Banks, SDIs instructed to use GFIM end-of-day pricing in mark-to-market valuation of securities

In a bid to enhance transparency and standardization in the valuation of securities, the Bank of Ghana (BoG) has issued a new directive to all banks and Specialised Deposit-taking Institutions (SDIs) in the country.

The directive contained in a notice issued on Thursday, April 4, 2024, mandates the adoption of the Ghana Fixed Income Market’s (GFIM) end-of-day closing prices as published in the daily trading reports by bank and SDIs for mark-to-market valuation of securities.

This directive refers to the investment wings/departments of banks, asset management firms, microfinance companies (MFCs), rural and community banks (RCBs), micro credit companies (MCCs), financial non-governmental organisations (FNGOs), savings and loan companies (S&Ls) and finance houses (FHs).

Furthermore, primary dealers per the new directive are now obligated to submit market-reflective indicative prices for government securities on a daily basis, with a strict submission deadline set at 11:00 a.m. daily.

The decision by the BoG underscores its commitment to promoting transparency and integrity in the financial markets.

By enforcing standardized pricing mechanisms, the Central Bank seeks to safeguard investor interests and bolster confidence in Ghana’s financial ecosystem.

Failure to comply with these new guidelines may result in regulatory penalties or sanctions for banks and SDIs, underscoring the imperative for banks and SDIs to swiftly adapt their operations to meet the BoG’s requirements.

Source:norvanreports