The Securities and Exchange Commission (SEC) has indicated it will introduce stringent licensing requirements for Asset Management Companies (AMCs) and Fund Managers (FMs) as part of ongoing measures to deliver a more robust capital market.
The Commission in a statement, said “SEC is aware of anxiety among a section of investors because of the recent reforms taking place within the financial system”.
The SEC however, explained that the measures including the upcoming stringent licensing regime is to regulate and promote the growth and development of an efficient, fair and transparent securities market in which both investors and the integrity of the market, are protected.
In July, SEC indicated it has identified 21 fund management firms operating in the capital market as at a stage of bankruptcy with further investigations being carried out.
Meanwhile, on the SEC’s website, about 46 fund management firms out of the 128 being regulated by the Commission, are currently having major regulatory issues.
But the commission noted that holding AMCs/FMs accountable for honoring their obligations to their clients, introduction and enforcement of corporate governance guidelines for operators in the industry including AMCs/FMs, higher minimum capital/liquidity requirements for AMCs/FMs and other operators, introducing investment guidelines including restrictions on related party investments/guaranteed investments, streamlining the Commission’s internal processes including through automation of processes to promote efficiency and stringent licensing requirements will produce sound market operators, stronger financial intermediation and financial inclusion.
The Commission also noted its awareness of difficulties faced by certain investors as to the inability to access matured investments from some licensed Asset Management Companies (AMCs) or Fund Managers (FMs) due to liquidity challenges.
Conversely, the SEC has instructed all AMCs/FMs to put in place mechanisms to meet customer obligations as they fall due to clients, consistent with the terms and conditions of the investment contracts signed with them.
Meanwhile the Commission has also asked dissatisfied customers of these AMCs/FMs to lodge written complaints with the SEC
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