The financial system is heavily regulated globally to increase investor information and ensure financial institutions (FIs) are sound. Governments establish regulatory agencies to implement consumer protection laws regarding financial decisions. FIs are regulated to prevent market failures that could harm the economy. Regulations include restrictions on entry, disclosure requirements, limits on activities and competition, deposit insurance, and interest rate controls.

1. Bachelor of Business Administration (Hons) 2014
12 BBAD
*

2. BBA 2014
*Chapter 3

3. *
*The financial system is among the most heavily
regulated sectors world over for two reasons:
To increase information available to investors
and also to ensure that FIs are fit and sound.

4. *
*Central governments have assigned the FIs
regulatory agencies to implement laws to
protect consumers with regard to financial
decision making.
*These responsibilities include: writing &
interpreting laws; compliance ;consumer
protection, handling consumer complaints, etc.
*www.namfisa.com.na

5. *
*FIIs are regulated in an attempt to prevent
these types of market failures and the costs
they would impose on the economy and the
society at large.
*Market failures indicates that system is not fit
enough in terms of monitoring.
*Imagine what will happen if we experience
bank failures or insurance companies files for
bankruptcy, we will have our assets and our
lives that are fully exposed.

6. *
*To protect the public and the economy from
financial panics, the government has implemented
six types of regulations:
1. Restrictions on Entry (refer to the Banking
Institutions Act)
2. Disclosure
3. Restrictions on Assets and Activities
4. Deposit Insurance
5. Limit Competition (Absa/Bank whk-
Leo/switch)
6. Restrict the Interest Rates (www.sec.com)

7. *WELCOME TO NAMFISA
*In Namibia, Non-Banking Financial Institutions are regulated
by Namibia Financial Institutions Supervisory Authority.
*It operates under the auspices of the Ministry of Finance,
and it has no profit motive.
*Its operations are fully financed through imposition of levies,
registration and penalty fees on financial institutions under
its regulation.

8. *NAMFISA regulates and supervises
* a broad range of institutions,
*which include pension and retirement Funds,
* long-term Insurance,
*short-term Insurance,
* medical aid schemes,
* friendly societies,

9. *unit trust management schemes,
* the stock exchange,
*asset managers,
* participation bond schemes,
* public accountants' and auditors',
* micro lenders,
*and hire purchase outlets.

10. *
*In SA, NBFIs are regulated through the
Financial Service Board (FSB);
*Under the auspices of the Department of
Finance.
*The JSE Securities Exchange (formerly known
as the Johannesburg Stock Exchange)
* is broadly governed by the Securities Services
Act (SSA) of 2004.
*www.fsb.org.za

11. *
* SSA, which is administered by the FSB,
* lays down certain rules that govern the
activities of the JSE.
* SSA requires that the exchange draft a
rule book, approved by the FSB,
*which addresses issues of capital and
* certain other requirements for
membership of the exchange,

12. *
*The type of books of account that must
be kept by a brokerage firm,
* Provision in respect of minimum cover,
*The time allowed for the payment of
share purchase,
* And for the delivery of shares, and
*The condition under which short (bear)
sales may be executed.

13. *
*SSA also calls for brokerage firms to
* submit annual audited financial
statements to the JSE.
*SSA also states that the representative of
the FSB
* is entitled to attend any JSE Committee,
and
*specifies the requirements for the
formation of a stock exchange.

14. *
*Although there is only one stock
exchange in SA,
* The Securities Services Act allows for
* The existence and the operation of more
than one exchange.
*Each year the JSE must apply to the
licensing committee ,
*Of the FSB for an operating license for
the coming year.

15. *
*The JSE was founded in 1887 out of necessity and not simply
out of a desire to have a South African stock exchange.
* Gold-mining fever had gripped the country.
* The miners needed funds for equipments and
* Also for expansion in order to continue with business
operations.
*The JSE is governed by the JSE Committee which consists of
between 10 to 15 members.

16. *
*These members are elected from
*The existing brokerage firms through
*A secret ballot box on an annual basis.
* Once the members have been elected,
*They in turn elect the chairperson,
*vice-chairperson,
*and the president.

17. *
*SIs & LIs are governed by the OTS (Office of the
Thrift Supervisor) through FIRREA (Financial
Institutions Reform, Recovery, and Enforcement Act
of 1989).
*FDIC (Federal Deposit Insurance Corporation), and
different regulators, state by state.
*The FHLBS (Federal Home Loan Bank System)
regulates home loan banks in the US that borrow
funds in the national capital markets and use these
funds to make loan savings institutions that are
members of the Federal Home Loan Bank.

18. *
*Financial Markets are regulated by SEC through
the Securities Act of 1934.
*The SEC has imposed regulations on financial
markets in an effort to reduce excessive price
fluctuations. For example, the NYSE operates
under a series of “circuit breakers” that
require the market to shut down for a period of
time when prices drop by large amounts during
any trading day. This is done to avoid “over-
heating”! The overall supervisor is the “Fed”

19. *
*Test in a week’s time (lets agree on the date).
*Thank you!
*Danken!
*Graci!
*Gracias
*Pranaam!