- Investor Takes SEC to Court Over New Market Levies, Alleges Unconstitutional Erosion of Investment Capital
A Ghanaian investor has taken the Securities and Exchange Commission to the High Court in Accra in a potentially consequential constitutional challenge to the regulator’s new market levy regime, arguing that charges imposed directly on investment portfolios unlawfully erode private capital irrespective of whether investors make a profit.
Daniel Ofori Jnr is asking the court to declare key provisions of the SEC’s Guidelines on Market Levies for 2026 unconstitutional and of no legal effect, contending that their application breaches his rights to property, equality and administrative justice under Ghana’s 1992 Constitution. The action, filed as an application for the enforcement of fundamental human rights, names the Securities and Exchange Commission as the sole respondent.
The case could become an important test of how far a financial regulator can go in transferring the cost of market supervision directly to investors rather than imposing it on licensed operators whose businesses it regulates.
At its heart is a deceptively simple question with potentially far-reaching implications for Ghana’s capital market: can a regulator impose a recurring charge on the value of an investor’s assets, even where those assets generate no income or have declined in value?
According to the affidavit supporting the application, Mr Ofori holds funds under management with Bora Capital Advisors Limited and says the SEC’s guidelines directly affect his investment and property rights. He identifies paragraphs 6.0, 7.0 and 8.0 of the 2026 guidelines as the provisions central to his challenge.
The court documents state that the guidelines impose a 0.20% levy on Collective Investment Schemes, Real Estate Investment Trusts and retail wealth-management portfolios, while institutional wealth-management portfolios and private funds are charged 0.10%.
The applicant’s complaint is not simply that the levy exists, but that the guidelines expressly place the burden on clients whose money is managed by fund managers rather than on the regulated institutions themselves.
That distinction lies at the centre of the constitutional argument. Mr Ofori contends that the levy is calculated through deductions from the Net Asset Value of clients’ current holdings and applies irrespective of whether the underlying investment is profitable, earns income or generates any positive return.
In his affidavit, he argues that the mechanism systematically reduces investment principal merely because assets remain under professional management.
If the court ultimately accepts that characterisation, the dispute could move beyond a technical disagreement about regulatory pricing and into the more fundamental territory of property rights and the lawful limits of administrative power.
The SEC, however, has not had its defence included in the document provided for this article, and none of the applicant’s allegations should be read as findings of fact or law by the High Court.
Mr Ofori’s case is built around three principal constitutional claims: unlawful interference with property, discriminatory treatment and denial of administrative justice.
On property rights, he argues that the repeated deduction of a levy from investment holdings amounts to the systematic depletion of capital without compensation. He characterises the effect as a regulatory acquisition of private property and invokes Articles 18 and 20 of the Constitution, which protect property rights and address compulsory acquisition.
The argument is particularly provocative because it challenges the conventional distinction between a regulatory fee and an acquisition of property. Regulators routinely impose fees and levies to finance supervision, and financial-market participants regularly bear charges associated with transactions, custody, fund management and compliance. Mr Ofori’s case asks whether that legal position changes when the charge is imposed directly on an investor’s underlying capital and recurs regardless of economic performance.
His affidavit attempts to sharpen that distinction by contrasting the disputed Net Asset Value levy with charges already applied to transactions in regulated securities markets.
He argues that the SEC already receives a levy when securities are purchased and could receive another charge when assets must be sold to generate cash to meet the new NAV-based obligation.
In his formulation, an investor could therefore pay a regulatory charge when acquiring an investment, subsequently pay an asset-based levy simply for holding it under management and then pay another transaction levy if part of the portfolio must be sold to raise cash to settle the NAV charge. The affidavit calls this a “predatory, self-compounding cycle” and an “unconscionable double-taxation trap”.
Whether a court would legally characterise those charges as taxation, regulatory levies or something else is not resolved by the filing. But economically, the application raises a substantive question about cumulative transaction and holding costs in a capital market where policymakers are simultaneously seeking to encourage greater participation by households and institutional investors.
The second limb of the case concerns equality. The applicant points to the difference between the 0.20% levy on retail wealth portfolios and the 0.10% levy on institutional portfolios and private funds, arguing that the differential treats individual investors less favourably than corporate or institutional investors without sufficient justification. He claims this violates the constitutional protection against discrimination.
That argument could prove especially important because differentiated regulatory charges are not inherently unlawful. Regulators can potentially justify different rates on the basis of asset class, supervisory cost, market structure, risk or public policy. The constitutional issue raised by Mr Ofori is whether the particular distinction in the SEC guidelines has a rational and lawful basis sufficient to withstand an equality challenge.
The filing argues that, from the perspective of an individual investor, the practical result is stark: a natural person may face a levy twice the rate applied to certain institutional investors. Mr Ofori says there was no justification offered to him for that distinction and alleges that it amounts to discrimination against him because he is an individual rather than an artificial corporate entity.
The third and potentially broader challenge concerns administrative justice. Mr Ofori argues that the SEC imposed a measure that directly affects his investment capital without giving him an opportunity to be heard and without adequate public or private consultation.
He invokes Article 23 of the Constitution, which requires administrative bodies and officials to act fairly and reasonably and comply with requirements imposed by law.
His case makes an important distinction between consulting market operators and consulting the people whose money ultimately bears the levy.
According to the affidavit, although the SEC routinely engages licensed operators under its supervision, the applicant says investors whose portfolios would actually fund the levy were not afforded equivalent participation before the charge was introduced.
