The Director of the General Securities and Exchanges Commission says the Commission intends to introduce an Investor Protection Fund to provide some minimum protection for investors in the wake of the Debt Exchange Programme.
Rev. Daniel Ogbarmey Tetteh said the Fidelity Fund which is currently in place is reserved for stock market players and activity, and thus the Investor Protection Fund will act as a broad based investment fund to provide minimum protection for those in the asset management industry.
“…and I’m stressing minimum because in fact, there’s nowhere that as far as I’m aware, where investor funds fully indemnify investors. The idea is to provide some minimum protection,” he said on JoyNews’ PM Express Business Edition.
Currently, he said the Commission; with the help of a consultant is properly structuring the fund and mobilising funds to help support asset management businesses that may be affected by the DDEP.
“So we are at the stage in terms of doing that background work, to set it up and then to look at how to attract funds into it,” he said.
He is hopeful that by the end of this year, “we should have completed the process of you know, having a setup and then we can look at, you know, how, you know, it will be funded in the way that it will serve the purpose.”
He, however, expressed caution that if the fund is not designed properly, it could lead to unintended consequences thus justifying the delay in structuring.
“And I’m saying this because if we don’t design it properly, it can also have as they say the unintended consequence of people not being disciplined in their investment, or people being, excuse me to say, reckless because they have the notion that there is some big brother somewhere that will bail me out, you know.
“So you need to achieve a fine balance of designing the Investor Protection Fund in such a way to elicit some confidence in investors without the moral hazard of people, you know, not making investments in line with their risk tolerance,” he said.