Deputy Director of the Securities and Exchange Commission (SEC), Paul Ababio, has disclosed that the Commission has begun drafting new guidelines on third party and related transactions.
Speaking at the Tesah Capital Webinar, Mr. Ababio further revealed that, the vulnerabilities inherent in corporate governance prompted the financial sector clean up. As such, the Commission took the precautionary measure of introducing the guidelines.
According to him, the process will help avoid misuse and misappropriation of investments funds by fund management firms.
The third party and related transactions was the major cause of collapse of fund management firms, forcing the clean-up of the securities industry.
“What we learnt from the sector clean-up was that there was corporate governance weakness. Due to that we have introduced a conduct of business guidelines in which we require market operators to issue annual reports.
“We also found that there were related transactions that were not done transparently. So, we’re working on introducing investment guidelines for fund managers”.Paul Ababio
Furthermore, he explained that the Commission has equally digitized its operations by providing prompt services.
“We’ve also digitized the submission of reports, and this allows for real time inspections by the regulator and for us to address confrontational issues as and when we identify them”.
Investors warned against abnormal investments
The Bank of Ghana embarked on the clean-up exercise of the financial sector due to the severe challenges.
These challenges include solvency, liquidity and asset quality that plagued the sector. This crack down on the financial sector saw the exit of many financial institutions, the collapse and merging of others.
That notwithstanding, a Senior Lecturer at the University of Ghana Business School, Dr. Elikplimi Komla Agbloyor warned Ghanaian investors against abnormal investments with high returns.
He further advised them to be mindful of their need for high returns since their investments can go waste.
“Don’t chase abnormal returns. What returns will we classify abnormal? For example, 10% a month. I think it’s abnormal but currently if you buy Treasury bill instruments, they’re going between 12 and 13%… that’s understandable; that’s not like 120% a year.
“Or if you’re doing the equity market, the average return you could get is probably 20% a year. These are returns that also compensating you for inflation. Beyond that, I think you should be careful”.Dr. Elikplimi Komla Agbloyor
Tesah Capital assures investors of access to accounts
On his part, a board member of Tesah Capital, Dr. Justice Yankson assured investors that his outfit will ensure that clients have unbarred access to their accounts. He further revealed that they will exhibit compliance and judiciousness in its financial transactions.
“We’re going to continue to ensure that at all times, we’re compliant and we are up to date with everything that the regulator requires of us.
“We are running a very open entrance system where each client can at any given time log on and access their account details, reach out to us either virtually or in person for any discussion relating to investment, management of finances and the way forward”.Dr. Justice Yankson