The Financial Institutions and Markets Act (FIMA) officially came into effect on the 1st of May.

Kenneth Matomola, the Chief Executive Officer of Namibia Financial Institutions Supervisory Authority (NAMFISA), made the announcement today. 

Matomola said both the FIMA and NAMFISA Acts have now fully commenced operations.

According to Matomola, the new law aims to strengthen regulation across Namibia's non-banking financial sector, pension funds, and microlending institutions.

"In that regulation, preservation pension benefits are put on hold, and therefore it's not operational because it requires rework, and after the rework is done, the minister will relocate it so that it will be operational."

Matomola pointed out that the benefits for retirement, pension funds, retirement entities and preservation funds remain unchanged under FIMA, as this is still pending review.

Earlier drafts of the legislation had suggested limiting lump-sum withdrawals at retirement, and it also introduced a system where pension members would only access a small portion of their savings in cash. 

Another widely referenced clause in the initial stages of FIMA was the proposal of a "preservation rule", which would have locked up to 75% of retirement savings until a later age.

FIMA is expected to improve financial stability, promote transparency, provide stronger protection for consumers, and ensure fairness in markets.