Ghana’s Securities and Exchange Commission to shut down some more investment banks

The Deputy Director-General Securities and Exchange Commission (SEC), Paul Ababio, has said that they will soon revoke licences of some investment banks in the country after it completes an ongoing forensic audit of some 21 investment companies.

Deputy Director General of Securities and Exchange Commission, Paul Ababio

Speaking to The Finder newspaper, Paul Ababio said that SEC is currently assessing the risk exposure levels of the 21 firms through a third party. The role of the third party is to verify their assets and ascertain their interconnectedness to other players in the financial sector.

“We had some complaints from the market about certain investment firms. What are we doing is to assess the level of exposure that the firms have; the level of risks in those businesses and then coming out of that, we will have a better understanding of the status of their operations?”

“In our regular inspections, we get an appreciation of the state of these firms, but sometimes you need a third party to come in to verify where the assets are, and like how we talked about the interconnectedness. You get a better appreciation on actions you can take coming out of that,” he added.

Mr Ababio also said that the commission will decide to either shut down insolvent firms or provide support for those that are in good standing after the reports

“It is highly likely we will see some revocation of licences. Some firms have actually surrendered their licences but we will take actions. Some will involve revocation some will involve suspension. But some will also involve restructuring,” he noted.

“We will obviously take a decision; some firms may have to be wind up. Other firms may be recoverable so if the portfolio is in good standing and can recover from where their positions are, we will ask them for a roadmap on how to address the challenges they face and how to also address investor concerns, and we hope that coming out of this certain significant actions will be taken to resolve some the challenges in the industry,” he explained.

This will not be the first time the SEC will revoke the licences of some investment companies. In April 2019 SEC revoked the licences of some five investment companies; namely, Georgetown Capital Partners Ltd, Equity Capital Ltd, Index Analytics Ltd, DM Capital Ltd, and Oxygen Advisory Ltd. In pursuant to Section 122 of the Securities Industry Act, 2016 (Act 929).

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