SADC - Committee of Insurance, Securities and Non-Banking financial Authorities of SADC (“CISNA”)

Source: http://www.sadc.int/english/key-documents/protocols/protocol-on-finance-and-investment/#annex10 

Extracted from the SADC Protocol on Finance and Investment.

ANNEX 10

CO-OPERATION ON NON-BANKING FINANCIAL INSTITUTIONS AND SERVICES

PREAMBLE

The High Contracting Parties:

RECALLING that the Committee of Insurance, Securities and Non-Banking financial Authorities of SADC (“CISNA”) was established in June 1998 by the Insurance, Securities and Non-Banking Financial Authorities in the SADC Region (“the Authorities”);

NOTING that a strategy was developed to give direction to the activities Of CISNA and to contribute to the sound regulation, effective supervision and rapid development of the financial services industries;

REALISING that financial institutions supervised by the Authorities are critical for mobilising savings which are important for the expansion of productive capacity and that such institutions require a supporting regulatory framework:

(a) which will attract the investments required for creating economic development within the Region;

(b) for managing the financial risks faced by the financial institutions and users of financial products and services in the Region; and

(c) which must not only be efficient but also properly enforced;

AWARE that there should be close co-operation between the Authorities for the purpose of carrying out CISNA’s objectives in the pursuit of complementary goals to achieve an integrated and credible SADC capital market;

NOTING the increasing need for internationalization, and harmonisation of financial institutions and the interdependence of the activities of financial institutions due to the use of modern technology and closer co-operation between financial institutions;

RECOGNISING the need to mobilise savings that can be used to expand SADC’s productive capacity;

FURTHER NOTING that broad objectives have been set in the CISNA Strategic Plan to achieve the successful regulation and supervision of non- banking financial institutions and the need to share information.

CONSCIOUS that the achievement of the objectives referred to in the CISNA Strategic Plan will be accomplished at different times and in different phases;

NOTING the establishment of CISNA, the adoption of the CISNA MOU and 100 the obligations imposed on the Authorities in the said MOU HEREBY AGREE as follows:

ARTICLE 1
DEFINITIONS

1. In this Annex, terms and expressions defined in Article 1 of the Treaty shall bear the same meaning unless the context otherwise requires.

2. In this Annex, unless the context otherwise requires:

“Authority” means any organ or entity responsible for the regulation and supervision of non- banking financial institutions in their respective jurisdictions within SADC or any designated representative of such authority;

“CISNA” means the Committee of Insurance, Securities and Non-banking Financial Authorities of SADC and the Authorities;

“CISNA Strategic Plan” means the CISNA Strategic Plan set out in Addendum A to this Annex;

“non- banking financial institutions” means any provider of financial advisory and intermediary services, collective investment schemes, insurance institutions and retirement funds regulated or supervised by their respective Authorities;

“financial products and services” means long-term and short-term insurance contracts or policies, benefits provided by retirement funds, financial advisory and intermediary services, shares, debentures, bonds and other forms of securitised debt, futures and derivative products including commodity derivatives, participatory interests in collective investment schemes, and other securities traded in the respective jurisdictions of the Authorities;

“financial services industry” means the supply of financial products and services by financial institutions throughout the Region;

“jurisdiction” means the country, state or any other territory, as the case may be, in which an Authority can exercise its powers;

“IAIS” means the International Association of Insurance Supervisors;

“IOPS” means the International Organisation of Pension Regulators and Supervisors;

“IOSCO” means the International Organisation of Securities Commissions;

“Requested Authority” means the Authority to whom a request is made in terms of this Annex ;

“Requesting Authority” means the Authority making a request pursuant in terms of this Annex;

“securities” means bonds, shares, stock, debentures, securitised debt instruments, equity instruments, debt instruments, futures and derivative instruments (including commodity derivatives), participatory interests in collective investment schemes, and any similar securities to, or combination of, the aforementioned.

ARTICLE 2
ESTABLISHMENT OF THE COMMITTEE OF INSURANCE SECURITIES AND NON-BANKING FINANCIAL AUTHORITIES

There is hereby established a Committee of Insurance, Securities and Non- Banking Authorities of the Southern African Development Community.

ARTICLE 3
COMMUNICATION AND EXCHANGE OF INFORMATION

1. There should be high-level contact between the Authorities in order to inform each other of any significant changes in their respective regulatory environments with a view to harmonizing each Authority’s approach on the subject covered by the shared information.

2. The Authorities shall put one another on their mailing lists for the receipt of periodicals and other important communications.

3. The Authorities will encourage and enhance contact amongst the staff of the Authorities

ARTICLE 4
INFORMATION SHARING

1. The Requested Authority should use its best efforts to obtain information from its own records or from institutions within its jurisdiction in order to provide a Requesting Authority with information that will allow such authority to fulfil its regulatory and supervisory responsibilities.

