NBFIRA presentation at the CIMA CPD Masterclass: "The Future of Compliance in the Non-Bank Financial Institutions Sector"

As part of its stakeholder engagement efforts, the Non-Bank Financial Institutions Regulatory Authority (NBFIRA) held a Master Class for CIMA members on "The Future of Compliance in the Non-Bank Financial Institution's Sector”, focusing on prudential compliance and compliance in Anti-Money Laundering and Countering the Financing of Terrorism and Proliferation (AML/CFT&P).

The Regulatory Authority is mandated to contribute towards the country’s financial stability through the efficient and effective regulation and supervision of the Non-Bank Financial Institutions (NBFI) Sector, in line with international standards and best practices.  Stakeholder engagement initiatives are a critical component in ensuring relevant and timely communication about the Authority’s implementation of mandate and equally important for receiving feedback from stakeholders.    

Facilitating the session, Mr. Sriram Gade, Deputy CEO (Regulatory) expounded that after the 2008 financial crisis, the regulatory landscape evolved becoming more stringent upon greater appreciation of the importance of systematic risks. This led to the imposition of more standards and principles on the NBFI sector. Mr Gade highlighted that despite the fact that regulated industries view regulation as intrusion by supervisors, it is indeed for the good of those markets as it ensures their stability and continuity. He further elaborated that when the Authority started its operations in 2008, in the middle of a financial crisis, it had to work against the tide to regulate the market and to close the gaps through the development of new regulatory frameworks. At inception, some of the markets were not fully regulated and regulations for other sectors were outdated (Insurance Act: 1987, Pension Funds: 1987).

Furthermore, Mr. Gade enlightened CIMA members on the Risk-Based Supervision System (RBSS) that was implemented in 2015 to automate and centralize most supervisory processes within the Authority. The system helps the Authority to efficiently plan, track and analyse the supervisory processes and online returns.

In his presentation Gade expounded that ensuring effective compliance with applicable legislation, rules and guidelines is important as it fosters a stable NBFI sector, ensures growth in the NBFI sector and contributes to the national economy. He further elaborated that enforcement action arises in the event of a non-compliance or breach by Non-Bank Financial Institutions (NBFIs), noting that enforcement in the NBFI sector comprises of applying Financial Services Laws and enforcement tools against non-compliant regulated entities.