Martin Endjala
The technical committee under the Ministry of Finance is still scrutinising the Financial Institutions Markets Act (FIMA).
The Windhoek Observer understands that while public consultations have concluded, the research component is still ongoing, and findings have yet to be presented to the finance minister.
During a media engagement last week in Windhoek, Namibia Financial Institution Supervisory Authority’s (Namfisa) chief executive officer, Kenneth Matomola stated that FIMA can only come into effect once the minister gives the green light.
“As it stands now, FIMA can only come into force once the minister says, ‘Yes, let’s go and implement,’” he said.
Matomola explained that the delay in finalizing FIMA stems from a lack of broader consultation on the benefits of subordinate legislation, which necessitated preservation.
As a result, all relevant stakeholders formed a team to review the subordinate legislation.
This team is tasked with providing the minister with recommendations on the matter before implementation.
“Therefore, the minister said no, let’s wait for this broader consultation and anything that comes out of it, which might affect some of the provisions in FIMA. Then let’s make those amendments, and then we can implement FIMA,” he elaborated.
In addition to this, given that FIMA is an Act of Parliament and there was public unease, the parliamentary committee on economics summoned stakeholders, including Namfisa, to address issues they had with FIMA.
Parliament presented a report with recommendations, debated it, and passed it.
This implies that Namfisa is currently reviewing the FIMA recommendations.
“FIMA is quite technical, and as a technical act, not everybody understands financial matters, and even our financial literacy in Namibia is quite low,” he said.
Matomola cautioned that misinformation or disinformation could derail the implementation of FIMA. Therefore, the delay in enforcing FIMA aims to ensure it aligns with the needs of the entire country, as there is no room for mistakes.
“If you can remember, just a small misinformation that said FIMA is a preservation of pension benefits; therefore, we need to reject it. And everybody was up in arms. But we need to bring everybody along so that they can understand what the benefits are. FIMA has many good things,” he pointed out.
He added that the finance minister would communicate to the public the date on which FIMA would come into operation at the appropriate time.
Regarding FIMA benefits, Chapter 2 accords customers a minimum 30-day “cooling-off” period to change their minds without penalties after signing policy contracts.
It also increases protection amounts from N$50 000 to N$200 000, ensuring that beneficiaries can receive the minimum amount in cases such as death by court orders or creditors.
Market abuse and insider trading will be introduced as civil offences in Chapter 3, along with enforcement mechanisms.
FIMA comprises approximately 10 chapters. Chapter 5 addresses benefits, stating that FIMA will protect members’ retirement savings from their estate, bankruptcy/insolvency, and creditors, provided that the member or their surviving dependents and/or nominees have not yet received these benefits.
Additionally, FIMA will continue to permit the deduction of medical aid fund contributions from pension benefits and their payment to medical aid funds.
Chapter 7 specifies that members joining a medical aid fund cannot be subject to waiting periods of more than 12 months before receiving any benefits.
