SEC's new bill to establish Investor Compensation Fund-Acting D-G

The Securities and Exchange Commission (SEC) is developing a new bill that will establish an Investor Compensation Fund to provide financial protection for investors in Ghana’s capital market.

Acting Director-General of the SEC, James Kludze Avedzi, disclosed the initiative during a public engagement in Koforidua, part of the Commission’s nationwide investor education campaign aimed at promoting financial literacy and confidence in the capital market.

According to Mr. Avedzi, the proposed fund will serve as a safety cushion for investors who may lose their investments due to circumstances beyond their control, even under strict regulatory oversight.

“The new bill we are working on is making provision for the creation of a fund we call the Investor Compensation Fund,” he explained.
“That fund will be there in case that despite all the regulations, monitoring, and supervision, something goes wrong in a particular company and the investors lose money. Some amount can be given back to them to cushion them.”

He emphasized that this mechanism would further enhance investor protection, complementing SEC’s regulatory and supervisory measures.

The SEC’s campaign, themed around financial literacy and capital market awareness, seeks to educate the public on how the sector mobilizes long-term capital for economic growth.

Mr. Avedzi cautioned Ghanaians against the growing number of fraudulent online investment schemes exploiting digital platforms.

He urged the public to verify the legitimacy of all investment firms with the SEC before committing funds, stressing that unlicensed operators expose investors to significant risk.

Mr. Avedzi reiterated the Commission’s commitment to strict regulatory enforcement, noting that firms that breach SEC rules risk license suspension and public disclosure.

He also clarified that fund managers are prohibited from guaranteeing fixed returns, as such practices mislead investors and violate capital market regulations.