The Ghana Fixed Income Market has unveiled a comprehensive framework governing how companies and government entities can repurchase their own securities. The newly drafted procedure establishes clear guidelines for both on market and off market buybacks, marking a significant step in developing the country’s capital markets.
According to the document, all buyback programs must receive approval from both the Securities and Exchange Commission and GFIM at least five business days before execution. The framework outlines four distinct options available to issuers, ranging from complete repurchases through the trading platform to targeted off market transactions.
The system aims to balance flexibility with robust investor protection. On market buybacks will occur through GFIM’s electronic platform with full market visibility, while off market transactions will be handled privately through Central Securities Depository forms and sponsor coordination.
Market analysts note this development addresses a critical gap in Ghana’s financial infrastructure. The framework provides issuers with sophisticated liability management tools while ensuring transparency for all market participants. It specifically requires that investors receive proper notification and choice about participation in any buyback program.
Stakeholder feedback during the consultation phase highlighted several key concerns. Commenters requested clearer definitions of sponsor roles, safe harbor provisions for market participants, and standardized procedures across all transaction types. The draft also maintains a fee structure where members may charge up to five basis points for their services.
The Ghanaian approach appears more structured than systems in comparable regional markets, notably Nigeria’s FMDQ, particularly regarding mandatory pre-approval and fixed notification periods. This deliberate design reflects GFIM’s commitment to market integrity while providing issuers with multiple avenues for executing buybacks based on their specific needs.
Source: newsghana.com.gh
