SEC cautions public against products with specified returns

The Securities and Exchange Commission (SEC) has warned the investing public not to patronise investment products that guarantee specified returns.

Speaking at the launch of two investment products from the First Finance Company (FFC) last Wednesday, the Director General of SEC, Rev. Daniel Ogbarmey Tetteh, said promising guaranteed returns was against the directives of the commission, and therefore called on the public to report such fund managers.

“It is important for investors to note that licensed fund managers are not supposed to sell guaranteed products or products that promise a specified return over a specified period of time.
“The investing public is, therefore, encouraged to alert the commission if they encounter any licensed fund manager flouting this directive,” he stated.

Rev. Ogbarmey Tetteh also pointed out that fund managers owed it as a duty to explain clearly to their clients what underlined instruments they were investing in, the risk return characteristics and their strategy for liquidity.

“In the case of collective investment schemes, prospective investors must be made to read the particulars before signing,” he said.

Strengthening the financial sector

He said the regulators in the financial sector were resolved to deal with the challenges in the financial sector.

“Over the last few years we have seen some challenges that emerged within the financial sector, including the securities industry and these challenges would help to strengthen and make us better.

“The regulators in the financial sector are resolved to do what it takes to ensure a stronger financial intermediation, and the good news is that there is more collaboration among the four regulators now,” he noted.

“There is more information sharing and we will take care of any potential regulatory lapses. There is the need for us to collaborate to shore up investor confidence within the financial space,” he added.

He, therefore, called on all stakeholders in the industry to support the regulators to deliver a vibrant and resilient industry that would provide the much needed short-term and long-term capital to move the wheels of economic growth.

Launch of two funds

The two funds launched are the Financial Independence Fund and the Elite Mutual Fund.

The Financial Independence Fund is an emergency fund which aims at investing in high quality investment grade fixed income securities that will provide security and liquidity for investors in emergencies while the Elite Mutual Fund on the other hand is a dual retirement and educational fund that will invest in a combination of equities and fixed income securities.

Speaking at the launch, the Chief Executive Officer of First Finance Company, Mrs Gloria Akoto, said the objective of the funds was to provide growth in the medium to long term and to ensure that investors had a comfortable retirement and also had adequately prepared towards their children’s college education.

She said the two funds would want to raise a total subscription of GH¢400,000 between September 25, and October 16 2019.

She said the financial independence fund had an initial minimum subscription of GH¢200, and thereafter a minimum of GH¢100 to top up, while the elite fund on the other hand had an initial minimum subscription and top up of GH¢100.