CHAPTER 44:05
FINANCIAL SERVICES

ARRANGEMENT OF SECTIONS

   SECTION

PART I
PRELIMINARY

   1.   Short title and application

   2.   Interpretation

   3.   Principal object of this Act

   4.   Subsidiaries, holding companies and related bodies corporate

   5.   Controlling parties of financial institutions

   6.   References to obligations where financial institution not a legal person

   7.   Financial services laws bind Government

PART II
THE RESERVE BANK AND THE REGISTRAR

Division 1
Registrar to Regulate and Supervise Financial Institutions

   8.   Registrar of Financial Institutions

   9.   Additional function of Reserve Bank of Malawi

   10.   Registrar’s objectives

   11.   Registrar to report financially unsound financial institutions

Division 2
Financial and Accountability Provisions

   12.   Funding for supervisory functions

   13.   Supervisory levies to be prescribed

   14.   Fees and charges to be prescribed

   15.   Supervisory levies debt due to Registrar

   16.   Levies Account

   17.   Investment of Levies Account surplus

   18.   Registrar’s annual report

Division 3
Other Provisions

   19.   Arrangements with other agencies

   20.   Delegation

PART III
LICENSING AND REGISTRATION OF FINANCIAL INSTITUTIONS

Division 1
Licensing and Registration Requirements

   21.   Financial institutions to be licensed or registered

Division 2
Licensing and Registration Procedures

   22.   Application of the Division

   23.   Licensing and registration applications and procedure

   24.   Notification of a breach of licence or registration conditions

   25.   Issue and publication of licence

   26.   Variation, suspension and revocation of licences and registrations on request

   27.   Variation, suspension and revocation of licences and registrations

   28.   Exemptions from licensing and registration requirements

PART IV
CORPORATE GOVERNANCE

   29.   Board of directors

   30.   Appointment of executive officers and managers

   31.   Removal of executive officers or managers

   32.   Prohibition of self-dealing

   33.   Related Parties

PART V
SUPERVISION AND REGULATION OF FINANCIAL INSTITUTIONS

Division 1
Registrar's Directives

   34.   Registrar’s directives

Division 2
Information, Reports, etc.

   35.   Directions to licensed or registered institutions to provide information

   36.   Requirements to provide information

   37.   Audited statements

   38.   Exchange of information

Division 3
Directions

   39.   Directions to licensed or registered financial institutions

   40.   Directions not ground for terminating contracts or accelerating debt

Division 4
Examinations and Investigations

   41.   Examiners

   42.   Investigators

   43.   Powers and protections of investigators

   44.   Identity cards

Division 5
Self-Regulatory Organizations

   45.   Declaration of Self-Regulatory Organizations

   46.   Rules by Self-Regulatory Organizations

   47.   Person affected to be heard

   48.   Self-Regulatory Organization to inform the Registrar of an appointment of director or executive

   49.   Declaration of Self-Regulatory Organizations revocable by Registrar

   50.   Amendment to Self-Regulatory Organization articles

   51.   Protection for Self-Regulatory Organizations

   52.   Annual reports by Self-Regulatory Organizations

Division 6
Controlling Parties of Prudentially Regulated Financial Institutions

   53.   Limitation on shareholding

   54.   Controlling parties to require Registrar’s approval

PART VI
AUDITORS

   55.   Internal auditor

   56.   Appointment of an external auditor

   57.   Auditor to report to Registrar

   58.   Meetings with Registrar

   59.   Duties of external auditors to the Registrar

   60.   Changes of external auditors to be approved by Registrar

PART VII
REGULATING MARKET PRACTICES OF FINANCIAL INSTITUTIONS

   61.   Application of Part VII

   62.   Misleading and deceptive conduct

   63.   Prohibited practices

   64.   Disclosure by financial institutions

PART VIII
AMALGAMATIONS, TRANSFERS OF BUSINESS, STATUTORY MANAGEMENT AND WLNDING-UP OF PRUDENTIALLY REGULATED FINANCIAL INSTITUTIONS

