Financial Crime World

Financial Regulatory Bodies Strengthen Oversight to Ensure Stability in Lesotho

In a bid to maintain financial stability in Lesotho, the country’s regulatory bodies are working tirelessly to ensure that all financial institutions operate within the bounds of the law. The Department of Other Financial Institutions Supervision is at the forefront of this effort, with three divisions tasked with regulating non-banking financial institutions.

Regulatory Bodies: A Key Player in Maintaining Financial Stability

The Pensions and Securities Supervision Division (PSSD), Insurance Supervision Division, and Non-Banks Supervision Division (NBSD) are responsible for maintaining financial system stability through regulation and supervision of pension funds, securities industries, insurance companies, and non-banking financial institutions.

Mandate of Regulatory Bodies

  • Pensions and Securities Supervision Division (PSSD):
    • Maintain financial system stability through regulation and supervision of pension funds and securities industries.
    • Foster liquidity, solvency, and proper functioning of a stable market-based financial system.
    • Protect investors and promote the safe and sound development of the financial sector.
  • Insurance Supervision Division:
    • Register insurers and insurance intermediaries.
    • Formulate and enforce directives and codes of conduct for insurance business.
    • Promote healthy competition and sound business cooperation within the local insurance market.
    • Offer protection to policyholders and the public, and promote the safe and sound development of the financial sector.
  • Non-Banks Supervision Division (NBSD):
    • Foster liquidity, solvency, and proper functioning of a stable market-based financial system.
    • License, register, and supervise non-banking financial institutions.
    • Promote the safe and sound development of the financial sector.
    • Formulate, adopt, and execute relevant NBFIs policies and supervisory frameworks.

Key Functions of Regulatory Bodies

  • PSSD:
    • Formulate and execute relevant laws regulating financial institutions.
    • Develop the financial sector through building requisite infrastructure and participating in national initiatives.
    • Undertake on-site and off-site inspections, licensing and registering regulated institutions, handling consumer complaints.
  • Insurance Supervision Division:
    • Formulate, adopt, and execute insurance policies and supervisory frameworks.
    • License insurance companies and intermediaries.
    • Develop the insurance sector through building requisite infrastructure and participating in national initiatives.
    • Undertake on-site and off-site inspections, handling consumer complaints.
  • NBSD:
    • Formulate and execute relevant laws regulating financial institutions.
    • Develop the financial sector through building requisite infrastructure and participating in national initiatives.
    • Undertake on-site and off-site inspections, publishing supervisory reports, licensing and registering NBFIs, handling consumer complaints, compiling statistics.

Conclusion

The combined efforts of these three divisions are crucial to maintaining financial stability in Lesotho. By regulating non-banking financial institutions and ensuring they operate within the bounds of the law, the country can avoid financial crises and promote economic growth.