Deadline looms for Securities Law

Ghana is likely to be on the international securities industry “watch list” if Parliament fails to pass the new Securities Industry Law by December 2012, B&FT has been told.

The deadline has been stipulated by the international securities regulatory body, International Organisation of Securities Commissions (IOSCO), to ensure cross-border enforcement cooperation and investor protection. It is also an effort to deal with uncooperative jurisdictions in the areas of securities regulation, market conduct and prudential supervision.

Meeting the directive will also assist in ensuring that securities regulators from under-regulated or uncooperative jurisdictions develop the capacity to meet the multilateral Memorandum of Understanding (MMOU) international cooperation standard, and have the practical ability to implement those standards.

Failure to comply with the IOSCO’s deadline will result in the country’s capital market losing its opportunity to exchange investor information with other markets across the globe. It would also affect the country’s international ratings, impeding its ability to be upgraded to the highest standing.

The country’s Securities and Exchange Commission (SEC) is a member of the IOSCO whose members are obliged to formulate and implement laws that meet international standards and are friendly to persons who have investments in the countries’ capital market.

Mr. Adu Anane Antwi, Director-General of SEC, in an interview with the B&FT said: “We have done so much work regarding reviewing our laws; we are hopeful and believe that Parliament will be able to pass it into law and allow Ghana to escape from being put on the watch-list of IOSCO.

“We don’t want the international financial community to look at us [and say] that our laws and rules are not conducive for investment; these are some of the things we want to avoid.”

He revealed that Ghana is among the few countries that are struggling to meet the stipulated December 2012 deadline.

Among the countries that have already qualified in Africa is included South Africa, Nigeria, Kenya and Tanzania.

Mr. Antwi said that as a member of this august organisation, the SEC is under obligation to ensure that all the securities laws in the country are aligned to achieve the three main objectives of securities regulation: protect investors; ensure fair, efficient, and transparent markets; and reduce systemic risk.

“We are working toward it; that is why we have to amend our laws to bring in provisions which will allow us to do that. If we don’t have laws that are conducive enough, we’ll have problems.

“We’ve gotten Cabinet approval and are now working on getting Parliament to pass it,” he said.

He explained that amendment of the country’s securities industry law will incorporate developing, implementing and promoting adherence to internationally recognised and consistent standards of regulation, oversight and enforcement in order to protect investors, maintain fair, efficient and transparent markets, and seek to address systemic risks.

The amended bill, when passed by Parliament, will enhance investor protection and promote investor confidence in the integrity of Ghana’s securities market through strengthened information exchange and cooperation in enforcement against misconduct and in supervision of markets and market intermediaries.

The country’s securities industry will also be in a position to exchange information at both global and regional levels on their respective experiences in order to assist the development of markets, strengthen market infrastructure and implement appropriate regulation.

“Our securities law as it is now does not permit us to share information with the other regulators that would enable us to go to court to seek some information.

“As we are working on amending our regulations, we are collaborating with IOSCO’s review group to see how they can be well-structured to meet international securities standards,” Mr. Antwi said.