Regulators & Industry Associations
Regulation is designed to ensure that financial institutions conduct their business in a secure, honest and transparent manner. This is particularly important for institutional investors like pension funds, insurance companies and collective investment schemes, since they are all offering services to and looking after the savings and investments of households and citizens.
Regulation of the financial sector in Africa tends to be fragmented, with several ministries or agencies holding responsibility for different institutional investors. However, the international trend towards regulatory consolidation, involving the amalgamation of different regulators into a single body, is also true for Africa.
No pension fund, insurance company or collective investment scheme is permitted to operate and offer its products or services to the general public without being subject to the appropriate regulatory regime; there may be exceptions for state-owned institutional investors. Regulators have powers to compel the firms under their supervision to come into compliance, and the ultimate power to remove a license altogether. In addition, trade associations may require their members to adhere to additional standards of good conduct and ethical behaviour.
Internationally accepted standards that apply to different parts of the financial sector are set by international bodies such as the International Organisation of Securities Commissions (IOSCO) for securities and collective investment schemes, the International Association of insurance Supervisors (IAIS) for insurance, and the International Organisation of Pension Supervisors (IOPS) for pensions. These organisations, which have a membership consisting of the relevant regulatory bodies in most African countries, develop and publish general principles upon which individual countries may base their own regulatory framework.