Finance Minister Dr Kwabena Duffuor on Tuesday urged securities market regulators to be firm in protecting investors’ interest in order to instil confidence and make the markets a key mechanism for mobilising long-term resources to support the growth and development of the economy.
This the Securities Commissions could undertake by improving information flow through public education and campaigns, investment in relevant information technologies to help reduce consequences of distortions.
Dr Duffuor, whose speech was read for him at the opening session of a two-day meeting of the Africa/Middle East Regional Committee of the International Organisation of Securities Commissions in Accra, said information was key to the growth of the markets.
The two-day meeting on the theme: “Information and Capital Market Development in Emerging Countries,” seeks to deliberate on issues relating to the development and effective regulation of efficient capital markets in their various regions.
Regulators from Africa and Middle East, securities experts from other parts of the world and the Secretary General of IOSCO are attending the meeting.
The Finance Minister said information empowered individuals, firms and governments to make informed decisions.
“Current and potential players in securities markets frequently need to make decisions on the level and type of investment to make, and to know the risks and returns associated with such investment,” he said.
Dr Duffuor said for the securities markets to become more efficient would depend on the availability and accessibility of adequate and quality information on operations.
He cited weak information flows, agency problems that distort prices and retard competition, and weak capacity for gathering and processing information as some of the problems of imperfect information flow.
“These problems and the market failure they bring about underscores the need to recognise adequate and relevant information as the key to promoting securities markets,” the Finance Minister said.
Dr E.V.O. Dankwa, Chairman of Securities and Exchange Commission of Ghana, said company reports must inform and enlighten in a way that allowed investors to understand the risks and prospects of the companies they sought to invest.
He said management teams must be more willing to openly discuss their business prospects with the investing public and at a minimum, must develop an external investor relations department to respond to investor enquiries.
“In our capacities as regulators, stock exchange managers, investors and issuers, we must all do what we can to ensure that the quality, quantity, consistency, availability and accuracy of the information which underpin our markets are of the highest standards,” Dr Dankwa added.