BG reporter

Hot tempers, murmurs and pleas for lower levies foreshadowed Non Bank Financial Institutions Regulatory Authority (NBFIRA) “consultative” meeting Wednesday in Gaborone as the two year-old regulatory authority faced resistance from non-banking institutions.
The aim of the meeting was to give capital market industry players - fund managers, asset managers, micro-lenders, and others - feedback on their contribution to the newly proposed NBFIRA annual levies and fees.
In May, capital market industry players expressed concern over NBFIRA’s proposed levies. Asset managers and micro-lenders had complained that NBFIRA’s total annual fee and levy of P37.5 billion has potential to cripple Botswana’s fledging capital market. NBFIRA then revised the fees and levies taking on advise from industry players.
On Wednesday, scores of pension fund and asset managers, brokers and micro-lenders crowded Boipuso Hall for a meeting hosted by NBFIRA and complained that NBFIRA’s revised levies still could not help address their concerns as fees and levies remain exorbitant. Some openly advised NBFIRA to stick to its regulatory role and not rip them off. “You should levy us, make your millions and ask government to fund you,” charged one attendant.
There was palpable tension when Director of Capital Markets, Julian White presented on the newly revised fees and levies to a packed hall. She defended NBFIRA decision to charge industry players, contending it is not for the taxpayers to fund NBFIRA business, but for those who consume the services. She said in the 2010/11 budget NBFIRA required a total of P43 million. Government then provided P19 million as subvention. “We had a shortfall of 56%. This triggers the urgency of raising fees from stakeholders,” she noted.
The authority projects that in 2011/12 financial year, it will have a shortfall of 71% and expects capital market players to bridge the shortfall. “We want you to fund the deficit, not taxpayers,” charged White who, together with NBFIRA Chief Executive Officer, Oaitse Ramasedi, made it known that they were not going to take comments from stakeholders.
“We are not going to take any comments from you today,” explained White to a fully packed hall.
“The meeting is aimed at giving stakeholders feedback,” she said, adding that the levies and fees will be proposed to NBFIRA board next month.
But that did not intimidate the enraged industry players. White’s presentation was interrupted several times by murmuring criticism and with delegates questioning the rationale at arriving at the fees and levies. She disparaged concerns that Botswana has a fledging capital market. “Actually, it is NBFIRA which is still at infancy, not the market,” she charged. “Our charges are similar to those in Namibia and Mauritius,” she said, but hinted that they are not privy to information on how their peers in Mauritius and Namibia operated when they were introduced.
The regulator revealed revised licensing and application fees that would see NBFIRA accruing millions of Pula.
The authority retained the P10 500 charge for any company under the IFSC, and P10 000 for any new trustees and investment advisors respectively. According to the new charges, Botswana Stock Exchange and Bourse Africa will be charged an application fee of P80 000 annually, an increase of P30 000 from the previously proposed P50 000. This is because, according to White, the Financial Services Board of South Africa charges about P251 000 to exchanges for the same service.
NBFIRA has revised application fee charged to securities dealers or any new stockbroker from P15 000 to P10 000 respectively.
NBFIRA is the regulator of all non-banking financial entities registered in Botswana including Pension Funds, Asset Management, Consumer/Micro lending, insurance and Collective Investment Undertakings. Empowered by the NBFIRA Act of 2006, the regulator has not been imposing levies or fees on the capital markets participants, except a flat P50 000 charged on Bourse Africa. The institution justifies its decision to impose the charges, saying it will be used to monitor and supervise licensed entities.