REPORT ON THE CENTRAL BANK OF LESOTHO (COLLECTIVE INVESTMENT SCHEMES) REGULATIONS, 2018
PRESENTED
BY
THE PORTFOLIO COMMITTEE ON THE ECONOMIC AND DEVELOPMENT CLUSTER
National Assembly Phone: +266 22323035 P. O. Box 190 Fax: + 266 22310434
Maseru 100
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1.0 INTRODUCTION
On Friday 31st August, 2018, the Hon. Minister of Finance tabled the Central Bank of Lesotho (Collective Investment Schemes) Regulations, 2018 in the House. The Regulations were referred to the Portfolio Committee on the Economic and Development Cluster for consideration in terms of Standing Order No.100 (3). The Committee invited the Ministry of Finance to a briefing session in accordance with Standing Order No. 101 (2).
The Committee, therefore, presents this report to the House for consideration.
2.0 MINISTERIAL BRIEF
The Ministry of Finance supported by Central Bank of Lesotho presented a brief to the Committee on Tuesday 11th September, 2018. It was indicated that the Central Bank of Lesotho (Collective Investment Schemes) Regulations, 2018 are enacted with the purpose of improving the initial set of regulations ,Central Bank of Lesotho (Collective Investment Schemes) Regulations of 2001, to accommodate new innovations in financial sector products intended to promote economic growth with the main objective of;
(a) Introducing a regulatory tool for Collective Investment Schemes(CIS’s);
(b) Promoting the growth of CIS’s as capital market vehicles ,and
(c) Ensuring that the interest of investors are adequately protected against any possible risks.
The new set of regulations protect investors by ensuring that banks to which CIS funds are deposited , play a custodian/trustee role in order to ensure that CIS funds are not misused and thereby offering protection to investors’ funds , which loophole was glaring under the old regulations. They also bring control measures regarding the appointment of key personnel as well as service providers by subjecting them to a fit and proper test prior to appointment.
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They further introduce the new concept of agents who act on behalf of asset managers, which was not available under the old regulations.
There will be no financial implications during the implementation of this subordinate law. It was reported that consultations were made with relevant stakeholders which included banks, insurance companies and relevant Ministries
3.0 RECOMMENDATIONS
The Committee recommends the adoption of this report and the approval of the Central Bank of Lesotho (Collective Investment Schemes) Regulations, 2018 by the House.
4.0 COMMITTEE OBSERVASTIONS
4.1 The Committee observed that at least 15% of the investment schemes should be invested in Lesotho. 4.2 The Committee also observed that there are presently only two Asset Managers licenced and this Regulations will provide broad licencing for other players in the industry. 4.3 There is a need to publicise this activity to the ordinary citizens to understand this business and its activities.
5.0 COMMITTEE DECISIONS
The Committee has decided to allow all clauses in the Regulations.
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Members of the Committee
- Hon. S. T. Rapapa (chairperson) 2. Hon. L. S. Litšoane 3. Hon. L. R. Mahase 4. Hon. S.D .Mangobe 5. Hon. T. J. Sophonea 6. Hon. M. J. Maime 7. Hon. T. L.Kibane 8. Hon. M. P. Maqelepo 9. Hon. L. C. Hlomelang 10. Hon. L. K. Mokoma 11. Hon. L. Moramotse 12. Hon. M. Malefane 13. Hon. M. C. Hlao 14. Hon. T. T. Mosena 15. Hon. M. R. Khati 16. Hon. M. Hlalele 17. Hon. P. D. Mafereka 18. Hon. T. P. Mokeretla 19. Hon. N. Motsamai 20. Hon. S. H. Sekatle 21. Hon. T. L. Mokhosi 22. Hon. M. Tlali