Amended securities law set for Dec

A new securities law to address gaps in the regulatory environment and allow for the introduction of new products onto the capital market is expected to be passed by the end of year.

The current securities law -- which is 21-year old -- does not suffice for the changing trend in the securities industry and new products being developed for the capital market, thereby necessitating a review.

Adu Anane Antwi, Director-General of the Securities and Exchange Commission (SEC), told the B&FT that: “The bill is still in the system. It’s being worked on. It first went to cabinet, cabinet then referred it to the Attorney-General’s department. It has been worked on and is on its way to cabinet again. When it is finally approved, it will come to Parliament. We are hoping we will get the bill through parliament before the end of this year. That is our hope”.

“We have introduced new things in the law. We are trying to bring our law to the international level. Our securities law was passed in 1993, and many things have since happened in the market. New products and services have come into the market. Information sharing is now key. If you are working in Ghana you should be able to exchange notes with your US, UK and Japanese counterparts.”

Mr. Antwi said future new products-introduction also informed the decision to amend the existing law.

“We also want to encourage some products on the market. We are looking at encouraging venture capital, private equity funds, and hedge funds. We can grow our economy through private equity funds coming into the market and people using them to do all the projects we need in the country,” he said.

The amended law is expected to further remove restrictions on funds’ investments in the real-estate sector, as it has become necessary to allow capital-market investors benefit more from investing in the real-estate and construction sector. It is also expected to help address the housing deficit in the country.

Currently, funds can invest only up to 10 percent of their money in the real-estate sector -- an area that has become lucrative with the growing population and urbanisation.

In Ghana, about 1.7million housing units are needed to bridge the growing gap. Efforts by central government to address this have met little success.

Growth in construction GDP has averaged 17 percent per annum since the country’s discovery of oil in 2007. The share of construction, including real-estate, in GDP has also risen from 7.2 percent in 2007 to 10.5 percent in 2012.

Mr. Antwi said the revised law is necessary to “bring many of the operators under regulation. We are also bringing many other products into the market. Commodities and Exchange is coming on-board. You need laws to ensure that this is done.

“Derivatives are areas we want to go. It’s a very serious area, but we also need to see how we can introduce derivatives into the Ghanaian market.”

The Commodities Exchange will trade agricultural commodities using spot and future contracts. It will have a regulated warehouse receipt system whereby farmers can deposit their produce for storage in exchange for a receipt that can be sold to a buyer.

A consortium of public and private partners, with eleni LLC as lead promoter, will own the Ghana Commodities Exchange.

The investment partners include Databank Agrifund Manager, Ecobank Ghana and UT Bank Ghana, while government will have a minority stake in the exchange.