Ghana’s Securities and Exchange Commission (SEC) of Ghana has issued draft guidelines for crowdfunding activities in the country. The guidelines aim to provide clarity and guidance on the legal and regulatory framework for crowdfunding, as well as to protect the interests of investors and fundraisers.
Scope of Guidelines
The scope of the guidelines apply to companies or organizations seeking or required to be licensed by the SEC as a Crowdfunding Intermediary in accordance with the Act. These include:
- person who intends to raise capital using the services of a Crowdfunding
Intermediary; - Companies who intends to offer services as a Crowdfunding Platform in
Ghana; - Foreign companies or organisations that operates a Crowdfunding Platform
and which seeks to offer services in Ghana; - Foreign persons, companies or organisations which seeks to facilitate, operate,
maintain or provide investments-crowdfunding services in Ghana.
These guidelines do not apply to rewards-based or donations-based crowdfunding
activities.
Eligibility criteria
The guidelines specify who can participate in crowdfunding as fundraisers and funders. For example, fundraisers must be registered entities in Ghana and must maintain a minimum capital requirement of GHS 250,000.
Operational requirements
The guidelines set out the operational rules and standards for crowdfunding platforms and intermediaries. This includes requirements for registration, licensing, governance, due diligence, record-keeping, reporting, and dispute resolution.
The guidelines state that the maximum amount that can be raised by an issuer within a twelve-month period must be GHS 6,000,000 except where the funds are raised for agricultural commodities, physical assets, or agricultural projects, in which case, the maximum amount that can be raised by an issuer within a twelve-month period shall be GHS 10,000,000.
Investor protection measures
The guidelines introduce some measures to protect the interests and rights of funders. This includes limits on the amount that funders can invest in a single project or in a year, rights to cancel or withdraw from a funding agreement, rights to receive regular updates and reports from the fundraiser, and rights to lodge complaints or seek redress.
The draft guidelines are open for public consultation until October 31st 2023. The SEC is inviting feedback from all stakeholders, including crowdfunding platforms, fundraisers, funders, industry associations, civil society organizations, and the general public.
If you are interested in crowdfunding or want to learn more about it, you can read the full draft guidelines here: https://sec.gov.gh/wp-content/uploads/Final-Regulatory-Laws/Drafts/Draft-Crowdfunding-Guidelines-September-2023.pdf
Catch up on news and other tidbits on our WhatsApp Community Page, Twitter/X, and subscribe to our weekly newsletter to ensure you don’t miss out on any news.
