The Financial Regulation Department
The Financial Regulation Department has three divisions, namely; Bank Supervision, Exchange Control and Capital Markets Development.
Definition and Philosophy:
“We endeavour to act with professionalism, honesty, trustworthiness and fairness to stakeholders at all times.
We promote competition, efficiency, public confidence, safety, stability, prudence and integrity in the financial sector.”
1.Enhance financial supervisory and regulatory functions.
2. Implement risk based supervision framework.
3. Enhance financial regulatory and supervisory arrangements.
4. Promulgation of a Harmful Business Practices Act and a Consumer Credit Control Act.
5. Strengthen anti-money laundering programme for banks.
6.Introduction of authorised dealers with limited authority.
7. Strengthen Exchange Control Regulation.
The Bank Supervision Division
The Bank Supervision Division carries the responsibility of licensing, regulating and supervising banks and other financial institutions in Swaziland. Regulation refers to enforcement of compliance with the framework within which financial institutions are licensed to operate by the Bank. Licensed institutions are subject to prudential rules and regulations. Supervision entails the process of monitoring the control systems, activities, and financial condition of banks in order to ensure that these are operated in a safe manner. The Financial Institutions Act, 2005 (FIA), provides a legal framework for the regulation and supervision of banks and other financial institutions. The FIA empowers the Central Bank with the authority to license these institutions. Two kinds of licences are granted under the provisions of the FIA; these are the banking license and a credit institutions license.
The Exchange Control Division
The Exchange Control Division administers exchange controls on behalf of the Minister of Finance, in terms of delegated authority. The Division’s main functions are to implement, administer and monitor the provisions of the exchange control regulations, as well as to collect, analyse and disseminate information relating to exchange control and cross-border foreign exchange transactions. The authorised dealers in foreign exchange (banks) carry out the day-to-day administration of exchange controls, thus dealing directly with the public. Swaziland earns foreign exchange when it sells goods and services to countries outside the Common Monetary Area and uses foreign exchange when it pays for foreign goods and services. Since Swaziland is highly dependent on imported goods and services, it is necessary to ensure that whatever foreign exchange is earned from exports, tourism and other sources is used to the best advantage to the country. Exchange Control plays a major role in helping to achieve this important goal. Under the Exchange Control Division also lies the anti-money laundering function. In terms of the Money Laundering (Prevention) Act 2001, Central Bank of Swaziland is the supervisory authority on matters relating to money laundering. It is the responsibility of the Bank to ensure that accountable institutions set up internal controls to detect money laundering activities and to report suspicious transactions to the Swaziland Financial Intelligence Unit for further processing.
The Capital Markets Development Unit
The Capital Markets Development Unit was established to promote economic development through capital formation by developing and maintaining a fair, orderly, transparent and efficient securities market. The Swaziland Stock Market, a predecessor of the Swaziland Stock Exchange (SSX) started operating in 1990. It is a market where listed securities may be bought and sold. It is a link between institutions in need of capital finance to expand their businesses and investors seeking investment opportunities for their money. Anybody may sell and buy listed shares or bonds at will, so long as they have the resources required to pay for them. The minimum number that can be bought is 100 shares and 1000 bonds. Buyers and sellers of listed shares and bonds are not allowed to approach the SSX directly when desiring to trade in listed securities. Instead, they may only do so through stockbrokers that are recognised by the SSX.