Division 1
Compromises and Arrangements and Transfers of Business

   65.   Application of Part VIII

   66.   Compromises and arrangements

   67.   Transfer of business

Division 2
Statutory Management

   68.   Appointment of statutory managers

   69.   Statutory managers

   70.   Legal proceedings against prudentially regulated financial institution under statutory management

   71.   Period of statutory management

Division 3
Winding-Up

   72.   Winding-up of prudentially regulated financial institutions

PART IX
ENFORCEMENT OF FINANCIAL SERVICES LAWS

   73.   Enforceable undertakings

   74.   Compensation for loss from breach of financial services laws

   75.   Administrative penalties

   76.   Court Orders

   77.   Exemptions

PART X
REVIEW OF DECISIONS

Division 1
Financial Services Appeals Committee

   78.   Financial Services Appeals Committee

   79.   Membership

   80.   Vacation of office

   81.   Disclosure of interest

   82.   Appeals to the Appeals Committee

   83.   Restriction on altering decisions under review

Division 2
Conduct of Review Proceedings

   84.   Notice of, and parties, to review proceedings

   85.   Procedure

   86.   Hearings

   87.   Rights of parties to review proceedings

   88.   Powers of Appeals Committee

   89.   Rights of legal practitioners, witnesses, etc.

   90.   Summons

   91.   Decisions of Appeals Committee

   92.   Appeal from decisions of Appeals Committee

Division 3
Complaints Resolution Schemes

   93.   Registrar to promote complaint resolution scheme

   94.   Requirements for complaint resolution schemes

PART XI
MISCELLANEOUS

   95.   Advisory bodies

   96.   Guidelines and bullettins

   97.   Holding out

   98.   Indemnity

   99.   Confidentiality

   100.   Customer due diligence

   101.   Offences relating to failure to answer questions

   102.   Offences relating to misleading answers and information

   103.   Offences relating to compliance with directions

   104.   Self-incrimination

   105.   Offences relating to holding out as licensed person

   106.   Destroying documents

   107.   Obstruction

   108.   Preventing compliance

   109.   Extension of time

   110.   Certificate by Registrar

   111.   Offences by bodies corporate relating to state of mind

   112.   Offences by bodies corporate relating to liability of directors

   113.   Penalties for offences by bodies corporate

   114.   Offences relating to acts done partly outside Malawi

   115.   Inconsistency with the Companies Act

   116.   Regulations

PART XII
TRANSITIONAL AND CONSEQUENTIAL PROVISIONS

   117.   Transition period

26 of 2010

An Act to make provision for the supervision and regulation of financial institutions and for matters connected therewith and incidental thereto

[2ND JULY 2010]

PART I
PRELIMINARY

1.   Short title and application

   This Act may be cited as the Financial Services Act, and shall apply in addition to the provisions of other financial services laws.

2.   Interpretation

   (1) In this Act, unless the context otherwise requires—

   “administrative penalty"” means a penalty that the Registrar may impose on any person who contravenes this Act or any financial services law;

   “Appeals Committee” means the Financial Services Appeals Committee established by section 78;

   “associate”

   (a)   in relation to a body corporate, means a controlling party, a subsidiary or a related body corporate of the body corporate; and

   (b)   in relation to an individual, means—

      (i)   a close relation of the individual; or

      (ii)   a partner, or a close relation of a partner, of the individual;

   “bank” means a bank as defined in the Banking Act;

   “close relation"” means spouse, brother, sister, parent, child, child of the spouse and the spouse of any of these relations;

   “controlling party”, means a controlling party as described in section 5;

   “Court"” means the High Court of Malawi;

   “complaint resolution scheme” means a scheme of the type mentioned in Division 3 of Part X;

   “compromise or arrangement” means—

   (a)   a compromise or arrangement in relation to a prudentially regulated financial institution, being a compromise or arrangement of a kind described in the Companies Act; and

   (b)   any other arrangement, however described, for the amalgamation of a prudentially regulated financial institution with one or more other bodies corporate or the reconstruction of a prudentially regulated financial institution;

