GHANA Law and Practice Contributed by: Adelaide Benneh Prempeh, Michelle Nana Yaa Essuman, David William Akuoko-Nyantakyi and Audrey Nana Oye Addy, B&P Associates
as amended, and the SEC Regulations, 2003 (LI 1728). Depending on a bank’s role in securitisation, specific licences or approvals may be required. For instance, acting as an originator requires SEC approval. Additionally, any bank seeking to engage in capital market activities beyond roles like trustee, custodian, primary dealer, nominee, registrar, issuing house, or underwriter must incorporate a subsidiary and obtain a licence from the SEC, as stipulated in Section 114 of Act 929. 4.10 SPEs or Other Entities The form of SPEs or other entities used in secu - ritisation in Ghana is flexible due to the absence of specific securitisation laws. However, for list - ing on the Ghana Stock Exchange (GSE), SPEs must be incorporated as Public Liability Com - panies (PLCs) under the Companies Act, 2019 (Act 992), as stipulated by the GSE Listing Rules 4(6)(a). In securitisation transactions, SPEs are often set up as “orphan” entities, meaning they are structured independently of the corporate group involved in the transaction. To achieve this, own - ership of the SPE is typically vested in a chari - table trust. In settling on the ideal form of the SPE, it is important to consider the fact that the corpo - rate veil may be pierced pursuant to the provi - sions of legislation or under equitable grounds as decided by the Supreme Court in Morkor v Kuma [1999–2000] 1 GLR 72. Therefore, the court may disregard the separate legal per - sonality principle where the distinctness of the SPE and its holding company has not been suf - ficiently established or where their affairs are so entangled that upholding the separate personali -
ty principle would cause injustice to all creditors. Being a discretionary remedy, some factors that guide the court in applying this remedy include, inter alia, the following: • the parent company and the SPE have com - mon directors or officers; • the parent corporation finances the SPE; • the directors or executives of the SPE are subject to the control of the parent corpora - tion; • the formal legal requirements of the subsidi - ary as a separate and independent corpora - tion are not observed; and • there is a commingling of assets and busi - ness functions. If the veil is pierced, the originator and SPE may be treated as a single unit, raising transfer pric - ing issues concerning the asset transfer, as per Section 31 of Act 896. 4.11 Activities Avoided by SPEs or Other Securitisation Entities In Ghana, SPEs engaged in securitisation must be cautious with public offerings of securities, as such invitations bring them under the oversight of the SEC. It is challenging for these entities to avoid SEC regulation when they invite public investment, as the SEC has regulatory authority over public securities offerings. The SEC is responsible for determining whether an SPE has complied with regulations govern - ing public securities issuance. If an SPE issues securities publicly without securing necessary approvals, it faces significant penalties, includ - ing an administrative fine of GHS12,000, per Section 206(2)(b) of Act 929.
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