Professionals In Ghana's Financial Services Sector Must Not Be Allowed To Neglect Their Fiduciary Duties To Investors

It is such a pity that bad loans (euphemistically labeled 'non-performing assets' by the financial services sector globally) have dragged down two indigenous banks built up over the years by creative and dynamic Ghanaian entrepreneurs.

We must thank Providence that we presently have two world-class professionals in place as finance minister and central bank governor (ditto a government comfortable in its own skin now in power). One shudders to think how this financial equivalent of an earth tremor  would have played out had the previous multi-spin-doctor-driven propaganda-loving regime  been in power.

As it happens, both appointees coordinating aspects of the present government's economic policies had enough confidence to agree to the central bank taking the bold measures it took  to save the good bits of UT Bank and Capital Bank that have been handed over to GCB Bank - something that  clearly has saved Ghana's financial system from disruptive chaos.

Furthermore, the collapse of UT Bank in particular,  does not reflect well on the sundry professionals who work with stock brokerage firms and the Ghana Stock Exchange (GSE) - on which UT Bank was listed. Have they been asleep all this while? Ebeeii.

Neither does it reflect well on the vampires who organise banking industry awards - which have now been exposed as  mostly worthless: in as far as their credibility goes. The question there is: What precisely are the criteria on which those apparently mostly smoke-and-mirrors, Alice-in-wonderland-awards based?  How come Capital Bank was an award winner too? Amazing.

In light of the apparent 'systemic failure' at the GSE  (to quote an old wag I know who is prone to exaggeration)  - exacerbated no doubt by the unprofessionalism of some of the professionals who work with the local bourse - exposed by the collapse of UT Bank, we are posting a series of articles from Investopedia, for the benefit of our many readers.

Hopefully, it will also remind analysts of stock brokerage firms (ditto the GSE) in Ghana's financial services sector - many of whom could indeed be sued by some of their high net worth  clients for neglecting their fiducry duties to their clientele - what best practice elsewhere is like and entails.

Please read on:


''Investopedia

Form 13F
'What is the 'SEC Form 13F'

The SEC Form 13F is a filing with the Securities and Exchange Commission (SEC) also known as the Information Required of Institutional Investment Managers Form. It is a quarterly filing required of institutional investment managers with over $100 million in qualifying assets. Companies required to file SEC Form 13F may include insurance companies, banks, pension funds, investment advisers and broker-dealers.

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BREAKING DOWN 'SEC Form 13F'

SEC Form 13F, which must be filed within 45 days of the end of each quarter, contains information about the investment manager and potentially a list of their recent investment holdings. The form was made famous by investment con artist Bernie Madoff. It provides investors with an inside look at the holdings of Wall Street's largest investment managers. While this form can provide valuable insight into the management style of some of Wall Street's best portfolio chiefs , history has proven that these forms are only truly useful to investors when the investment manager reports accurately and honestly.
Hedge Funds and 13F Forms

Institutional investors have become more prolific in the past six decades. In 1950, equity ownership among institutions represented about 8% of the total U.S. market capitalization. That percentage increased dramatically in the following 60 years. By 2010 it was estimated that 67% of all domestic stocks were controlled by institutions.

Hedge funds rose to prominence with index-busting returns that tapered off beginning with the bull run starting in 2009 after the financial meltdown. Many individual investors, attempting to replicate the strategies of iconic money managers such as Paul Tudor Jones and George Soros, peer inside 13F filings for insight into the purchase and sales of securities transacted by the pros. The Tudor Investment Corporation is captained by Jones and its portfolio holds about 1,300 stocks. In its May 16, 2016, 13F filing, Tudor’s holdings included Allergan and Starwood Hotels and Resorts Worldwide Inc. among its top-10 positions.
13F Reliability

Some investors, and even the Securities and Exchange Commission (SEC) itself, question the quality and integrity of 13F filings. In a 2010 investigation, the SEC’S findings regarding 13F reporting requirements revealed concerns around three major issues. The first finding offered that no SEC division assumed any authority to scrutinize 13F’s in general. The second conclusion stated that no SEC office analyzes 13F’s content for “accuracy and completeness. Lastly, the SEC found that the Electronic Data Gathering, Analysis and Retrieval (EDGAR) system possessed no internal checks used to monitor the filings of 13Fs.
SEC Form 10
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A filing with the Securities and Exchange Commission (SEC), also known as the General Form for Registration of Securities. It is used to register a variety of securities for trading on U.S. exchanges. Information on SEC Form 10 includes the type and amount of security being issued, the financial information of the issuer, and any potential conflicts of interest that may exist. In addition to using this form for standard registration of securities, it can be used for accelerated and small business filings.
BREAKING DOWN 'SEC Form 10'

SEC Form 10 is one of the most basic sources of information about a publicly traded security. Everyone from private investors to Wall Street analysts use a company's SEC Form 10 to gather the information needed to make investment decisions. The company's financial statements are of particular interest, especially for companies who have not previously issued other securities. Additionally, SEC Form 10 contains management's perspective on potential risks and opportunities facing their company.

Related Forms: SEC Form 10-12B, 10-12B/A, 10-12G, 10-12G/A
Securities And Exchange Commission - SEC
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The U.S. Securities and Exchange Commission (SEC) is an independent, federal government agency responsible for protecting investors, maintaining fair and orderly functioning of securities markets, and facilitating capital formation. It was created by Congress in 1934 as the first federal regulator of securities markets. The SEC promotes full public disclosure, protects investors against fraudulent and manipulative practices in the market, and monitors corporate takeover actions in the United States.

Generally, issues of securities offered in interstate commerce, through the mail or on the Internet, must be registered with the SEC before they can be sold to investors. Financial services firms, such as broker-dealers, advisory firms and asset managers, as well as their professional representatives, must also register with the SEC to conduct business.
BREAKING DOWN 'Securities And Exchange Commission - SEC'

The SEC's primary function is to oversee organizations and individuals in the securities markets, including securities exchanges, brokerage firms, dealers, investment advisors and various investment funds. Through established securities rules and regulations, the SEC promotes disclosure and sharing of market-related information, fair dealing and protection against fraud. It provides investors with access to registration statements, periodic financial reports and other securities forms through its comprehensive electronic, data gathering, analysis and retrieval (EDGAR) database.
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End of culled articles from Investopedia.