- The Securities and Exchange Commission says it will raise the capital requirement of Ghana's fund managers.
- Director-General of the SEC says the managers that fail to meet the requirement will “fall out”.
- The requirement will be raised to $365,260 (GH¢2 million) from the current $18,281 (GH¢100,000).
Ghana’s Securities and Exchange Commission plans to increase the minimum capital requirement of fund managers to GH₵2 million
The Securities and Exchange Commission (SEC) says it will increase the minimum capital requirement of Ghana's fund managers to $365,260 (GH¢2 million) from the current $18,281 (GH¢100,000).
The Director-General of the SEC, Daniel Ogbarmey Tetteh who spoke to Bloomberg noted that fund managers who will not be able to meet the new capital will have to "fall out".
According to him, the directive, which will require law changes, will be fully communicated by the end of the year for compliance by December 2020.
Low Capital Requirement
Mr Tetteh further explained that existing capital requirements were too low, allowing too many people to start fund-management companies which hindered supervision.
He said, “Some who will not be able to meet that capital will have to fall out.”
Adding that “If you are a fund manager you must keep to the obligations in the contract with your clients. You signed an investment contract to do ABC -- just stick to it.”
The reason for the increment
The markets' regulator aims at strengthening the industry and restoring confidence.
It said at least 70,000 investors struggle to access savings that were trapped in the aftermath of a separate clean-up of banks, savings and loans companies, and micro-lenders.
The SEC is investigating 21 fund managers for sinking as much as GH¢5 billion in risky investments such as unlisted bonds, direct private equity stakes and related-party deals that are difficult to liquidate.
It is as well investigating another GH¢4 billion is tied up in fixed-term investments, which are now starting to trickle in after the government stepped in and bailed out failed banks with GH¢11.2 billion and microlenders with another GH¢925 million.
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