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The Ghana Securities Industries Association (GSIA) says the Ministry of Finance, Securities and Exchange Commission (SEC) and the Bank of Ghana (BoG) must urgently support the investment industry.
GSIA says the Securities and Exchange Commission (SEC) and the Bank of Ghana (BoG) must push the Receivers of failed Savings and Loans (S&Ls), Finance Houses and Microfinance firms (MFIs) to pay liabilities to Fund Management firms with validated exposures.
According to the GSIA, “Poor governance and ethics played a part in this industry’s current challenges but the banking sector clean-up was the final trigger causing the liquidity challenges that some firms face. Piecemeal pay-outs for validated exposures exacerbate these liquidity challenges and given that pronouncements have been made that no depositors will lose their funds, it is important that validated claims by Fund Managers are immediately honoured.”
A statement from the Association on Monday said, “The SEC must provide clarity on the path forward for investors whose monies were with collapsed firms. This will reduce investor panic and help to forestall a run on the industry. There must also be a clearly spelt out process for firms whose licences have been revoked and who feel they may have a genuine case for review.”
The statement added that GSIA will engage with all key stakeholders to promote a healthy and vibrant industry that creates wealth for all.
No need to panic
The Ghana Securities Industries Association says there is no for panic withdrawals by investors. “The industry is no worse off today than it was before the action by the SEC. Twenty-one of the firms whose licences had been revoked were already not operational and several of the 32 who were operating were already facing serious governance, operational and liquidity challenges.
There are several robust fund management firms that are liquid and operating with healthy balance sheets and we are confident that these will continue providing solid services to the investing public.”
The Securities and Exchange Commission (SEC) last Friday revoked the licences of 53 fund management companies. The action was meant to protect investor interest and the integrity of the capital market.
The investment industry is the understated complement to the banking sector. Its average growth – 69.5% per annum over the past decade and its size – GH¢40 billion are clear pointers to its importance to the broader Ghanaian economy.
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