The Director General of the Security and Exchange Commission (SEC) Reverend Daniel Ogbarmey Tetteh has said most of the licenced asset management firms have locked up funds because they were exposed to some of the microfinance and savings and loans firms that have run into financial difficulty through counterparty default.
The situation of counterparty default risk is what has impaired the liquidity assets of some fund managers as they invested their money into these firms and were not able to readily redeem their investments with these ailing firms. This affected the cash flow with the fund managers, hence their inability to meet payment obligation of their clients.
The Director General was quick to add that the regulator was in serious talks with the Bank of Ghana (BOG) and the Ministry of Finance to address the situation.
“The BOG and Ministry of Finance have given some indication that they’ll be having some kind of intervention for the distressed microfinance, savings and loans like they did for the banks. The SEC has started engaging with the ministry and BOG in this process so we can assist our license operators who have been affected by counterparty defaults to redeem their locked up funds.”
“Provided our licence operators who are exposed to this distress companies provide solid evidence, submit all documents and can ascertain their claims, when the bailout occurs, they’ll definitely be paid their money”, the SEC boss assured.
The Director-General made this known during an interview on Joy FM’s Super Morning Show where he was asked about fund managers like Gold Coast who are currently facing liquidity challenges and have blamed the situation on counterparty default.