Business News of Thursday, 18 October 2018
The Securities and Exchange Commission (SEC) has settled on a new minimum capital requirement for the various capital market players.
The decision was reached after an extensive engagement with all the stakeholders in the insurance industry.
According to the Commission, the move is to help improve the financial status of all the various category of players in the capital market.
This would also ensure that these firms are able to absorb the expected shocks that could hit the capital market and investment of customers.
There are currently about 11 categories of licenses for the various players in the capital market. These include Fund managers, Broker-Dealers, Custodians, Depositories, Investment advisors, Issuing Houses, Trustees, Mutual Funds, Unit Trust, Primary Dealers, Registrars.
However, unlike the banking sector and insurance, there would be different categories of capital requirement for each licensee.
For instance, Fund managers are currently required to have a minimum capital requirement of ¢100,000 however, this is expected to be increased to ¢2.5 million.
According to SEC, that announcement would be made later this year after it finalizes arrangement with the Attorney General’s department on reviewing the necessary laws to back the proposed capital review.
It would also be finalising the new capital levels with the Finance Minister Ken Ofori Atta before that announcement is made.
Sources tell Joy Business the various players could be given up to one year to meet the new requirement.
The Director General of the Commission, Reverend Daniel Ogbarmey Tetteh told Joy Business they are also looking at allowing these firms to recapitalise based on their risk.