SEC to Increase Minimum Capital Requirement

The minimum capital requirement for operators in Ghana’s capital market will soon be reviewed upward, the director general of the Securities and Exchange Commission Rev. Daniel Ogbamey Tetteh has hinted.

He, however, failed to mention the margin of increase but noted it will be “significant”.

The Commission will soon notify market operators about the proposal to have the minimum capital increased, he said at a seminar to mark World Investor Day 2017 Thursday.

“There is a procedure we have to follow before we announce the capital requirement that we are going to propose.

Basically, we’ll get to the market with what our proposals are based on our understanding of what capital is required by the different market operators to be able to operate effectively in the capital market. After we propose it to the market, we’ll take their feedback and then we make a determination as to the new levels,” Rev Ogbamey explained.

Presently, brokerage firms are required to have a capital base of GHC 1m, while, Fund management companies have a capital requirement of GHC 100,000. The immediate past Vice President of investment bank, Databank, Rev Ogbamey Tetteh told Starr Business the aim of the review is to ensure that operators in the local capital market are adequately resourced.

“Clearly, without a solid financial background or without the necessary capital base, you find it difficult to be effective as a capital market operator. Our vision is to have a capital market that has very strong operators both in terms of human capital and financial capital,” clarified the SEC boss.

Ghana and other countries in the sub-region are yet to fully develop their capital markets unlike countries in other parts of the world. It is largely believed that a developed capital market is the surest way to raise relatively cheaper long-term capital to for infrastructural development of every country.

Source: Starrfmonline