- SEC Risks Charging Investors Repeatedly on Same Capital-Market Activity — William Mensah
Ghana’s Securities and Exchange Commission risks imposing multiple regulatory charges on the same underlying investment capital, potentially reducing returns even where portfolios are making losses, according to William Mensah, Executive Director of Bora Capital Advisors.
Mr Mensah has emerged as one of the strongest critics of the SEC’s new asset-based levy framework, arguing that the most consequential aspect is not necessarily the increase in annual licence charges paid by market operators, but the 0.225% and 0.10% levies that he says are deducted directly from client investment portfolios. His concern is that the same capital could attract regulatory charges when securities are purchased, while they remain under management and again if assets must subsequently be sold.
“To me, the most problematic of this directive is this 0.225% and 0.1 percent, the one that is supposed to be paid directly by the client,” Mr Mensah said during a special edition of the NorvanReports Economic Governance Platform on X Space on Sunday, August 16, 2026. The programme, hosted by NorvanReports, examined the topic: “Regulating or Overcharging? Examining SEC’s New Levies and the Future of Ghana’s Capital Market,” with particular attention to who ultimately bears the economic cost of the charges.
The criticism highlights an important distinction between institutional licence fees and portfolio-based charges. Annual licensing fees are formally obligations of regulated companies, even if operators may ultimately attempt to recover higher costs through management charges or other commercial arrangements, whereas an asset-based levy deducted from a portfolio immediately reduces the value attributable to the investor.
“The 0.2% and 0.1%, we are sending the money to the SEC, but the money is taken from the investment holding of the client directly,” Mr Mensah said. In his assessment, the structure means investors may bear regulatory costs regardless of whether their portfolios have generated sufficient income to meet them.
He illustrated the problem using an equity portfolio in which shares are initially acquired for a client and transaction-related regulatory charges are paid at the point of purchase. If those shares subsequently generate no dividend and decline in value, the portfolio could still attract the asset-based levy because the charge is calculated against assets under management rather than investment profits or income.
“I go and buy shares for my clients, I pay the regulator fees to buy that shares for the client. And then the shares are in the client’s portfolio. And the company does not pay any dividend, and the stock price declines. The regulator says I have to pay a levy on that fund that I’m managing,” he said.
The problem becomes more complicated where a portfolio holds assets but insufficient cash to settle the levy. A fund manager could theoretically have to liquidate part of the investment to generate the cash required to meet the regulatory obligation, exposing the client to another transaction and potentially further charges.
“So it means that if push comes to shove, you have to sell part of the shares to go and pay the regulator,” Mr Mensah said. “When you sell part of the shares just to raise money to pay the regulator, you are going to pay the same regulator fees for selling that shares to raise the money to go and pay back the regulator.”
He described the potential outcome as “a crazy scenario”, particularly for a capital market still trying to expand retail participation. The criticism goes to the economic design of asset-based regulation because, unlike a charge linked to profits, dividends or interest income, an AUM levy may remain payable even during periods when investment performance is negative.
That feature can make such levies relatively predictable from a regulatory financing perspective because the revenue base does not disappear merely because markets fall. For investors, however, it means a charge can potentially worsen a portfolio loss or reduce capital even when an investment has produced no distributable income.
Mr Mensah argued that this could become particularly problematic for Ghana, where policymakers and market institutions are simultaneously attempting to persuade more households to move savings into regulated investment products. “We have a market that people are not participating,” he said, adding that “investment capital is what helps develop countries.”
The wider economic argument is substantial because deeper pools of household, pension and institutional savings can provide businesses and infrastructure projects with longer-term capital while reducing excessive dependence on commercial bank lending.
Policies that increase the recurring cost of holding regulated investments could therefore create unintended consequences if they weaken the willingness of individuals to participate in collective investment schemes, discretionary portfolios and other formal products.
“Is this the time for you to come and tell individual investors that I want to take part of your fees, whether you are making a return or not?” Mr Mensah asked. His concern extends beyond the size of the percentages involved to the behavioural effect of investors seeing deductions from portfolios during periods of weak or negative performance.
Bora Capital has already encountered that resistance among its own clients, according to Mr Mensah. He said the company informed customers about the levy requirement and subsequently received objections from some clients who questioned whether their original investment documentation authorised deductions for payments to the regulator.
“We wrote to our clients, and then we started getting all sorts of calls, some threatening to sue us, and some saying we don’t know and we touched any money,” he said. “Some said we should show them where on the AYT forms they filled we said that we were going to take money and give to the regulator.”
The episode also exposes a communication challenge surrounding the new regime because regulated intermediaries are effectively required to explain deductions arising from a public regulatory policy they did not design.
Mr Mensah said Bora Capital subsequently classified clients according to whether they had objected and whether sufficient cash was available in their accounts before making the first batch of payments for eligible portfolios at the end of July.
That suggests the SEC may face pressure to communicate more directly with investors about precisely how the levy operates, including which assets form the assessment base, how frequently deductions occur and what happens where portfolios have insufficient cash. Greater disclosure could reduce confusion, although Mr Mensah argues that better communication would not resolve his more fundamental objection to charging investment capital at multiple stages.
“I don’t think it is right to charge fees when the client does the initial transaction, and then on the asset under management, whether it makes money or not, whether he’s making losses or not, whether he’s received income or not, you still want to continue that,” he said. “At this stage of the market, we should not be thinking about that at all.”
The policy dilemma is ultimately one of regulatory financing versus market development. SEC requires sustainable resources to supervise operators, enforce securities laws, protect investors and rebuild confidence, but the mechanism used to raise those resources can itself influence the attractiveness of investing through regulated institutions.
For Ghana’s still-developing capital market, that trade-off could prove more important than the immediate revenue generated by the levy. If investors come to believe their capital is being charged when it enters the market, while it remains invested and again when assets are sold, the cumulative effect could weaken participation even where each individual charge appears relatively small.
Mr Mensah’s argument therefore raises a question that goes beyond Bora Capital or the SEC’s revenue needs: can Ghana finance stronger regulation without making regulated investment progressively more expensive for the very investors the market is trying to attract?
