The supervisory and licensing fees charged by Non Bank Financial Institutions Regulatory Authority (NBFIRA) are posing challenges to the asset management industry.
Botswana Investment Fund Management (BIFM) Chief Executive Tiny Kgatlwane made the revelation on Botswana Insurance Holding Limited’s (BIHL) latest annual report that was released this week. “The institution of new regulatory environment is posing significant challenges to both Bifm and the entire asset management industry in Botswana,” commented Kgatlwane.
Efforts to get comment from NBFIRA Chief Executive Oaitse Ramasedi on BIFM‘s view were fruitless as he was engaged in a daylong meeting this Wednesday. BIFM and other asset management companies in the country continue to actively engage the regulator ‘in coming with fees that are fair to both parties,’ said the annual report. BIFM, which is part of the diversified BIHL group, is the first non-bank institution to publicly air its grievances about the new regulatory environment introduced by the regulator.
Last year, NBFIRA introduced new fees and supervisory levies after consulting with players. Under the new regulations, asset managers (excluding International Financial Services Centre asset managers) will on an annual basis pay a flat fee of P25 000. In addition, BIFM among other asset managers will have to pay 0,035 percent of total assets it manages at the end of each financial year. This means BIFM paid a whopping P735, 000 to the regulator in lieu of assets under its care for the year ending December 2012. Meanwhile, Kgatlwane’s annual report showed that their results for the past year were satisfactory despite the turbulent environment they operated under.
“We not only had to deal with the lingering effects of the global recession, but also felt the full impact of the loss of large part of our Zambian investments while dealing with the upheavals of our international restructuring,” she stated. BIFM’s property company in Zambia (Quantum) has been affected by a new regulation that calls for collection of rental income in the local currency-Kwacha rather than the US dollar. The devaluation of Kwacha has resulted with lower income collected by the company. A few years ago, BIFM also suffered a major setback when their employee benefits company in Zambia was forced to cede 21 percent of its stake to local investors. For the 12 months to December, BIFM reported an increase in Assets Under Management (AUM) of 21 percent to P21, 6 billion. The company also managed to launch Unit Trust some few months ago, which are expected to further diversify investment portfolio.