Rev. Daniel Ogbarmey Tetteh Director-General of Securities and Exchange Commission (SEC)

The Securities and Exchange Commission (SEC) has restored the licenses of some fund management firms that applied for a review of decision but rejected others.

This was after the commission established an Administrative Hearing Committee (AHC) to look into these cases and the firms that want their license revocation re-considered.

Background

On November 8, 2019, SEC revoked the licenses of some 53 fund management firms due to liquidity and regulatory breaches. It added that the affected companies failed to return clients’ funds, which remained locked up in contravention to the investment rules.

The Commission added that these firms also failed to perform functions efficiently, honestly and fairly and in some cases are in continuing breach of the requirements under relevant securities laws.

Outcome of Administrative Hearing Committee

According to the Securities and Exchange Commission, following the revocation of the licenses, some of the 53 have exercised their right under Section 19 (3) of Act 929 and appealed to the Commission’s AHC for re-consideration of the decision.

The committee, having considered the appeals and based on new evidence available to it, decided as restore the licenses some firms, extend some, while sustaining the rest in terms of sanctions

License restoration to some firms

From the notice from the Securities and Exchange Commission these are the list of firms that had their license restored, some sanctions commuted to 6 months, while others had sanction sustained.   

COMPANY                                          Decision

1. Monarch Capital                –       License Restored

2. Integrity Fund Management – Revocation Commuted to 6 months  

3. Legacy Fund Management      Revocation Commuted to 6 months

4. Kron Capital Limited      –       Revocation sustained

5. KRIPA Capital Limited          –         Revocation sustained

6.  Frontline Capital Limited   –  Revocation Sustained

7.  Intermarket Asset Management Ltd (Formerly CDH Asset Mgt Ltd.)                               – Revocation sustained

8. Blackshield Capital Mgt Ltd.(Formerly Goldcoast Fund Mgt Ltd.) – Revocation sustained

However, not all the firms that had their licenses revoked decided to submit themselves to this administrative hearing as they resorted to the law courts. These companies include; FirstBanc Financial Services Limited, Apex Capital Limited and Omega Capital Limited

Payment of validated claims

The Securities and Exchange Commission (SEC) in a recent interview with JoyBusiness noted that it will be able to decide on the payment schedule for customers of defunct fund management firms by the end of June 2020.

According to the Commission, it is in the process of finalising the validation process of affected investors. This would influence how the payment would be carried out. 

Director-General of SEC, Rev Daniel Ogbarmey Tetteh noted that “what we have done, firstly, is to get the liquidation process to start and that means that the official liquidator that the Registrar General is in court.

“We can’t tell when that process will terminate because it’s an issue of the court process so that is in the works,” the Director-General explained to JoyNews June 9, 2020.