- The Securities and Exchange Commission has revoked the licences of 53 Fund Management Companies.
- SEC explained that some customers of the closed Fund Management Companies have not received their funds.
- The SEC explained that some of these companies have folded up without paying their clients what is due them.
The Securities and Exchange Commission (SEC) has revoked the licenses of 53 Fund Management Companies.
In a statement, SEC said that the revocation comes after the companies failed to “return client funds which remain locked up and in a number of cases, have 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. The SEC has concluded after extensive engagement with these institutions that their continuous existence in the light of their conduct poses severe risks to the stability of the capital market and to the interests of investors,” the statement indicated.
The SEC revoked the licences pursuant to Section 122 (2) (b) of the Securities Industry Act, 2019 (Act 929) which empowers them to revoke the license of a market operator under some circumstances.
It further indicated that the revocation is “in accordance with its mandate of protecting investors and the integrity of the capital market.”
SEC and its authorized agents are expected to secure the premises of the affected companies for further investigations under section 26 of the Act.
“In addition, the SEC has notified the Registrar of Companies of the revocation of these licenses and has requested that the Registrar petitions the High Court to commence winding-up proceedings against these companies under the Bodies Corporate (Official Liquidations) Act, 1963 (Act 180).”
The revocation of licences by the SEC is coming after the Bank of Ghana embarked on a similar exercise which saw a number of banks, microfinance companies, and Savings and Loans companies closed down over the last two years.
The financial sector clean-up was started in August 2017. This has led to the collapse of nine universal banks, 347 microfinance companies, 39 microcredit companies or money lenders, 15 savings and loans companies, 8 finance house companies, and two non-bank financial institutions.