Determination of License Applications under Namibia’s Virtual Assets Act 10 of 2023

In the fast-evolving landscape of virtual assets, Namibia’s Virtual Assets Act 10 of 2023 provides a structured framework for the determination of license applications, ensuring that entities entering the virtual asset space meet stringent standards.

Section 9 of the Act outlines the crucial steps and considerations undertaken by the Regulatory Authority in evaluating applications for licenses under the Act.

International Standards and Collaborative Insights:

Global Benchmarking:

In the determination of license applications under Section 9(1), the Regulatory Authority harnesses the guidance provided by international standards relating to virtual assets. This approach ensures that Namibia aligns itself with global best practices, fostering a regulatory environment that is both robust and internationally recognized.

Collaboration with Competent Authorities:

The Regulatory Authority also taps into the wealth of information available from competent authorities or comparable entities. This collaborative approach enhances the depth of the evaluation process, drawing on insights from regulatory bodies with relevant experience and expertise.

Comprehensive Evaluation Criteria:

License Application Assessment:

Section 9(2) mandates the Regulatory Authority to conduct a comprehensive assessment of each license application received under Section 8. The Authority may either grant the application, possibly with conditions, or refuse the application. Importantly, this decision is communicated in writing to the applicant along with detailed reasons.

Stringent Satisfaction Requirements:

The Regulatory Authority is bound by a set of stringent requirements outlined in Section 9(3) that must be satisfied before granting a license. These include ensuring the applicant’s incorporation or registration in Namibia, having a registered office or place of business within the country, and the residency of individuals associated with the applicant.

Fit and Proper Assessment:

A critical aspect of the evaluation involves determining the fitness and propriety of the applicant, its officers, beneficial owners, and their associates. This assessment, as specified in Section 9(3)(j), ensures that only individuals of integrity and competence are granted licenses.

Financial Compliance and Adequate Arrangements:

The Regulatory Authority scrutinizes the financial standing of the applicant, ensuring compliance with financial requirements stipulated by the Act. Additionally, the Authority assesses whether the applicant has made adequate arrangements for the proper supervision of activities under the license, ensuring compliance with anti-money laundering laws and other relevant regulations.

Impact on Financial Services Industry:

To safeguard the integrity of the Namibian financial services industry, the Regulatory Authority evaluates whether the approval of the application would cause undue prejudice. This assessment, as per Section 9(3)(h), considers the potential impact on the financial services landscape.

Relevant Statutory Authorizations:

Ensuring a holistic regulatory approach, the Regulatory Authority verifies that the applicant has obtained any other relevant statutory authorization required for its business activities.

Transparency and Public Notice:

Public Notification:

To enhance transparency and keep stakeholders informed, Section 9(4) mandates the Regulatory Authority to publish the names of license holders, including the type of licenses issued, in the Gazette. This public notification contributes to accountability and trust within the virtual asset ecosystem.

License Duration and Conditions:

License Validity:

Upon approval, licenses issued in terms of Section 9(5) remain in force from the date of issue until canceled, suspended, or amended under the Act. The duration is subject to the conditions specified in cases of suspension or amendment.

Conclusion:

Namibia’s Virtual Assets Act 10 of 2023 sets a robust foundation for the regulation of virtual asset services, emphasizing transparency, international alignment, and adherence to global best practices. The determination of license applications, as outlined in Section 9, underscores the commitment to ensuring that entities operating in the virtual asset space meet the highest standards of integrity, compliance, and financial responsibility.

As the virtual asset industry continues to evolve, the meticulous evaluation process outlined in the Act provides a solid framework for sustainable growth and innovation.