   “credit reference bureau” means credit reference bureau as defined in the Credit Reference Bureau Act;

   “custodian” means a person who, by way of business, holds property of other persons for safe-keeping;

   “director”, in relation to a body corporate, means each of the following—

   (a)   a person who is appointed to a position of director or alternate director of the body corporate;

   (b)   a person who, although not appointed to a position of director or alternate director, acts as a director of the body corporate;

   (c)   a person in accordance with whose instructions or wishes the directors of the body corporate are accustomed to act, provided that this paragraph shall not apply merely because the directors act on advice given by the person in the proper performance of functions attaching to the person’s professional capacity, or the person’s business relationship with the directors or the body corporate;

   “examiner” means a person appointed as an examiner under section 41;

   “executive officer” means an officer or manager at the most senior level of management of a financial institution, whether or not he is also a director, who effectively manages that financial institution;

   “financial crime” means any of the following—

   (a)   a criminal offence, whether or not arising under a financial services law, that involves fraud or dishonesty relating to a financial institution;

   (b)   financing or facilitating a criminal offence, whether or not it arises under a financial services law, relating to a financial institution;

   (c)   dealing with the proceeds of a criminal offence, whether or not it arises under a financial services law and whether or not it relates to a financial institution;

   (d)   an offence against the Money Laundering, Proceeds of Serious Crime and Terrorist Financing Act, being an offence relating to a financial institution; or

   (e)   financing of terrorist activity in any place;

   “financial group” means either of the following—

   (a)   a group consisting of a prudentially regulated financial institution and each body corporate of which that institution is a controlling party;

   (b)   a group consisting of two or more prudentially regulated financial institutions that have a common controlling party and the bodies corporate of which any of those institutions is a controlling party;

   “financial institution” means each of the following—

   (a)   a bank;

   (b)   each of the following as defined in the Securities Act—

      (i)   a securities dealer;

      (ii)   a securities broker;

      (iii)   a securities representative;

      (iv)   an investment adviser;

      (v)   a stock exchange;

      (vi)   a securities depository;

      (vii)   a collective investment scheme;

      (viii)   an investment company;

      (ix)   a portfolio manager;

      (x)   a securities market intermediary;

   (c)   a person who provides securities registration services for the purposes of the Securities Act;

   (d)   each of the following as defined in the Insurance Act—

      (i)   an insurer;

      (ii)   a reinsurer;

      (iii)   an insurance broker;

      (iv)   an agent for brokers;

      (v)   an insurance agent;

      (vi)   a loss assessor or adjustor;

      (vii)   a claims settling agent;

   (e)   each of the following as defined in the Microfinance Act—

      (i)   a microcredit agency;

      (ii)   a microfinance institution;

   (f)   each of the following as defined in the Financial Cooperatives Act

      (i)   a primary SACCO;

      (ii)   a secondary SACCO;

   (g)   each of the following as defined in the Pension Act—

      (i)   a pension fund;

      (ii)   an umbrella fund;

      (iii)   an administrator of a pension fund;

      (iv)   an investment manager for a pension fund or an umbrella fund;

      (v)   a pension broker;

   (h)   a trustee of a collective investment scheme as defined in the Securities Act, or of a pension fund or an umbrella fund as defined in the Pension Act;

   (i)   an actuary for an insurer as defined in the Insurance Act, or for a pension fund as defined in the Pension Act;

   (j)   a custodian;

   (k)   a friendly society;

   (l)   a medical aid fund;

   (m)   a person who, by way of business, in Malawi—

      (i)   buys or borrows foreign currency from,

      (ii)   sells or lends foreign currency to, or

      (iii)   exchanges foreign currency with,

a person other than the Reserve Bank;

   (n)   a person who, by way of business, transfers funds to foreign countries, or carries out activities to the same, or to a similar, effect;

   (o)   a holding company;

   (p)   a credit reference bureau, as defined in the Credit Reference Bureau Act;

   (q)   a building society as defined in the Building Societies Act;

   (r)   finance or leasing company;

   (s)   the operator of a financial institution as defined in paragraphs (a) to (r) of this definition; and

