

Here are the key provisions of the new regulations:

  • Licensed financial conglomerates must adhere to stricter rules regarding control and ownership
  • The Bank may impose conditions on financial conglomerates, including limiting shareholdings and exposure to capital and reserves
  • Licensed agents of foreign financial institutions operating in Swaziland must obtain a license from the Bank before engaging in any activities on behalf of their foreign principals
  • The Bank has been granted powers to revoke licenses if financial institutions fail to meet certain conditions or standards
  • Non-compliance with regulations may result in fines and other penalties

Effective Date

The new regulations come into effect immediately, and financial institutions operating in Swaziland are advised to familiarize themselves with the changes and ensure compliance.

By introducing these new regulations, the government is strengthening the country’s financial sector and enhancing its reputation as a responsible player on the global stage.