Regulatory Alerts2018-04-19
Added · Updated
Financial Services (Licensing and Regulatory Requirements for Holding Companies) Directive, 2018
The Registrar of Financial Institutions establishes licensing, structural, and operational requirements for holding companies owning or controlling at least two financial institutions, one of which is prudentially regulated. The directive mandates a two-phase licensing process involving an approval in principle and final approval, requiring a non-refundable fee of Malawi Kwacha equivalent to USD5,000 and minimum start-up capital matching the highest applicable requirement for the group's subsidiaries. Holding companies are restricted to a maximum of two hierarchies, prohibited from engaging in day-to-day management of subsidiaries, and limited to permissible activities such as holding equities and providing approved shared services. The Registrar may impose monetary penalties of up to K50,000,000 for holding companies and K10,000,000 for senior management, and must revoke licenses if operations do not commence within 12 months or if control over all subsidiaries is lost for more than 12 months.