   (t)   a person, business or fund declared by Registrar’s directives or by another financial services laws to be a financial institution;

   “financial services” means services relating to financial matters;

   “financial services law” means any of the following—

   (a)   this Act;

   (b)   the Banking Act;

   (c)   the Building Societies Act;

   (d)   the Insurance Act;

   (e)   the Pension Act;

   (f)   the Securities Act;

   (g)   the Microfinance Act;

   (h)   the Financial Cooperatives Act;

   (i)   the Reserve Bank of Malawi Act;

   (j)   the Credit Reference Bureau Act;

   (k)   a law that declares itself to be a financial services law for the purposes of this definition;

   (l)   a law prescribed for the purposes of this definition; and includes regulations, the Registrar’s directives and directions;

   “financial year” means a period of twelve months starting on 1 January;

   “finance or leasing company” means a body corporate that provides loans, advances or leasing products, but does not include a bank;

   “friendly society” means an association established with no share capital for the purpose of aiding members of the association and their dependants, being an association that does not employ a person with the main occupation of canvassing for members of, or collecting contributions or subscriptions for, the association;

   “holding company” means a body corporate the principal function of which is to act as controlling party for one or more prudentially regulated financial institutions;

   “investigator” means a person appointed as an investigator under section 42;

   “Levies Account” means the account established as required by section 16;

   “licence” means a licence under this Act or under another financial services law;

   “licensed” means licensed under this Act or under another financial services law;

   “licensee” means a person licensed under this Act or under another financial services law;

   “manager”, in relation to a financial institution, includes a person, whether or not an employee, who exercises managerial functions in relation to the financial institution;

   “medical aid fund” means a scheme that provides insurance or similar cover for financial or other assistance to persons in connexion with prescribed medical services;

   “microcredit” means the provision of small loans to small or micro enterprises or to low income customers or as prescribed by the Registrar, where—

   (a)   such loans are granted to a natural person individually, or in a group, whose income depends on his, her or the group’s own business or economic activity;

   (b)   security for such loans may include non-traditional instruments such as group guarantees or compulsory savings;

   (c)   the borrower may be required to make frequent repayments in small amounts; and

   (d)   such loans may take the form of microhousing or microleasing products designed for microfinance customers;

   “operate”, in relation to a financial institution, includes to—

   (a)   establish or administer the financial institution; and

   (b)   exercise managerial functions in relation to the financial institution;

   “prudentially regulated financial institution” means each of the following—

   (a)   a bank;

   (b)   a licensed microfinance institution;

   (c)   each of the following as defined in the Securities Act—

      (i)   a securities exchange;

      (ii)   a securities depository;

      (iii)   a securities broker;

   (d)   each of the following as defined in the Insurance Act—

      (i)   an insurer;

      (ii)   a reinsure

   (e)   each of the following as defined in the Financial Cooperatives Act—

      (i)   a primary SACCO; and

      (ii)   a secondary SACCO;

   (f)   each of the following as defined in the Pension Act—

      (i)   a pension fund; and

      (ii)   an umbrella fund;

   (g)   a trustee of a collective investment scheme as defined in the Securities Act, or of a pension fund or an umbrella fund as defined in the Pension Act;

   (h)   a custodian;

   (i)   a medical aid fund;

   (j)   a friendly society;

   (k)   a holding company;

   (l)   a building society as defined in the Building Societies Act;

   (m)   a credit reference bureau as defined in the Credit Reference Bureau Act;

   (n)   a financial institution declared by Registrar’s directives or by another financial services law to be a prudentially regulated financial institution; and

   (o)   the operator of a financial institution as defined in paragraphs (a) to (m) of this definition;

   “records” of a financial institution, means documents and information used in the ordinary course of the business of the institution, whether in written form or kept on microfilm, magnetic tape or any other form of mechanical or electronic medium;

   “Registrar’s directive” means a directive issued under this Act or another financial services law;

   “registered” means registered under this Act or under another financial services law;

   “Reserve Bank” means the Reserve Bank of Malawi established under the Reserve Bank of Malawi Act;

