Our Regulator for today is the Securities and Exchange Commission (“SEC”). The SEC is governed by the Securities Industry Act 2016 (Act 929) and the Foreign Exchange Act 2006 (Act 723)(the “Acts”) and it is responsible for regulating the Securities Industry in Ghana.
The entities that are regulated by SEC are as follows:
- Financial institutions dealing in securities (i.e Banks and non banking financial institutions, Issuing houses and Underwriters)
- Fund Managers ( i.e Mutual funds,Hedge funds, Private equity funds and venture capital funds)
- Securities Exchangecompanies;
- Credit Rating Agencies;
- Broker-Dealers;
- Investment Advisory Firms (i.e stock brokers)
- Securities Depositories;
- Registrars of company shares and bond holders;
- Trustees; and
- Financial Asset Custodians.
The SEC is mandated by the Acts to register and licence the above industries and a person cannot commence business in the securities industry unless that person has acquired the requisite licence from the SEC. Also a person cannot act as a representative for the entities above unless that person is the holder of a relevant representative’s licence issued under the Acts.
The licence is valid for one year and is renewable on a yearly basis and failure to obtain a licence from the SEC before commencing business is an offence punishable by an administrative penalty of at most GHS 54,000.
It is important to note that a public company, closed-end collective investment scheme, statutory body, local government authority and any other organisation that issues securities to the public must register its securities with the Commission on terms and conditions prescribed by the Commission.
