SEC approves introduction of new instruments on GSE
The Securities and Exchange Commission (SEC) has approved for the introduction of new financial instruments on the Ghana Stock Exchange (GSE).
The approval by the SEC, was made know by the Deputy Director of the Stock Exchange, Abena Amoah.
The new financial instruments approved to be listed on the local bourse include green bonds, social bonds and other sustainability-themed financial instruments.
According to her, the GSE following the approval from SEC, is working with investors to introduce the aforementioned bonds.
“The GSE is working with investors in the market to introduce green bonds, social bonds and other sustainability themed products onto the market,” she said.
“Also we are working on setting up and ensuring that the stock market has a rating agency, because we understand that to grow the corporate bond market, we must have a rating agency.
“So the GSE is supporting and pushing for the formation of a domestic rating agency that will be independent and give both investors and issuers the confidence they need to invest and raise capital,” she added.
The Ghana Stock Exchange (GSE), for sometime now, has been looking to introduce derivatives and green bonds trading on the local bourse.
Aside the trading in green bonds and derivatives, the exchange is also looking to commence trading activities in the Over-The-Counter (OTC) market.
Derivatives are financial instruments traded either on a stock exchange or in the OTC market whose price are based on underlying assets which could be bonds, equities, currencies, commodities among others.
They are used to speculate and hedge against fluctuations in prices of underlying financial instruments. The OTC market is the market where parties – buyers and sellers – negotiate and trade in financial instruments. Transactions in the OTC market occurs off the official stock exchange market.
Meanwhile, the introduction of green bonds on the stock market follows the partnership between the World Bank’s International Finance Corporation (IFC) and the Securities and Exchange Commission (SEC).
Trading of green bonds on the stock market as well as the OTC market, will give investors opportunities to finance green buildings, clean transportation, renewable energy, sustainable water management, and other climate-friendly projects.