   “savings and credit cooperative (SACCO)” means a cooperative, as defined in the Financial Cooperatives Act, whose principle object includes accepting deposits, advancing of loans, and providing other financial services to or for its members and is a licensee;

   “securities” bears the same meaning as in the Securities Act;

   “self-regulatory organization” means a body declared to be a self-regulatory organization under section 45;

   “self-regulatory organization arrangements” means arrangements described in section 45;

   “share”, in relation to a body corporate, means a share in the capital or stock of the body corporate;

   “statutory manager”, for a prudentially regulated financial institution, means a person appointed as statutory manager for the institution under section 68;

   “supervisory expenditure” means expenditure in connexion with the supervisory functions of the Registrar;

   “supervisory functions”

   (a)   in relation to the Registrar, means the functions of the Registrar under or, in connexion with this Act or another financial services law; and

   (b)   in relation to a self-regulatory organization, means the functions of the organization in respect of which arrangements described in section 45 are in force;

   “supervisory levy” means a levy imposed by regulations made for the purposes of section 13.

   (2) A reference in this; Act or in another financial services law to operating or conducting a financial institution includes a reference to operating the institution by providing financial services to a person outside Malawi but this subsection does not limit the provision of this Act or the other financial services law in which the expression is used.

3.   Principal object of this Act

   The principal object of this Act is to provide for the regulation and supervision of financial institutions in Malawi to foster—

   (a)   the safety and soundness of financial institutions;

   (b)   the highest standards of conduct of business by financial institutions;

   (c)   the fairness, efficiency and orderliness of the financial sector;

   (d)   the stability of the financial system; and

   (e)   the reduction and deterrence of financial crime in financial institutions.

4.   Subsidiaries, holding companies and related bodies corporate

   For the purposes of a financial services law, the question whether a body corporate is a subsidiary, a holding company or a related body corporate of another body corporate shall be determined in accordance with the Companies Act as if both bodies corporate were companies for the purposes of that Act.

5.   Controlling parties of financial institutions

   (1) For the purposes of a financial services law, a person is a controlling party of another person (the other person otherwise referred to as “the relevant person” in this section) if the first mentioned person is in a position to control or exert significant influence over the business or financial operations of the relevant person, whether or not that control is exercised.

   (2) Without limiting subsection (1), each of the following is also a controlling party of a person—

   (a)   if the relevant person is a body corporate—

      (i)   a director or member of the governing body of the body corporate;

      (ii)   a person that has the power to appoint a person to be a director or member of the governing body of the body corporate;

      (iii)   a person whose consent is needed for the appointment of a person to a director of the body corporate;

      (iv)   a person that holds at least ten per cent (10%) of the shares of the body corporate;

      (v)   a person that has the power to control at least ten per cent (10%) of the voting rights attached to shares or other securities of the body corporate;

      (vi)   a person that holds rights in relation to the body corporate that, if exercised, would result in the person’s holding at least ten per cent (10%) of the shares of the body corporate or having the power to control at least ten per cent (10%) of the voting rights attached to shares or other securities of the body corporate;

   (b)   if the relevant person is a subsidiary of another person, each person that is a controlling party of the other body;

   (c)   if the relevant person is a prudentially regulated financial institution, a person declared by the Registrar under subsection (5) to be a controlling party of the institution:

Provided that a Minister, the Registrar or the Reserve Bank, in that capacity, shall not be a controlling party of a relevant person in terms of this subsection.

   (3) The provisions of subsection (2) are separate and independent, and none of those provisions affects the interpretation of any other provisions of this section.

   (4) Registrar’s directives may modify subsection (2) (a) (iv), (v) or (vi) by varying the percentage, either generally or in a class of cases specified in the directives.

   (5) The Registrar may declare in writing that a specified person is or is not a controlling party of a prudentially regulated financial institution.

   (6) The Registrar shall make a declaration under subsection (5) that a person is a controlling party of a prudentially regulated financial institution unless—

   (a)   the person has been given notice of the proposed declaration and a reasonable opportunity to make representations to the Registrar about the matter; and

   (b)   having regard to any such representations, the Registrar is satisfied that the person is in a position to control or exert significant influence over the business or financial operations of the institution.

