The Non-Bank Financial Regulatory Authority (NBFIRA)’s operations could be compromised were it not for the ‘ridiculously high regulatory levies’it charges, stakeholders say.
While Finance and Development Planning minister Kenneth Matambo says the authority is facing financial problems emanating from low funding by government, he also stressed that the publication of regulations for the collection of supervisory levies and fees in February 2012 has significantly improved the authority’s funding position. Mathambo’s remarks surfaced at a time when the asset management industry is complaining about the levies being too high and posing a serious challenge to them. Just recently, leading asset manager Botswana Insurance Fund Management (BIFM) expressed discomfort through its chief executive Tiny Kgatlwane that, “the institution of new regulatory environment is posing significant challenges to the entire asset management industry.
By February last year NBFIRA introduced regulatory fees in which asset managers are expected on an annual basis to pay a flat fee of P25 000. To top it up the asset managers will also have to pay 0.035 percent of the total assets it manages at the end of each financial year. Some industry players however believe that NBFIRA uses the ‘high’ levies to deliberately cushion its money problems. Mathambo did not help such a belief last week when saying that through the supervisory levies and fees, the Authority will attain a self-funding status and be free from government funding. Upon confrontation, the Authority’s CEO Oaitse Ramasedi however firmly denied that the authority is trying to fatten its balance sheet through charging high fees deliberately.
“Our regulatory fees are revised on an annual basis as per the requirement of the NBFIRA Act. They can either be revised on an upward or downward trend depending on conditions considered by the Ministry of Finance which makes the adjustments on the levies,” he said. Ramasedi however said they were consulting with asset management industry players about a levy fee, which he declined to reveal more details about. Meanwhile Board Chairman Mmatlala Dube said since 2008, financial challenges saw NBFIRA having to defer some of the strategic initiatives, which were basically critical for the newly established regulatory body. “However, we have been fortunate enough to receive some financial assistance from the African Development Bank and World Bank,” she said, adding that the funds have been used towards the development of the NBFIRA key regulatory process such as the development of the Risk-Based supervision model necessary for effective supervision of the sector. Further, Mathambo said significant progress has been made in implementing the regulatory framework.
He said his ministry through the authority is conducting a thorough review of all applicable legislation, pertaining to the insurance industry, retirement funds industry and the capital markets which is expected to align these legislative frameworks to international standards.