The Securities and Exchange Commission (SEC) has said tough reforms in the capital market are intended to make the industry robust.

Deputy Director of the SEC, Paul Ababio said the reforms – introduced last year – are deliberately structured to ensure that Fund Managers reap the full potential in the capital market.

“These reforms are part of our carrot-and-sticks approach because while we are doing some of these changes, we are also in a process of drafting the Capital Markets Master Plan which will lay out the broad strokes of our expected development in the next ten years and how various players can fit into it,” he said Thursday evening on the business edition of PM Express.


The SEC in 2018 began a campaign to tighten regulations on Fund Management in the country to cover the rapid expansion in the sector.

The reforms were also in response to the increase in market operators over the years.

In the nutshell, the reforms, among other things, emphasised the need for diversification, prudence and good corporate governance to correspond with the growth in the sector.

The Commission has since warned Fund Managers to avoid offering fixed returns to investors. Also, to ensure prudential returns and compliance, SEC has called for timely and accurate information from market operators. SEC says this is critical for effective regulation of the sector.

The Commission also believes that because investors rely heavily on timely and accurate information and, Fund Managers must adopt a policy of proper disclosure of information to investors.

Timely information will further ensure that investors fully comprehend market dynamics and know how their investments are performing to help them make informed decisions.

The reforms also will ensure that related party investments will be reviewed by a board committee and recommended to the board of the fund manager for approval prior to the investment being made.

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The board committee shall be composed of a combination of independent non-executive directors and executive directors – one independent non-executive director shall be appointed as Chairman of the committee.

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The board committee is expected to ensure that they have access to, enough knowledge or expertise to assess the proposed related party investment. The board committee will also obtain appropriate professional and expert advice where necessary from a qualified person.

A director of a Fund Management firm who has an interest in a related party investment being considered for approval will neither be present while the matter is being considered at the meeting nor vote on the matter.

Fund Managers Ghana

Right framework

Speaking on last night’s PM Express that discussed Ghana’s capital market, Mr Ababio also said the reforms are creating avenues for proper fund management, proper governance, and to ensure that firms that have good governance succeed.

“We are putting in place the right task framework to ensure that industries like private equity capital can pick up to ensure that pension funds that are growing now are also management prudently,” said.

The reforms give the Fund Managers in Ghana the ability to even set a robust headquarters in Ghana as they break out into the international market.

“There is potential for the industry and we think that there is a need for the industry to have a strong regulatory environment, but also an enabling macroeconomic environment so that there is no crowding out,” he stated.

Get more from Thursday’s discussion on PM Express in the video below