6.   References to obligations where financial institution is not a legal person

   Where this Act or another financial services law imposes an obligation on or in respect of a financial institution that is not a legal person, such as a trust, the obligation shall be deemed to be imposed on or with respect to the person who operates the financial institution, such as, in the case of a trust, the trustee.

7.   Financial services laws bind Government

   Except to the extent specified in a financial services law, this Act and the other financial services laws bind the Republic and the Government.

PART II
THE RESERVE BANK AND THE REGISTRAR

Division 1
Registrar to Regulate and Supervise Financial Institutions

8.   Registrar of Financial Institutions

   (1) There is hereby appointed a Registrar of Financial Institutions for the purposes of this Act and all financial services laws, who shall be the regulatory and supervisory authority for the financial services industry.

   (2) The Governor of the Reserve Bank shall be the Registrar.

   (3) The Registrar shall be supported by adequate structures and employees with appropriate skills to enable him perform the duties of the Registrar.

   (4) Without limiting the Registrar’s powers to create appropriate structures, the Registrar shall establish departments to supervise the operations of banking, insurance, pension benefit fund schemes, securities market entities, and any other area deemed necessary by the Registrar for the better carrying out of the requirements of this Act.

9.   Additional function of Reserve Bank of Malawi

   (1) In addition to the functions it has under the Reserve Bank of Malawi Act, the Reserve Bank has the function of supporting the Registrar in carrying out his functions under this Act and other financial services laws.

   (2) In addition to the functions of the Registrar under this Act and the other financial services laws, the Registrar has the function of advising the Minister on matters related to financial institutions and financial services, whether of his own accord or at the request of the Minister.

10.   Registrar’s objectives

   The Registrar shall perform his supervisory functions with a view to achieving—

   (a)   the safety and soundness of prudential ly regulated financial institutions;

   (b)   the highest standards of conduct of business by financial institutions;

   (c)   the fairness, efficiency and orderliness of the financial sector;

   (d)   the stability of the financial system; and

   (e)   the reduction and deterrence of financial crime in financial institutions.

11.   Registrar to report financially unsound financial institutions

   If the Registrar believes that—

   (a)   a prudentially regulated financial institution is financially unsound and

   (b)   the situation may impair the stability of the financial system or the safety and soundness of financial institutions generally,

the Registrar shall report the matter to the Minister and shall take such actions as the Registrar is authorized to take under any financial services law.

Division 2
Financial and Accountability Provisions

12.   Funding for supervisory functions

   (1) The following funds may be applied to the Registrar’s supervisory expenditure—

   (a)   supervisory levies imposed on financial institutions under section 13, and interest in respect of unpaid supervisory levies;

   (b)   money raised as fees, charges and fines, and interest from unpaid fees and charges, in respect of services rendered by the Registrar in performing his supervisory functions; and

   (c)   money otherwise paid in relation to the Registrar’s supervisory functions.

   (2) The funds referred to in subsection (1) (a) and (c) shall not be applied to any other purpose.

13.   Supervisory levies to be prescribed

   (1) The Minister may, on recommendation of the Registrar, make regulations for, or with respect to, the imposition and collection of supervisory levies.

   (2) The regulations shall set out the basis of calculation of supervisory levies for a financial year.

   (3) Different bases of calculation, and different rates of supervisory levy, may be prescribed for different classes of financial institutions.

   (4) The regulations may include provision for imposing interest on unpaid supervisory levy, and for imposing penalty levy for cases where a miss-statement or other non-compliance by a financial institution leads to an under-collection of supervisory levy.

14.   Fees and charges to be prescribed

   (1) The Registrar may, through a Registrar’s directive, impose fees and charges for licences and renewals of licences, and for other services provided by the Registrar in performing his supervisory functions.

   (2) Different rates of fees and charges may be imposed for different classes of financial services, and different classes of licence or service.

