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Framework for Regulating FinTech Innovations in Namibia

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The Financial Institutions Act (FIA) of Namibia has established a regulatory framework to oversee FinTech innovations. This framework outlines key points, programme exit procedures, outcomes, and consequences for failed programmes.

Key Points

  • Regulatory Programme: The Bank will apply the FIA Act and accompanying regulations throughout the Regulatory Programme.
  • Disclosure: The Bank will publish non-confidential information about participating FinTech innovations, including details of the innovator and type of Programme.
  • Good Standing and License Requirements: FinTech innovations must maintain their license and good standing status in other jurisdictions during the Programme.
  • Phase 4: Programme Exit: The Bank will determine how a FinTech innovation exits the Programme and ensure compliance with all applicable regulatory requirements.

Programme Exit

The programme exit process involves:

  • Report Submission: The innovator must submit a report on its experience, including operational and technical incidents, customer queries, and proposed next steps.
  • Exit Strategy: A well-defined exit strategy is required to address impacts and risks to customers, other financial institutions, and the financial system.
  • Cancellation of Programme: The Bank reserves the right to cancel the Programme if the participant breaches any laws or regulations.

Outcomes

Based on the review process, the following outcomes may be considered:

  • Designation: The Bank may designate the innovation and subject it to existing regulations.
  • Exemption: The Bank may exempt the innovation, allowing it to operate without a license but subject to exemption conditions.
  • Letter of No Objection: The Bank may issue a letter of no objection, allowing the innovation to continue operating outside of its regulatory ambit.
  • Deny Access (Letter of Objection): The Bank may refuse to grant the innovation a relevant license to provide financial services.
  • Amending Existing Regulations or Introducing New Regulation: The Bank may amend existing regulations or introduce new ones to accommodate the FinTech innovation.

Failed Programme

In case of programme failure, the following procedures will be followed:

  • Deemed Failure: A FinTech innovation may be deemed to have failed if it deviates from Programme conditions, fails to comply with laws and licensing conditions, or has substantial evidence of breaching customer protection principles.
  • Reapplication: A FinTech innovation that has failed the Programme may reapply 6 months after the Bank’s decision.

This framework is not exhaustive and may be supplemented or amended as needed.