The growing trend of Ponzi schemes and panic withdrawals in the financial sector has left the Securities and Exchange Commission (SEC) no option but to stiffen enforcement of regulations.
Speaking at the 2018 Capital Market Forum, Director General of SEC, Rev. Ogbarmey Tetteh says from now on, players in the capital market will be severely dealt with and even barred from operating so as to regain confidence in the sector.
“If we are really sincere about growing and transforming the capital market in Ghana, we must not pay lip service to the need to practice good corporate governance but we must commit to an avowed adherence to best practice in corporate governance throughout the securities industry,” he stated.
According to Rev. Ogbarmey Tetteh, SEC is “going to strengthen its sanctions regime and introduce measures such as failure to supervise and barring of directors/officers”.
The Finance Ministry and the Bank of Ghana have so far accelerated moves to deepen banking regulations by weighing heavy on weak banks in the system.
Finance Minister, Ken Ofori Attah charged industry players in the capital market to ensure they do abide by regulations to ensure sanity in the financial market.
“Our decisions have saved some jobs and secured depositors. We must have a total clean up as we exit the IMF. The capital market must be wary against directors and officials who break laws and regulations,” he stated.
On his part, the President of the Ghana Securities Industries Association, Emmanuel Alex Asiedu said investors should be willing to diversify their investments
“I always advise against investors putting all their eggs in one basket, if you are an investor and you had all your money in one of the banks that has collapsed, you end up losing all your investments, so it is important for investors to diversify their investment by entering into the capital market.”
The 2018 Capital Market Week was themed, the role of good corporate governance in the transformation of Ghana's Capital Market. The 3-day forum ends on Friday, August 26.
It brought together significant stakeholders from the industry including Policymakers, Investors and Research analysts who explored innovative ways of deepening corporate governance in the capital market.
The conference also highlighted the arising opportunities in Capital Market of Ghana after the significant merger of International Finance Corporation and Ghana Stock Exchange.
Speakers also identified challenges such as lack of laws and regulations pertaining to the commodity exchange; inadequate financial support; lack of trading infrastructure; inadequate volume; liquidity problem; smallholder farms; lack of understanding of trading instruments; breach of regulations among others.
Meanwhile, the Securities and Exchange Commission (SEC) has constituted a special monitoring team for all firms to abide by regulations regarding being enlisted on the Ghana Stock Exchange (GSE).
Some finance houses have been given till the end of December 2018 to get things in order or risk getting delisted.
At the end of the third quarter of 2018, the industry’s assets under Management was over GH₵40 billion, which is about 20% of the total GDP, whiles stock market capitalization stood at GH₵66 billion.