Regulatory measures at SEC stalls planned 1D1F investment fund

The current halt in granting licenses to new investment advisors by the Securities and Exchange Commission (SEC) has been creating some operational challenges for the Venture Capital Trust Fund (VCTF) with regards to courting support for government’s flagship One District, One Factory (1D1F) Policy.

The VCTF has disclosed that a planned establishment of an Industrial Support Fund for potential investors in 1D1F is currently lingering due to current certification standstills at the SEC.

The Fund’s CEO, Yaw Owusu-Brempong addressing guests at the 4th Quarter GIPC CEOs Breakfast Meeting in Accra, said, “the VCTF has the mandate to set up funds which are managed by private fund managers who, as a requirement are also supposed to be licensed by SEC. The hold on licensing new fund managers is therefore a hindrance to capital access for key national projects”.

“As its stands we are ready to set up a new fund to support 1D1F. We’ve gone through the process and we are currently at the level of appointing a manager but that requires SEC’s license. What it means is that, the VCTF cannot do business with any new investment advisor if the issues at SEC are not promptly resolved. ” Mr Owusu Brempong noted.

While the SEC considers its actions as a regulatory measure to bring sanity into the country’s capital market, the VCTF asserts that the decision could affect the funding of key governmental policy initiatives notably the 1D1F among others.

The VCTF claims it cannot set up a new fund as it stands currently and says that the SEC needs to resolve such regulatory challenges among fund managers.

With the SEC being stricter than hitherto on the licensing and subsequent conduct of Asset Managers, the VCTF is requesting that it, as a matter for consideration, make flexible the licensing requirements for investment advisors.

While the Trade Ministry and the 1D1F Secretariat are creating a policy enabling environment for interested investors for 1D1F, the VCTF however explained that it is open to funding programmes under the policy, but in partnership with fund managers.

“What we do is that we refer investors to fund managers in specific target areas for funding” Mr Owusu Brempong said.

However some investment analysts are questioning the VCTF’s request, pointing out that there are several licensed fund managers that are still licensed and indeed these are tried and tested and as such are better placed to handle the VCTF’s planned new fund than a new investment fund manager which is only now being licensed.