2. If any Authority comes into possession of information that would be likely to assist another Authority in administering or enforcing the laws or regulations for which it is responsible, the first-mentioned Authority will endeavour to notify the other Authority of the existence of that information.

ARTICLE 5
REQUEST FOR INFORMATION AND ASSISTANCE

1. The provisions of the Annex on the Exchange of Information and Surveillance of Securities, Insurance and Retirement Activities will, with the necessary changes, apply to: (a) requests for information and assistance; (b) the execution of such requests; (c) the permissible uses of information; (d) the rights of Requested Authorities; (e) confidentiality; and (f) the costs of investigations.

ARTICLE 6
COMPLIANCE WITH INTERNATIONAL STANDARDS (DIAGNOSTIC EXERCISE)

1. In order to assist the legislature with the drafting or amending of legislation that is compliant with international standards, the Authorities shall:

(a) undertake in their respective jurisdictions a diagnostic study, analysis or assessment that focuses primarily on assessing the regulatory framework and supervisory practices in terms of the objectives and principles of the IOSCO, the IAIS and the IOPS;

(b) before submission of the assessments verify such assessments through Authority peer or third party review; and

(c) adopt and develop the required structures in line with the objectives and principles recommended by IOSCO, IAIS and IOPS, if the assessment demonstrates that is what is required.

ARTICLE 7
RELATIONSHIP WITH INTERNATIONAL BODIES

1. The Authorities should:

(a) become members of and liaise with IOSCO, IAIS and IOPS; and

(b) disseminate to other Authorities, who are not members of IOSCO, IAIS and IOPS, information derived from those institutions.

ARTICLE 8
DEVELOPMENT PROGRAMME

1. State Parties agree that, the Authorities should, in order to develop focused programmes for their respective financial services industries, assess the level of development of their non- banking financial institutions with regard to, inter alia:

(a) the supply and use of financial products and services;

(b) level of competition; and

(c) any barriers to development.

ARTICLE 9
HARMONISED FINANCIAL REGULATORY REGIME

The Authorities shall work towards the harmonisation of their respective laws and regulations and regulatory and supervisory practices with the aim of preventing or reducing regulatory arbitrage.

ARTICLE 10
TRAINING AND EDUCATION OF STAFF

The Authorities shall:

(a) ensure that both local and foreign training opportunities are developed, expanded and hosted throughout the Region, and made available to the staff of all Authorities;

(b) identify their training needs;

(c) explore the development programme(s) suitable for their needs;

(d) assist as much as possible with the presentation of such training programmes;

(e) organise and encourage attachments throughout the Region or abroad to provide on-the-job training;

(f) organise attachments and shall mutually agree on the duration thereof.

ARTICLE 11
CROSS-BORDER CO-OPERATION AMONG AUTHORITIES

1. The Authorities:

(a) shall identify cross-border activities that could form the subject of cross-border co-operation amongst Authorities, and between Authorities and foreign counterparts (i.e. the prevention of unscrupulous operations, increased access to information, dual listings, the introduction of legislation to prevent money laundering, including the financing of terrorism); and

(b) are committed to facilitate mutual exchange of information and assistance.

ARTICLE 12
CONSUMER AWARENESS CAMPAIGNS

1. The Authorities shall:

(a) assist each other with the introduction of suitable consumer awareness campaigns for their respective jurisdictions;

(b) share with one another problems identified and methodologies used to promote their respective awareness campaigns;

(c) identify the consumer awareness campaigns and initiatives already introduced in their respective jurisdictions to inform and educate consumers of financial products and services; and

(d) assess whether adequate programmes have been introduced and implement initiatives that will enhance consumer awareness.

ARTICLE 13
MEETINGS AND SUBCOMMITTEES

1. The Authorities shall meet as often as deemed necessary but at least twice each year; and shall by consensus, appoint a Chairperson and Vice-Chairperson for a period of not more than two years.

2. The Chairperson and the Vice-Chairperson so appointed will represent CISNA at meetings of the Senior Treasury Officials.

3. The Authorities shall determine the rules and procedures of all meetings.

4. The Authorities may, by consensus, set up such sub-committees as may be deemed necessary to carry out any specific assignment or duty of CISNA.

ARTICLE 14
REFERRALS

If any Authority believes that a matter falls more appropriately within the jurisdiction of another Authority, or that some joint action is required in dealing with the matter, such matter should be referred to the other Authority as soon as is reasonably practicable.

ARTICLE 15
CESSION AND ASSIGNMENT

An Authority or designated representative of such Authority may not cede, assign or transfer any right or obligation granted under this Annex without the prior written consent of all the Authorities, which consent shall not be unreasonably withheld.

ARTICLE 16
CONSULTATIONS

The Authorities shall assist one another to develop approaches for strengthening the regulation, supervision and the efficiency of the financial institutions in the Authorities’ respective jurisdictions while avoiding, where possible, conflicts that may arise from the application of differing regulatory and supervisory practices.