SEC in talks to improve liquidity among fund and asset managers

The Securities and Exchange Commission has stated that it is in talks with stakeholders in the securities market to boost liquidity in that sector.

SEC in a statement issued today said it is committed to regulating and promoting the growth and development of an efficient, fair and transparent securities market in which both investors and the integrity of the market are protected.

“We are aware of some level of anxiety among a section of investors because of the recent reforms taking place within the financial system. We wish to reiterate that the objective is to produce sound market operators, stronger financial intermediation and financial inclusion and ultimately a more robust financial sector.

We are also aware that certain investors are unable to access their matured investments from some of our licensed Asset Management Companies (AMCs) or Fund Managers (FMs) due to some liquidity challenges,” the statement said.

According to SEC, it has instructed all AMCs/FMs to put in place mechanisms to meet their obligations as they fall due to their clients, consistent with the terms and conditions of the investment contracts signed with them.

The Commission further urged dissatisfied customers of these AMCs/FMs to lodge written complaints with the Commission.

“The Commission is engaging with stakeholders on efforts to improve liquidity in the industry. The Commission has and continues to introduce regulatory measures to help ensure a stable, efficient, transparent and fair marketplace where investors’ funds are protected,” the statement read.

Some of these measures the Commission revealed include:

  • Holding AMCs/FMs accountable for honoring their obligations to their clients
  • The 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,
  • Stringent licensing requirements,
  • Investment guidelines including restrictions on related party investments/guaranteed investments and
  • Streamlining of the Commission’s internal processes including through automation of processes to promote efficiency.

“Once again, we wish to reiterate that there is no need for panic withdrawals as the Commission is committed to ensuring a sound, efficient and robust market where investors’ funds are protected.

There are well-run and sound licensed AMCs/FMs and investors can confirm by asking a few questions regarding their governance practices, their track record, staff turnover, any unresolved complaints and regulatory breaches,” the statement concluded.

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