The government of Ghana would spend about GHS1.5 billion of taxpayers’ money in cleaning up the Fund Management sector following the revocation of the licences of 53 asset management companies by the Securities and Exchange Commission, Finance Minister Ken Ofori-Atta has revealed to Parliament in his 2020 budget.
According to him, “Over the past two years, the management of the Securities and Exchange Commission has worked on various reforms and appraised the state of operators in the industry. In line with the powers vested in the Commission under Act 929 sections 3 and 122, the Commission revoked the licenses of 53 fund management companies on Friday, 8 November 2019”.
“Of these firms, 21 had ceased operations, with the remaining 32 in various states of distress and/or regulatory non-compliance before the revocations”, he told Parliament on Wednesday, 13 November 2019.
Through this “firm and decisive intervention”, he said, “The Commission will preserve the investments of over 77,000 retail investors and over 4,700 institutional investors”.
“The investment portfolios of the affected firms amounted to GHS8 billion, of which GHS2.4 billion (30%) was invested in treasury bills, banks and listed equities”, noting that: “The actions affected 249 licensed representatives”.
“This exercise seeks to protect investors, restore transparency and introduce greater accountability while instilling higher ethical standards through improvement of the licensing and supervisory framework”, the minister added.