FIMA takes effect

The Financial Institutions and Markets Act (FIMA), No. 2 of 2021, and the Namibia Financial Institutions Supervisory Authority (NAMFISA) Act, No. 3 of 2021, are operational with effect from 1 May 2026, following the Minister of Finance's determinations published in the Government Gazette.

The two Acts are the product of a comprehensive review of legislation governing the non-bank financial sector. Together, they replace a fragmented body of legacy legislation with a modern, unified regulatory framework designed to protect consumers, promote financial system stability, and foster confidence in financial markets.

FIMA regulates a broad range of non-bank financial institutions and markets, including insurance companies, pension and provident funds, retirement annuity and preservation funds, collective investment schemes, stock exchanges, central securities depositories, medical aid funds, friendly societies, fund and society administrators, and financial intermediaries and advisors.

The Act is structured across 10 chapters, each addressing a distinct area of regulation, from licensing and market conduct to supervision and enforcement, ensuring comprehensive and integrated oversight of the sector.

For consumers, FIMA means stronger protection for savings and investments, fair treatment by financial service providers, greater accountability from financial institutions and intermediaries, and improved access to financial services.

For the broader economy, FIMA contributes to financial system stability by enabling early identification of risks before they develop into systemic problems. NAMFISA CEO Kenneth Matomola confirmed that commutation rules applicable at retirement remain unchanged under FIMA.

The one-third cash entitlement at retirement for pension funds, retirement annuity funds, and preservation funds, and the 100% lump-sum cash entitlement at retirement for provident funds, as provided for under the Income Tax Act, No. 24 of 1981, continue to apply.

One regulation under FIMA has, however, been withheld. The regulation on the preservation of pension benefits requires reworking and will undergo broader public consultation before the Minister makes any determination to gazette it.

NAMFISA said it would continue active industry consultations, consumer education initiatives, and media and digital advocacy campaigns to support the implementation of FIMA and ensure that all stakeholders are informed of their rights and obligations under the new framework.