The Securities and Exchange Commission (SEC) has indicated its willingness to review its stance on a deadline directive given to fund managers in relation to fixed deposits.
According to Director General of the SEC, Daniel Ogbarmey Tetteh, the directive is not new and it would be “disingenuous for anyone to say that because of our directive, liquidity problems are being created – especially because we said it while giving a window from July to end of December 2018”.
“We are willing, on a case by case basis, to look at some maturities of these fixed term investments or guaranteed returns in the system which may go beyond the cut-off point, because we would like to help the market to manage them,” Ogbarmey Tetteh told B&FT in an interview on Wednesday, at a press briefing to mark 20 years of SEC’s contribution to securities regulation and capital market development in Ghana.
SEC has asked all Fund Managers to stop offering guaranteed returns on investment to their clients. The directive, which has been in effect since July, is among the numerous interventions to sanitise the industry and protect the of the capital market’s integrity.
Rev. Ogbarmey also cautioned that investors could be setting out unwittingly for “some kind of difficult times ahead”, because fund managers are mandated to do what is required of them – which is use their expertise, knowledge and experience to profile the clients and create a portfolio that reflects the clients which SEC has profiled.
He also reinforced SEC’s role by pointing out that it not only ensures enforcement but also promotion of the capital markets.
“Our posture is not that of a policeman; yes, we are here to ensure enforcement, to ensure the markets do what they have to do – but our mandate also involves market development. So, I would like it to go out there that the posture of the SEC is not just to regulate but also promote development of the markets. I am not talking about being compassionate; we are committed to ensuring that we develop the markets.”
Fund management in Ghana has seen enormous growth over recent years, from under GHȼ1billion in 2010 to approximately GHȼ34billion as at March, 2018.
The total number of fund managers last recorded stood at 148, with new entrants seeking licences to operate in the sector.
The Director General also stated that SEC is working on a new capital requirement before end of the year, as well as new guidelines – all aimed at strengthening the markets.
“We have been talking about it for some time now; we had to go through a process, engaging the markets and other relevant stakeholders. We are done with that process; the levels have been set, so it is just a question of the procedure to issue it – I believe before end of the year. We have done a lot of engagement with the markets on that already,” he said.
SEC, which is 20 years-old this year, has planned a two-day capital market conference under the theme ‘Ghana Beyond Aid: the role of the Capital Market’ on November 21 and 22nd respectively.
The idea for the press soiree is to let the press understand what it is planning to do to mark its anniversary, the fact that for 20 years it has been focusing on capital market regulation; in a sense to review what they have done, initiate some policy discussions on some key issues like financing SMEs, housing, financing agric, using the capital markets – because the capital market has an integral role to play in the economy, Rev. Ogbarmey Tetteh noted.