SEC keen on healthy capital market, protection of investors’ funds

The Securities and Exchange Commission is taking pragmatic steps to strengthen the capital market and to protect investors’ funds, Deputy Director-General Paul Ababio has said.

Speaking during Tesah Capital webinar on the theme: “Investing after the Financial Sector clean-up,” Mr Ababio said key among the measures was the issuance of new guidelines for market operators to take care of potential areas, which could disturb the capital market.

“The new guidelines we have issued are to strengthen the market, increase product offering and diversity and support future growth,” he said, adding that the Commission also worked on reviewing and enhancing licensing requirements.

Mr Ababio said the Commission learnt from the cleanup that there were corporate governance weaknesses and had, therefore, introduced conduct of business guidelines in which market operators were required to issue annual reports to allow investors to know their standing.

All these moves, he said, were to increase the level of transparency as the Commission found out during investigations that there were related party transactions that were not done transparently.

“We also saw a lack of professionalism and some misconducts. This new licensing framework seeks to address that. We are enhancing the training programme we offer to market operators as well as implement a continuous professional development through Ghana investment and security institute.”

He said the revocation of licenses created space for the regulator to focus on the remaining firms and to allocate resources efficiently in supervising the firms remaining and fulfil its mandates of investor confidence and protecting the investor.

The Commission has also digitized the submission of reports to allow for real timing inspections by the regulator and to address concentration issues.

“There is an issue of inadequate disclosure to clients who are the asset owners. We have asked that fund managers improve the mandate that they assign with clients and that we also inform the public to ask for statements, get a sense of the condition of your portfolio and understand the risk in that portfolio.

There are different risks given your investment profiles,” he said.

Mr Ababio said the Commission’s overarching goal was to consolidate the asset management industry and to ensure compliance, adequate risk management and clearly defined board roles.

Also, to support market development with new products such as intensified long-term saving scheme to create additional pullout for fund managers outside of the pension’s regime.

“We are looking at a five-year strategic plan,” he said, adding that capacity development for the market and for the regulator was a topmost reality.

“We want to have stronger investor confidence in the capital market, we want to have improved diversified investment landscape. We want to have a well informed and educated investing public and a commission that is enhanced with adequate institutional capacity to regulate efficiently and strategically,” he added.

Mr Kwame Pianim, emphasized continuous education for the public, market players and regulators.

He said the oversight role of the regulators was key in ensuring the confidence of the investing public in the fund management institutions.

“Investments are good and we the public must have a safe and sound mind that these institutions that want us to save are protecting our investments,” he said, adding that people should be encouraged to invest in equities, insurance, and others.

Ms Eugenia Basheer, Managing Director, Tesah Capital, said corporate governance was core to the company’s dealings, successes, and future and that the company was looking towards a partnership to create and build a growing generational wealth.

She said although the financial sector clean-up exercise might have achieved its objectives, it had also engendered fear of investing among the people.

However, she said, there were dire consequences of failing to invest for the future.

“Investing is the only proven way in which you can sit back and watch your money grow for you. Investing has, therefore, not lost its benefits,” she said and encouraged people to invest.