Compliance Landscape in Zimbabwe
In Zimbabwe, compliance management has mainly been pronounced within the financial services sector
and mining although in the latter this is mainly limited to a safety and health perspective. Commencing
early 2000, regulators in the financial sector mainly the Reserve Bank of Zimbabwe (RBZ) have been
tightening the regulatory framework and increasing regulatory scrutiny thereby increasing the costs of
compliance for banks. Due to this, compliance has deservedly become a topical issue within the banking
sector as manifested by the emergence of stronger and growing compliance officers and compliance
departments arguably across the board. With more regulatory intrusion coupled with the Compliance
officer being designated a Principal Officer in terms of the Banking Act as amended, compliance
professionals are under heightened pressure to understand regulation and ensure that their businesses
put processes and policies that keep them compliant.
In the Insurance sector, due to the complex and ever-changing economic environment which requires insurance entities to cope with new risks, the Securities & Exchange Commission of Zimbabwe andInsurance & Pensions Commissions (IPEC) embarked on a journey to improve the regulatory framework for their respective constituencies in the country. Although at a slower pace than the RBZ, the pressure on insurance entities and the Principal Officers (as defined in the Pensions regulations) has been increasing by the day with IPEC issuing several regulations and increasing its scrutiny to assess compliance with regulation. The demands and accountabilities for Trustees in the case of Pension Funds have increased due to the fiduciary duty of care they assumed.
In addition, money laundering and terrorist financing has become a topical issue across the world including Zimbabwe and with the need for Zimbabwe to be recognised in the global financial system the Financial Intelligence Unit (FIU) was established to create and monitor the anti-money laundering (AML) framework for the country. This Unit introduced an AML compliance framework with stiff penalties for non-compliance which has increased the compliance burden on entities in Zimbabwe. The said unit even amended its enabling Act with a view to give it more discretion as well as human capital capacity and optimum structures. Currently the country is under the Financial Action Task Force (FATF) engineered grey listing which makes ordinary business constrained due to observed instances of non-compliance.
Due to these developments (including those at ZSE) and many others across the other industries such as medicine, aviation, public sector, functions like compliance or functions executing compliance responsibilities (by whatever name they may be called) which were previously seen as highly technical, rigid and bureaucratic are now being viewed as business-critical roles which contribute to the overall business strategy and can be a sustainable competitive advantage.
These developments in the compliance space and projected variants were the reason for the establishment of the Compliance Society of Zimbabwe (CoSoZ) whose mandate is inter alia to:
In the Insurance sector, due to the complex and ever-changing economic environment which requires insurance entities to cope with new risks, the Securities & Exchange Commission of Zimbabwe andInsurance & Pensions Commissions (IPEC) embarked on a journey to improve the regulatory framework for their respective constituencies in the country. Although at a slower pace than the RBZ, the pressure on insurance entities and the Principal Officers (as defined in the Pensions regulations) has been increasing by the day with IPEC issuing several regulations and increasing its scrutiny to assess compliance with regulation. The demands and accountabilities for Trustees in the case of Pension Funds have increased due to the fiduciary duty of care they assumed.
In addition, money laundering and terrorist financing has become a topical issue across the world including Zimbabwe and with the need for Zimbabwe to be recognised in the global financial system the Financial Intelligence Unit (FIU) was established to create and monitor the anti-money laundering (AML) framework for the country. This Unit introduced an AML compliance framework with stiff penalties for non-compliance which has increased the compliance burden on entities in Zimbabwe. The said unit even amended its enabling Act with a view to give it more discretion as well as human capital capacity and optimum structures. Currently the country is under the Financial Action Task Force (FATF) engineered grey listing which makes ordinary business constrained due to observed instances of non-compliance.
Due to these developments (including those at ZSE) and many others across the other industries such as medicine, aviation, public sector, functions like compliance or functions executing compliance responsibilities (by whatever name they may be called) which were previously seen as highly technical, rigid and bureaucratic are now being viewed as business-critical roles which contribute to the overall business strategy and can be a sustainable competitive advantage.
These developments in the compliance space and projected variants were the reason for the establishment of the Compliance Society of Zimbabwe (CoSoZ) whose mandate is inter alia to:
- encourage and promote compliance within the regulatory environment,
- encourage and facilitate forums for member networking and the exchange of information and ideas,
- establish, maintain and promote principles, standards and guidelines for compliance functions and compliance officers.