After ‘immense pressure’ from the industry, Non-Bank Financial Institution Regulatory Authority (NBFIRA) has finally bowed down and reduced most of its levies and charges it first introduced in 2012.
NBFIRA publicised the revision through a letter dated May 6 written by the newly appointed NBFIRA deputy Chief Executive (shared services) Michael Tlhagwane, which Botswana Guardian has a copy of. Subsequently, the old levies and charges which were contained in ‘Statutory Instrument No.11 of 2012’ ‘ have now been revoked, paving way for the new ones, which have been effected with immediate effect. The previous levies were seen by many industry players as exorbitant. Even before the old levies could be implemented for the first time, they met resistance from most industry players who viewed them as too ‘too high’ and unrealistic for the local industry. The regulator went ahead and implemented them nonetheless.
In the new levies, NBFIRA said asset managers (excluding International Financial Services Centre asset managers) would now pay P25 000 and 0,0162 percent of total value of investments under their management at the end of each financial year. This is far less than the 0,035 percent and P25 000 asset managers such as Botswana Investment Fund Management (BIFM) and Allan Gray paid in the past statutory notice. BIFM Chief Executive Tiny Kgatlwane was one of the few that had the guts to stand up against NBFIRA on the old levies. “The institution of new regulatory environment is posing significant challenges to both Bifm and the entire asset management industry in Botswana,” she said in the company’s annual report. Players have warmly welcomed the new levies. “It’s a lot better than the previous ones,” said Paul Masie, the Chief Executive of Alexander Forbes (Botswana).
“But there is still room for improvement,” he added. Central securities depositories such as Bourse Africa will not be affected by the latest revision of NBFIRA levies and charges, as they will still continue to pay a flat fee of P150 000 annually. Botswana Stock Exchange (BSE), which is headed by Hiran Mendis, will still continue to part with P150 000 annually. Insurance brokers such as Penrich Insurance Brokers will still pay an annual flat fee of P50 000, but will now pay a lesser amount of 0,135 percent of the gross premiums written as opposed to 0,35 percent in the old statutory levies. The micro-lending business, which is dominated by BSE listed company Letshego will be charged 0,5 percent of the total loan book at the end of each financial year, same as the 2012 regulation. IFSC companies such as IMARA will also pay P27, 500 annually, the same as last year.
An industry player who spoke on condition of anonymity said the new levies are now ‘market related’. “They are now reasonable,” the source said. In introducing the levies NBFIRA, which is headed by Oaitse Ramasedi, said they are necessary to ensure the regulator carries out all necessary research of the industry and make informed decisions that could help grow the industry.
Tlhagwane also informed all industry players that the levies are due to be paid in two equal instalments before 30th April 2013 and on or before October 30th 2013. Efforts to reach NBFIRA on why they have revised the levies were not successful.