SEC issues new capital guidelines for all market players

• Fund managers to raise GH¢2m minimum capital
• Broker-dealers require GH¢1.5m
• Trustees require GH¢50m

The Securities and Exchange Commission (SEC) has issued a comprehensive set of new capital requirements for all market operators in Ghana’s fast growing capital market with a December 31, 2021 deadline for existing players but new entrants are expected to provide the new capital before a licence is issued.

The new directives see the regulator issue specific capital requirements, for each segment of the market including broker-dealers, clearing houses, credit rating agencies, custodians, fund managers, corporate and individual investment advisors, issuing houses, margin traders, market makers, nominees, primary dealers, registrars, security depositories, exchanges, trustees, and underwriters.

The segment with the highest members, fund managers are required to raise at least GH¢2million; broker-dealers are directed to raise GH¢1.5million; clearing houses, custodians, GH¢50million; corporate investment advisors, GH¢1million; individual corporate advisors, GH¢200,000; issuing houses, GH¢1million, securities depository, GH¢50million; securities exchange, GH¢10million; and primary dealers, mainly banks, GH¢400million.

A statement from the commission explained that the new directive is in accordance with Section 209 of the Securities Industry Act 2016, (Act 929), which is in line with the commission’s mandate of regulating and promoting the growth and development of an efficient, fair and transparent securities market in which investors and the integrity of the market are protected.

Director General of the Securities and Exchange Commission, Reverend Daniel Ogbarmey Tetteh speaking at the Annual General Meeting (AGM) of the Ghana Securities Industry Association (GSIA) in Accra remarked that the “new minimum capital requirements for market operators were expected to be in force by end of next year therefore existing market operators would be expected to be fully compliant by 31st December 2021 while new entrants would be required to meet the new requirements immediately.”

Reverend Ogbarmey further noted that the new capital requirements contained in the just released licensing requirements guidelines for market operators should come as no surprise to the market as the new capital thresholds had been discussed extensively with market operators in the capital market industry.

In addition to the new licensing guidelines, the Securities and Exchange Commission has also issued other guidelines to steer the operations and activities of market operators. These include Conduct of Business Guidelines, Regulatory Sandbox Licensing Guidelines and Corporate Governance Code for listed companies.

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