Rev. Ogbamey Tetteh, Director General, Securities and Exchange Commission (SEC)
For the past seven months, four Mutual Funds and Unit Trusts have been without any fund managers, as their Directors and Trustees have failed to appoint new fund managers.
This follows the revocation of the licenses their erstwhile fund managers on November 8, 2019, by the Securities and Exchange Commission (SEC).
The Mutual Funds and Unit Trusts involved are; Gold Money Market Fund Limited, Weston Oil and Gas Fund Limited, as well as Freedom Fund Unit Trust and McTrust Unit Trust.
In effect, the performance of these Funds and Trusts will be adversely affected given that they have been without fund managers, responsible for devising and implementing a fund’s investment strategy.
A notice issued by SEC of the update on the appointment of Fund Managers for 18 Collective Investment Schemes indicated that, out of the 18 Collective Investment Schemes affected by the recent abrogation of license of some investment managers, 13 have notified the SEC of the appointment of new Fund managers. This is made up of 11 Mutual Funds and 2 Unit Trusts.
These are; CDH Balanced Fund Limited, Sirius Opportunity Fund Limited, First Fund Limited, FirstBanc Heritage Fund Limited, Galaxy Balanced Fund Limited, as well as Galaxy Money Market Fund Limited, and Ideal Sika Fund Limited.
The others include; Omega Equity Fund Limited, Omega Income Fund Limited, Nordea Income Growth Fund Limited, Alltime Bond Fund Limited, Unisecurities Unit Trust, and Gold Fund Unit Trust.
Furthermore, the Trustee of EM Balanced Unit Trust, Universal Merchant Bank Limited has been directed by the SEC to liquidate EM Balanced Unit Trust.
Pursuant to Section 122 (2) (b) of the Securities Industry Act, 2016 (Act 929 or “the Act”), the Securities and Exchange Commission (SEC) on Friday, November 8, 2019, revoked the licenses of 53 Fund Management Companies.
The revocation of the licenses of these companies became necessary as they had among other things, largely failed to return client funds, which remain locked up. Some fund managers were also found guilty of other major regulatory infractions, such as investing in unapproved securities, over-concentration of investment portfolios, and offering customers guaranteed returns which is not only illegal but impracticable.
In view of this, the Boards of Directors (for the Mutual Funds) and Trustees (for Unit Trusts) of 18 Collective Investment Schemes (CIS) whose Fund Managers had their licenses revoked, were directed by the SEC on November 15, 2019 to appoint new fund managers for the management of the various affected CIS by January 10, 2020, which itself was an extended deadline.
Over the past few months since the expiration of that deadline, the Regulator has engaged the respective trustees and directors, in the interest of investors in order to determine other possible courses of action for unitholders/shareholders of the unit trusts/mutual funds that were unable to meet the requirements of the previous directive.
In accordance with Act 929, the Regulator has assured that it shall further engage the respective Directors and Trustees, in this regard. However no new deadline has been set for the appointment of new investment managers and no specific sanctions have been spelt out for failure to do so.
