Mr. Kojo Addae-Mensah, the CEO of Databank Group, has stated that the Security and Exchange Commission (SEC) is under-resourced and poses a systematic and structural risk to the development of Ghana’s young capital market. He therefore, calls on the government of Ghana to come to the aid of the commission.
According to Mr Adae-Mensah, despite the Security and Exchange Commission’s recent market actions to create general awareness about its core mandate and capital market activities, the lack of human and financial resources to drive these awareness campaigns down to the people could render a well thought-through exercise delivered unsatisfactorily. So, he is of the view that the government must hurry to the aid of SEC so that it can carry out its duties effectively.
“There must be more central government support. It is still a young regulator, and they are generating funds from the industry players but that is not enough. For now, they really need a lot of government support to resource them with the appropriate technology and the appropriate resources to be able to do what they are supposed to do.”
Mr. Kojo Addae-Mensah
Highlighting the importance of the Exchange Commission, the CEO averred that the capital market does hold a critical key to raising capital by government, public and private institutions for growth and expansion and therefore a “well-resourced SEC could not only bolster investor confidence but offer big assurances to all economic actors that the capital being raised are done right and deployed for the purposes they are raised for.”
Meanwhile, reacting to the view that SEC as an institution can generate its own revenue to undertake its activities, he pointed out that the Security and Exchange Commission currently does not have the capacity to self-finance.
“Right now, they [SEC] are supposed to be self-financing but I do not think they are as liquid as even the Central bank is. Now, the Central Bank is scattered across the country; yet still, their supervision is challenged, let alone the SEC, which is located only in Accra and has less staff than Databank”.
Mr Kojo Addae Mensah
However, Mr Adae suggested that for SEC to be effective, there is the need to do away with the current structure which has only one office in Accra with a handful of employees and replace it with a new one.
“They (SEC) just cannot deal with this current structure; the structure has to change; the funding has to change so that they can be as effective as they want to. You can see they want to be effective. They have issued this, they have done that, they have engaged but it is so difficult.”
Mr Kojo Addae-Mensah
Addressing some of the challenges faced by SEC, he noted that, even to be a licenced person to work in our industry [investment industry], you need to go through a course. He added that, until 2021, that course was delivered physically only. And since SEC’s only office is in Accra, it is always difficult to obtain licence especially if you are from the northern part of the country.
SEC regulates some 232 institutions such as fund managers or investment banks, investment advisory firms, mutual funds, issuing houses, depositories, custodians, trustees, unit trusts and security exchanges.
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