That argument could have implications extending beyond the capital market. If a court determines that direct economic impact creates an obligation to hear affected beneficiaries or clients before a regulator imposes a levy through administrative guidelines, other public bodies could face stronger procedural requirements when introducing charges that are ultimately passed through to consumers.
But the case also presents difficult questions for the applicant. The court may have to distinguish between a regulatory consultation requirement and a constitutional right to an individual hearing before a generally applicable financial rule is introduced.
It may also have to determine whether the SEC’s governing legislation authorises the disputed levies and, if so, whether the guidelines merely operationalise that statutory authority or go beyond what Parliament intended.
The document itself does not contain the SEC’s response, its statutory interpretation, its justification for the different levy rates or its explanation of how the proceeds will be used. That absence is important. The case before the public at this stage is the applicant’s constitutional argument, not a judicial determination that the SEC acted unlawfully.
Mr Ofori is asking for sweeping remedies. He wants the High Court to declare paragraphs 6.0, 7.0 and 8.0 of the SEC’s Guidelines on Market Levies for 2026 inconsistent with Articles 17, 18, 20 and 23 of the Constitution and therefore unconstitutional, null, void and without legal effect. He is also seeking an order of certiorari quashing those provisions.
More immediately consequential for the investment industry, the applicant is seeking a perpetual injunction restraining the SEC, its agents, assigns and market operators from enforcing, collecting or deducting any levy against his funds under management on the basis of the challenged guidelines. He additionally seeks general damages for what he describes as flagrant violations of his fundamental human rights and costs on a full indemnity basis.
If granted in terms broad enough to affect implementation beyond the applicant’s own portfolio, the relief could disrupt the SEC’s levy model and force a reconsideration of how the regulator finances supervision of Ghana’s growing asset-management industry.
Even a narrower ruling confined to Mr Ofori could nevertheless establish legal principles that other investors might seek to rely upon.
The documents also reveal that the action is supported by an investment statement, the SEC guidelines, correspondence bringing those guidelines to the applicant’s attention, a portfolio valuation report and a computation illustrating the alleged effect of the levy.
Those exhibits are identified in a certificate attached to the motion, although their substantive contents are not reproduced in the 11-page filing supplied for this article.
That limits how far the economic impact can presently be quantified. The filing alleges systematic erosion of principal, but the document alone does not provide enough visible numerical detail from the valuation and computation exhibits to establish the actual cedi amount lost by Mr Ofori or the projected long-term compounding effect on his portfolio.
The dispute nonetheless raises an unusually important policy question for Ghana’s capital market.
Regulation costs money. The SEC requires skilled personnel, technology, surveillance systems and enforcement capacity to supervise asset managers, protect investors and maintain confidence in securities markets.
The difficult question is not whether supervision should be financed, but who should bear the cost, on what basis, and with what safeguards against undermining the investment participation that regulation is intended to protect.
If market operators are charged, they may ultimately pass the cost to investors through management fees. If investors are charged directly, the incidence becomes more transparent but potentially more politically and legally contentious.
If a levy is based on assets rather than profits, it provides the regulator with a more stable revenue stream, but it also means investors pay even when their portfolios decline.
That is precisely the contradiction Mr Ofori wants the High Court to confront. The case may therefore become a test not merely of the SEC’s 2026 guidelines, but of the balance between regulatory sustainability and investor property rights.
Ghana wants deeper capital markets, more long-term savings and greater mobilisation of domestic investment capital, yet every additional layer of cost potentially changes the attractiveness of professionally managed investments relative to alternatives.
There is also a question of confidence. Investors entering collective schemes and managed portfolios typically expect fees to be clearly disclosed and predictable. A regulatory charge imposed directly on their assets can become contentious if investors believe they did not consent to it, were not adequately informed before implementation or cannot see a direct relationship between the charge and the services they receive.
For the SEC, the stakes are equally substantial. A regulator without adequate financing can become ineffective precisely when expanding markets require more sophisticated oversight.
If the court limits the Commission’s ability to fund regulation through asset-based levies, policymakers may eventually have to consider whether supervision should be financed differently, including through operator fees, transaction charges, appropriations or a redesigned statutory levy.
The High Court has not yet determined any of those issues based on the document provided. There is no judgment in the filing, no response from the SEC and no indication within the supplied material that the challenged guidelines have already been suspended.
What exists is a constitutional challenge that strikes directly at the architecture of Ghana’s new market levy regime.
Mr Ofori is effectively asking the court to decide where legitimate regulatory financing ends and unlawful interference with investor capital begins; whether charging retail investors at a higher rate than institutional portfolios is legally defensible; and whether those whose money ultimately bears a regulatory levy deserve a greater voice before it is imposed.
Those questions make the action larger than one investor’s portfolio.
If the SEC prevails, the ruling could strengthen regulators’ latitude to finance market supervision through levies applied to assets under management, subject to the statutory framework.
Also, if Mr Ofori succeeds, the decision could force a fundamental reconsideration of how regulatory costs are imposed across Ghana’s securities industry and potentially expose the levy framework to challenges from other investors.
Either way, the dispute puts a question that has largely been debated within financial circles squarely before the courts: when the state seeks to make investors pay for the regulation designed to protect them, how much can it take, how can it take it, and what constitutional process must it follow before reaching into their portfolios?
The High Court’s eventual answer could shape not only the future of the SEC’s 2026 levy regime, but the wider relationship between Ghana’s regulators, market operators and the investors whose capital the financial system ultimately exists to serve.
