Accra, March 30, GNA - A day's seminar to develop Over-The-Counter (OTC) securities Market in the country has raised pertinent issues, which require some re-definitions and clarifications of the rules and regulations of the Securities Exchange Commission (SEC).

The OTC market, which has existed in Ghana but in a quasi-informal way, involves players in the capital market whose activities are not transparent, non-existent price discovery and transfer of shares or market transaction which are very slow and difficult to assess. Participants, who include brokers and investors asked questions such as; the definition of a public company and which categories of companies should fall under the purview of the SEC; which body to organise the market and what should be the disclosure requirement and reporting standards for the OTC market players.

A major issue was to clearly define the boundary for a private placement of equities or bonds to determine when a private or public company's offer tends to become public placement to justify SEC's intervention.

Giving an overview of the OTC market, Dr Nii Kwaku Sowa, Acting Director General of SEC, said it had an untapped potential that could release the creative and entrepreneurial energy of Ghanaians by providing easy access to capital for start up and existing companies. "This is what makes countries prosper and undergo rapid transformation - such as NASDAQ in the USA, OTCEI of India and the AIM in the UK are all success stories of how OTC securities market have been able to transform economies," he said.

Dr Sowa mentioned members of the Club 100 that were not listed on the Ghana Stock Exchange (GSE) as some of the numerous public companies trading on the OTC market. He said despite evidence of sou nd macroeconomic fundamentals, activities in the real sector had not shown the desired response to these positive stimuli.

Dr Sowa noted that lack of adequate financial capital had been identified as the root cause of this apparent inability of the real sector to respond.

Ghana's private sector is large and fragmented and are mainly made up of small and medium scale enterprises that found it difficult to access relatively cheaper source of capital to scale up its capacity, he said. According to him those who might wish to turn to the GSE market to raise funds, also found it difficult by virtue of their size, meeting the requirements and disclosures demanded of them by the securities industry's laws.

"...If not given any push, a sizable proportion of private sector firms will remain as they are in size and will never have any chance to grow to propel the kind of national economic growth needed to move this country into a middle income status," Dr Sowa cautioned. The SEC which organised the seminar has engaged the services of consultants to assist in charting a path for the establishment and development of a formal OTC market in Ghana. n