New and sophisticated financial techniques and instruments (IFRS9, IAS32) are in principle a positive development insofar as they reduce the likelyhood of risk being concentrated in, or more on, the financial institutions sector of the economy.
Speaking at the signing ceremony of the MoU between NBFIRA and BAOA, the NBFIRA CEO, Mr. Ramasedi, highlighted that this dispersion of risk makes it more difficult to track at times hence concerns that some pockets of concentration may still exist. He said the MoU between BAOA & NBFIRA is premised on the need for BAOA to advise NBFIRA on issues relating to improved transparency, accurate and timely information on exposures and underlying risks, which may affect, or trigger, investor confidence amongst entities regulated by both parties.
Mr. Ramasedi said Accountancy Oversight bodies and Non-Bank Financial Regulatory Authorities globally have cooperated closely and fruitfully in developing the guidance for auditors of regulated entities, regarding their statutory duty, to report certain matters such as material defects in the financial systems and controls of accounting without bias.
Speaking at the same ceremony, the BAOA CEO, Mr. Majinda, highlighted that BAOA has skilled personnel with expertise in the IFRSs, the IAS and IPSASs required for the purposes of this MoU. He highlighted that NBFIRA and BAOA, as regulators, have common clients hence they need to collaborate by way of the MoU being signed with a view to avoid potential conflicts and overlaps that could result in duplication of efforts and consequently wasteful utilisation of scarce national resources. He noted that through the collaboration the two regulators would save time for both regulators and their clients.
Mr. Majinda also highligted that BAOA is in negotiations with other regulators to create similar MoUs or arrangements.