Business News of Wednesday, 13 November 2019
The Ghana Securities Industry Association (GSIA) has assured the investing public of the ability of the existing fund management companies to serve their needs and protect their investments.
This comes days after the revocation of licences of 53 fund management firms by the Securities and Exchange (SEC) for various contraventions of the law.
A statement signed by the Executive Secretary of the association, Marian Dsane, on behalf of its Governing Council, stated: “There is no need for panic withdrawals by investors. The industry is no worse off today than it was before the action by the SEC.
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,” it added.
It further explained that prior to the revocation, 21 of the affected firms were already out of business while others that were operational were facing serious operational, governance and liquidity challenges.
The Association also called on the Ministry of Finance (MOF), SEC and Bank of Ghana (BOG) to urgently support the investment industry by pushing 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 them, poor governance and ethics played a part in the industry’s current woes, however, the banking sector clean-up was the “final trigger causing the liquidity challenges that some firms face.”
“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 There must also be a clearly spelt out process for firms whose licences have been revoked and who feel they may have a genuine case for review,” the statement added.