The Securities and Exchange Commission (SEC) has assured the investing public that there is no need for “panic withdrawals” as it is committed to ensuring a sound, efficient and robust market where investors’ funds are protected.
The SEC’s assurance follows the revocation of licences of 23 insolvent savings and loans companies and finance houses by the Bank of Ghana (BoG) on Friday, 16 August 2019.
The central bank's action was taken pursuant to Section 123 (1) of the Banks and Specialised Deposit-Taking Institutions Act, 2016 (Act 930), which requires the Bank of Ghana to revoke the licence of a Bank or Specialised Deposit-Taking Institution (SDI) where the Bank of Ghana determines that the institution is insolvent.
The Bank of Ghana has also appointed Mr Eric Nipah as the Receiver for the specified institutions in line with section 123 (2) of Act 930.
SEC, in a public notice issued on its website on Thursday, 22 August 2019, said it is aware of “some level of anxiety among a section of investors” due to the recent reforms within the financial services sector and wishes to reiterate that the objective of the reforms is “to produce sound market operators, stronger financial intermediation and financial inclusion and ultimately a more robust financial sector.”
It stated further that it is also aware that certain investors are “unable to access their mature investments” from some of its “licensed Asset Management Companies (AMCs) or Fund Managers (FMs) due to some liquidity challenges”.
The Commission, however, assured the general public that it has instructed all “AMCs/FMs to put in place mechanisms to meet their obligations as they fall due to their clients, consistent with the terms and conditions of the investment contracts signed with them” and encouraged dissatisfied customers of these AMCs/FMs to “lodge written complaints with the Commission.”
The SEC further continued that it is engaging with stakeholders on efforts to improve liquidity in the industry and emphasised that: “The Commission has and continues to introduce regulatory measures to help ensure a stable, efficient, transparent and fair marketplace where investors’ funds are protected. Some of these measures include holding AMCs/FMs accountable for honouring their obligations to their clients”.
“The introduction and enforcement of corporate governance guidelines for operators in the industry including AMCs/FMs, Higher minimum capital/liquidity requirements for AMCs/FMs and other operators, Stringent licensing requirements, Investment guidelines including restrictions on related party investments/guaranteed investments and Streamlining of the Commission’s internal processes including through automation of processes to promote efficiency.”
The Commission further reiterated that there is no need for “panic withdrawals” as it is committed to “ensuring a sound, efficient and robust market where investors’ funds are protected” and added that “there are well-run and sound licensed AMCs/FMs” and the public “can confirm by asking a few questions regarding their governance practices, their track record, staff turnover, any unresolved complaints and regulatory breaches.”
It also encouraged the investing public to call its toll-free line, 0800100065 or visit its website, www.sec.gov.gh, for any enquiries they may have.