SEC close to introducing Commodity Exchange market

Director General of SEC, Rev. Daniel Ogbarmey Tetteh

The Security and Exchange Commission (SEC) has said it is on course to introduce the much talked about ‘Ghana Commodity Exchange’, a new market in the securities industry to among others cater for the agricultural sector.

It is also believed that this will, together with other developments, add to the breadth of options in the securities industry, as part of the drive to see the introduction of new markets and new products.

The Ghana Commodity Exchange will be an addition to the already-existing markets, including the Ghana Stock Exchange, Ghana Fixed Income Market and the Ghana Alternative Market.

The Director-General of SEC, Rev. Daniel Ogbarmey Tetteh said: “A lot of work has been put into finalising the regulatory framework to support launching the Ghana Commodity Exchange before the end of this year”.

He also indicated that work has been completed on the guidelines to enable Real Estate Investment Trusts be operationised in Ghana.

The SEC boss, while addressing a gathering at the Initial Public Offer (IPO) of the NGIS Money Market Fund launching in Kumasi, said it is the Commission’s desire to see a deeper penetration of capital market products and services in the country.

But to do this, he opined, one of the prerequisites is to have strong and compliant market operators – strong in the sense of having the requisite human, technological and financial capital to operate efficiently and effectively.

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He stressed that the industry also needs compliant market operators – that is, market operators who play by the rules and regulations as designed in the regulatory framework.

“It is important to note that the securities business is a regulated activity – meaning that you cannot just set-up shop to operate in the securities industry without first acquiring the requisite licences and becoming familiar with dictates of the regulatory environment in order to be compliant.”

While congratulating the board of NGIS for going through the process of nurturing and executing the idea of this money market fund, he urged them to ensure they practice and uphold good corporate governance standards in order to keep faith with their investors.

He also advised them to keep investor education on the front-burner – adding that clients must be made to understand the Fund’s features so as to manage their expectations.

“Again, sticking with the asset allocation as specified in the scheme particulars must not be compromised at all; and the board should push the fund manager to work hard on delivering good returns for the investors,” he stated.

The NGIS Money Market Fund is expected to invest in a diversified portfolio of securities in their short-, medium- and long-term, and is offering a minimum of 200,000 shares; and also an unlimited number of shares at an initial cost of GH¢0.50 per share.

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The minimum investment purchase of shares under the initial public offer is set at 200 shares, and thereafter in multiples of 100 shares.

The prospectus for the NGIS Money Market Fund was issued under the Securities Industry Act, 2016 (Act 929), and the Unit Trusts and Mutual Funds Regulations, 2001 (L.I. 1695).

The initial public offering period for shares commenced on August 2, 2018, and is expected to end on August 22, 2018.

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