Business News of Tuesday, 12 November 2019
Source: citinewsroom.com
2019-11-12
Chief Operating Officer of Dalex Finance, Joe Jackson
The Chief Operating Officer of Dalex Finance, Joe Jackson, says most of the 53 Fund Management Companies whose licenses have been revoked by the Securities and Exchange Commission (SEC) were operating illegally.
He says companies operating under SEC are not required by law to promise returns on investments, but many of them flouted the rules.
Speaking on the Citi Breakfast Show, Mr Jackson said that fund management companies are not allowed to take on high-risk ventures in order to protect investors.
“A lot of the SEC-regulated companies were actually engaged in illegality because they were promising returns which means they were taking risks themselves and they didn’t have the shock absorbers to do so…They were not banks. They were not Finance Houses. They were not savings and loans firms.”
The SEC revoked the licenses of the 53 Fund Management Companies in line with Section 122 (2) (b) of the Securities Industry Act, 2019 (Act 929).
It said the companies largely failed to return client funds which remain locked up.
In a number of cases, the firms had even folded up their operations.
“Essentially, they have failed to perform their functions efficiently, honestly and fairly and in some cases are in continuing breach of the requirements under relevant securities laws, rules or conditions, despite opportunities provided to them by the SEC within a reasonable period of time to resolve all regulatory breaches.”
This was the latest leg in the financial sector clean-up, commenced by the Akufo-Addo administration in August 2017.
It has led to the collapse of nine universal banks, 347 microfinance companies, 39 microcredit companies or money lenders, 15 savings and loans companies, eight finance house companies, and two non-bank financial institutions.
