SEC Shuts Down 53 Fund Management Firms

The Securities and Exchange Commission (SEC) has revoked the operating licenses of 53 fund management firms.

The revocation which took effect from Friday, November 8, was in pursuant to Section 122 (2) (b) of the Securities Industry Act, 2016 (Act 929 or “the Act”).

The Act authorizes SEC to revoke the license of a market operator which it deems not to be performing in conformity with the industry’s best practices and standards, among others.

The SEC announcement said “the revocation of the licences of the specified companies has become necessary as they have largely failed to return client funds, which remain locked up and in a number of cases, they have even folded up their operations.”

“Essentially, they have failed to perform their functions efficiently, honestly and fairly and in some cases are in continuing breach of the requirements under relevant securities laws, rules or conditions, despite opportunities provided to them by the SEC within a reasonable period of time to resolve all regulatory breaches,” it said.

Affected Companies

The companies which have had their licenses revoked are: Alpha Cap Limited, Beige Capital Asset Management Limited, Cambridge Capital Advisors Limited, EM Capital Limited, Energy Investments Limited, Fromfrom Capital Limited, Gold Rock Capital Management Limited, Heritage Securities Limited (formerly Futurepip Asset Management, Kamaag Kapital Limited (formerly Lifeline Asset Management), Kron Capital Limited, Mak Asset Limited, Man Capital Partners Limited, Mcottley Capital Limited, Mec-Ellis Investments (Ghana) Limited, Nickel Keynesbury Limited and SG Royal Kapita Limited.

The rest include Standard Securities Limited (formerly ASN Investments Limited), Tikowire Capital Limited, Ultimate Trust Fund Management Limited, Universal Capital Management Limited and Weston Capital Limited.

The statement also mentioned names of fund managers whose licenses were revoked as well; All time Capital Limited, Apex Capital Partners, Axe Capital Limited (Formerly United Asset Management), Blackshield Capital Management (formerly Gold Coast Fund Management), Brooks Asset Management Limited, Canal Capital Limited, Corporate Hills Investment Limited, Dowjays Investment Limited, Firstbanc Financial Services Limited, Frontline Capital Advisors Limited, Galaxy Capital Limited

Others are; Global Investment Bankers Limited, Goldstreet Fund Management Limited (formerly Goldstreet Investment Limited), Ideal Capital Partners Limited, Intermarket Asset Management Limited (formerly CDH Asset Management), Integrity Fund Management Limited, Kripa Capital Limited, Legacy Fund Management Limited (formerly Legacy Financial Services Limited), Liberty Asset Management Limited  and Monarch Capital Limited.

Also shut down are Mutual Integrity Asset Management Limited, Nesst Capital Limited, Nordea Capital Limited, Omega Capital Limited, Procap Finance Limited, QFS Securities Limited, Sirius Capital Limited, Strategic Hedge Capital Limited, Supreme Trust Capital Limited, Unisecurities Ghana Limited, Utrak Capital Management Limited and Wealth Vision Financial Services Limited

The statement said the authorised agent of SEC (and the Liquidator once appointed) will work together with the government to pay a capped amount to all affected investors of the firms in line with government’s commitment to support the securities industry and to provide some immediate relief to investors who were hurting because of their locked-up funds.

Future Action And Asset Retrieval

According to the statement, the outcome of the court process would inform the handling of assets retrieval and liquidation to further sort out validated investor claims.

It added that “by the close of business on Monday the 11th of November 2019, SEC, together with its authorized agent, will provide further details about the validation process and specific locations, where investors can present their claims to be validated.”

The statement noted that “in the interim we urge all investors to remain calm, gather all receipts, statements and any other documentation related to their investment with the affected institutions.”

“There is also no need for any panic withdrawals on the firms whose licences are intact and not on the revocation list. A list of firms whose licences have not been revoked can be found on the SEC website (www.sec.gov.gh).”

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