Financial sector regulators yet to publish annual reports

Failure of the financial sector’s four regulators to publish their respective annual reports in a timely fashion has raised concerns among industry experts and stakeholders alike – who say it represents double standards and dampens confidence, particularly at a time when it is sorely needed.

They warned that failure of the Securities and Exchange Commission (SEC), National Insurance Commission (NIC), Bank of Ghana (BoG) and the National Pensions Regulatory Authority (NPRA) to publish their reports in the same manner as they expect the institutions they regulate to do, could have dire implications for the country’s quest to restore confidence in the sector and attract much-needed foreign direct investments (FDIs).

While the SEC – responsible for overseeing the capital markets and the NIC – tasked with regulating the insurance industry, have both failed to publish their formal annual reports for the year 2021 and last year, the banking industry and pensions watchdogs – BoG and the National Pensions Regulatory Authority (NPRA) – have published their respective reports for 2021 with the 2022 reports pending, despite the first half of the year, which historically is the period for publication, having been exhausted.

Commenting on the development, Dean-University of Cape Coast Business School, Professor John Gatsi, said it betrays cardinal principles of the financial sector such as transparency and soundness.

“It is the professional duty of the regulators to have their annual reports ready; and if we have a regulator falling short of these principles, including that of their self-regulation, it is something which falls short of what is required of them and must be addressed quickly,” he said, adding that failure to do so will only foster negative sentiments within and outside the sector.

Reacting to concerns that the regulators might be under-resourced relative to their supervisory duties, he said the onus falls on them to rectify their shortfalls, if they exist.

“These institutions are called regulators for a reason. It is not the duty of the public or the entities they regulate to provide them with those resources; and if they are not doing it, stakeholders must collectively raise concerns,” he added.

Financial institutions, especially those listed on the Ghana Stock Exchange, are expected to submit their audited statements by March 31. This year, they sought and were granted a one-month extension on account of the hiccups brought about by the domestic debt exchange programme (DDEP).

Own information

An analyst, who pleaded anonymity on account of his affiliation with the SEC, pointed out that the development “does not paint the industry in the best of lights” as the regulator oversees a sector that relies heavily on information.

“For a body which mandates that institutions under its sphere of oversight provide timely and accurate information, with the possibility of sanctions, this is a far from ideal situation,” the source lamented.

While the SEC and NIC provide quarterly notes – a newsletter in the case of the former and quarterly market reports, based on unaudited data, by the latter – the analyst believes these are not comprehensive enough.

The analyst added that while these reports are crucial for evaluating the overall health and performance of capital markets, they also provide insights into internal operations of the Commission itself.

“Investors, shareholders and other stakeholders heavily rely on these reports to make informed decisions and assess the performance, risk exposure and regulatory compliance of companies within these industries. The absence of these reports may lead to uncertainties and a lack of confidence in the markets,” he further stated.

In the absence of official explanations, speculation and conjecture regarding potential underlying issues have begun to circulate within the financial community, he noted.

Another market participant, who equally sought to remain anonymous, said the delay could be attributed to the complexities and challenges brought on by the COVID-19 pandemic which disrupted normal business operations and priorities for regulatory bodies worldwide.

He however did not rule out the possibility that internal factors within the regulatory agencies might have contributed to the delay, as well as the DDEP.

He called on the SEC and NIC to expedite the release of their annual reports to restore confidence and transparency in the market, and asked that they communicate openly about reasons for the delay to address any speculations and anxiety.

“As regulators of the capital markets and insurance industry, the SEC and NIC play a critical role in ensuring the stability and integrity of these sectors. The publication of their annual reports serves as a vital cornerstone in maintaining trust and fostering investor confidence,” he added.

Missing out

Another anonymous analyst said it is a reflection of the industry’s top-brasses’ lack of discipline, as they expect to apply one set of rules to themselves and another to the regulated entities.

He pointed out that while regulators often exert pressure on regulated entities to comply with regulations, they themselves have outstanding reports – leading to a credibility crisis.

To demonstrate its possible effect on attracting FDIs, he narrated an instance when a regulated entity missed out on capital injection during a recapitalization exercise as the interested investors – eager to conduct independent analyses before investing – were unable to access timely data on the regulator’s website for crucial information.

“Investors typically rely on regulators’ reports as their first source of information when considering investment opportunities. However, the delayed reports have created an unfavourable environment in comparison to other countries in the region such as Rwanda, Uganda and Kenya, where reports are readily available,” he noted.

He said two of the watchdogs have fallen behind in publishing their reports, despite previously maintaining consistency in doing so. One, in particular, was known for its regular publication of results and rankings of market players until 2017/2018; leaving industry insiders perplexed about the sudden change in practice.

The analyst was of the belief that if institutions such as BlackRock – the largest asset management firm in the world – can post reports within the first month of the year, local regulators should be able to do the same. He added that a change in legislature to compel them might become necessary if the situation persists.



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Failure of the financial sector’s four regulators to publish their respective annual reports in a timely fashion has raised concerns among industry experts and stakeholders alike – who say it represents double standards and dampens confidence, particularly at a time when it is sorely needed.