15.   Supervisory levies debt due to Registrar

   An amount of a supervisory levy, penalty levy, fee or charge is a debt due to the Registrar and may be recovered by action in a court of competent jurisdiction.

16.   Levies Account

   (1) The Registrar shall establish an account, to be called the Levies Account.

   (2) The following shall be paid into the Levies Account—

   (a)   money paid to the Registrar as supervisory levies, penalty levies, fees or charges; and

   (b)   money paid to the Registrar in relation to the Registrar’s supervisory functions.

17.   Investment of Levies Account surplus

   Money standing to the credit of the Levies Account but not immediately required may be invested as the Registrar may deem appropriate.

18.   Registrar’s annual report

   The Registrar shall, within six months of the end of each calendar year submit an annual report to the Minister and a committee of Parliament responsible for financial matters, which shall include—

   (a)   details of the sources and application of supervisory funds for the year to which the report relates;

   (b)   an account of the performance of the Malawi financial sector over the year to which the report relates and of the way in which the Registrar has performed his supervisory functions in that year;

   (c)   an account of the Registrar’s proposed supervisory activities and priorities for the year after the year to which the report relates; and

   (d)   details of any matter or circumstance that has arisen since the end of the year to which the report relates that has significantly affected, or may significantly affect, the performance by the Registrar of his supervisory functions in future financial years.

Division 3
Other Provisions

19.   Arrangements with other agencies

   (1) In carrying out his supervisory functions, the Registrar shall consult, and may enter into arrangements with, other agencies of the Government that have functions related to the financial system, the regulation or supervision of financial services, taxation or social security.

   (2) Without limiting what arrangements under subsection (1) may deal with, those arrangements may make provision with respect to—

   (a)   the exchange of information between the Registrar and the other agencies, with due regard for the need to protect appropriately personal information about individuals;

   (b)   consultation between the Registrar and the other agencies;

   (c)   enforcement of financial services laws and assistance with enforcement of other laws; and

   (d)   the conduct of examinations and investigations on a joint basis.

   (3) The Registrar may enter into similar arrangements with organizations outside Malawi that have responsibilities under law for the regulation and supervision of financial institutions or similar institutions.

20.   Delegation

   (1) The Registrar may delegate any of his supervisory functions, other than this power of delegation, to—

   (a)   a director or employee of the Reserve Bank;

   (b)   an examiner;

   (c)   an investigator; or

   (d)   a self-regulatory organization.

   (2) A delegation under this section may be subject to conditions specified in the instrument of delegation.

   (3) In performing or exercising a delegated function or power, the delegate shall comply with directions given by the person delegating the function or power.

   (4) A delegation may be varied or revoked at will and does not prevent the Registrar from exercising the delegated power or performing the delegated function.

PART III
LICENSING AND REGISTRATION OF FINANCIAL INSTITUTIONS

Division 1
Licensing and Registration Requirements

21.   Financial institutions to be licensed or registered

   (1) A person shall not operate, as a business, a financial institution unless—

   (a)   the financial institution is licensed or registered under this Act; and

   (b)   the financial institution is complying with the terms of the licence, including any conditions to which the licence is subject.

   (2) Any person who contravenes subsection (1) commits an offence and shall, on conviction, be liable to a fine of K10,000,000 and to imprisonment for four years.

   (3) In the case of a continued contravention by a person convicted under subsection (1), that person shall be guilty of sr further offence and shall be liable to a fine of K50,000 for every day on which the contravention continues.

   (4) Subsection (1) shall not apply in relation to a financial institution if another financial services law requires the institution to be licensed or registered under that law.

   (5) The Registrar may, by directives not inconsistent with this Act or another financial services law, impose requirements with respect to licensing or registration of financial institutions.

Division 2
Licensing and Registration Procedures

22.   Application of the Division

   This Division shall apply in relation to a financial institution if, by or under this Act or another financial services law, there is a requirement for the financial institution to be licensed or registered.

23.   Licensing and registration applications and procedure

   (1) The Registrar may, on application—

   (a)   grant a financial institution a licence;

   (b)   register a financial institution; or

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