The private sector rejoiced as new legislation entered into force, laying out the organisation and functions of the Non-Bank Financial Services Authority’s (NBFSA) individual units, a move widely-believed to spur further progress and strength in the non-banking financial services sector.
The sub-decree on the organisation and functions of units under the auspices of the NBFSA consists of 65 articles and 13 chapters, and was signed by Prime Minister Hun Sen on July 14, with immediate effect.
Units covered by the legislation include the Insurance Regulator of Cambodia, the Securities and Exchange Regulator of Cambodia, the Social Security Regulator, the Trust Regulator, the Accounting and Auditing Regulator, the Real Estate and Pawnshop Business Regulator and the Internal Audit Unit.
Forte Insurance (Cambodia) Plc Group CEO Youk Chamroeunrith told The Post on July 18 that the NBFSA would provide significant benefits for the insurance sector.
He said outlining the structure and duties of NBFSA units would “boost work efficiency because the authorities would be directly responsible”.
“The NBFSA will help protect the interests of the public, the customers and the insurance companies," he said, adding that the authority would prop up the industry and push up its share of gross domestic product (GDP) in due course.
"We’ve witnessed that in the past, the interests of the public did not seem to be taken seriously. With this authority, the interests of consumers will be taken into greater account”, legal infrastructure will be reformed, opening up more channels of support for the insurance sector, Chamroeunrith said.
Kim Heang, regional operating principal of Keller Williams (KW) Cambodia and owner of the Borey KS Residence, welcomed and expressed support for the sub-decree, which he said would beef up the real estate industry, but cautioned that the unit must be conceded the power and staff needed to effectively serve the sector.
“If we look at the legal aspect, the more the state intervenes, the stronger it [the law] is. When the law is effective, businesspeople will respect it and competition will be transparent, so I support it,” he said.
But in light of the stronger legal framework and implementation mechanisms in place, the additional units would lead to elevated costs for businesses, he cautioned.
“[Still,] if these units wield iron fists, all businessmen must be held under the law, then those who obey will receive benefits. But if the units lack the authority or the manpower, then loopholes will remain in the management,” Heang said.
The sub-decree tasks the NBFSA Secretariat with coordinating the formulation and implementation of policies and strategies for the development of the non-banking sector, including financial technology.
The secretariat will develop strategies and action plans to carry out non-bank financial sector development policies, and facilitate requests for additional regulations, rules or procedures for the management of the sector, as well as monitor and evaluate the effectiveness of the implementation, the edict said.
It added that the secretariat will provide coordination and administrative support for regulators, expert committees, technical working groups or inter-institutional taskforces in the fulfilment of sectoral strategies and action plans, as well as facilitate cooperation with regional and international organisations and development partners.