As was expected by capital market analysts, the sharp increases in the Securities and Exchange Commission’s (SEC) levies, which took effect on March 1, 2026 have begun having a significant impact on the behaviour of investors, as some market operators are consequently passing on some of the risen costs resulting from the levies, to their investing clients.
The immediate issue is not simply that licensed operators now pay more to their regulator; it is how much of that additional cost they can absorb, how much they will pass on to clients, and how the resulting increase in the cost of investing will alter portfolio construction and trading behaviour.
The increases are substantial. The SEC’s 2025 schedule required fund managers to pay GH¢7,500 annually, broker-dealers, investment advisers and registrars GH¢5,000, while the corresponding 2026 levies are GH¢25,000 and GH¢15,000 respectively. In other categories, the increases are similarly large.
The broad direction is unmistakable: the fixed regulatory burden has increased dramatically, with some categories experiencing increases of up to four times their previous annual levy.
Market operators can pay in full or in a maximum of three installments within the first-quarter window
The most striking impact emerging so far results from the aspects of SEC’s new framework that explicitly imposes a levy on non-pension funds under management, calculated on net asset value. The rates are 0.2 percent for collective investment schemes, Real Estate Investment Trusts (REITs) and retail wealth mandates, and 0.1 percent for institutional and private-fund mandates. Crucially, the guidelines state that this levy is to be borne by clients whose funds are under management.
This has changed the economics of the industry more fundamentally than a simple increase in annual licence fees. A small fund manager with GH¢100 million of eligible assets, for example, faces annual levy of GH¢200,000 on a 0.2 percent category. For an operator managing GH¢1 billion, the equivalent is GH¢2 million. The larger operator therefore pays more in absolute terms, but the smaller operator may have considerably less revenue over which to spread its fixed costs.
For clients, the effect depends heavily on the type of service they use. Investors in professionally managed funds are experiencing the increase most directly through deductions from fund values or through revised management and administration charges. Active equity investors using broker-dealers, meanwhile, are beginning to see higher minimum brokerage charges or other transaction-related fees as brokers attempt to compensate for higher fixed regulatory expenses.
This is where portfolio behaviour is beginning to change.
For smaller investors, higher costs strengthen the incentive to trade less frequently. An investor who previously bought and sold equities on relatively small price movements may find that transaction charges consume too much of the potential gain. The rational response is to consolidate trades, hold securities for longer and place larger orders less frequently. This is encouraging a gradual movement from short-term trading towards buy-and-hold strategies.
Portfolio construction also stands to become more concentrated. If maintaining several small positions becomes relatively expensive, investors may reduce the number of securities they hold and favour larger, more liquid instruments. That would be unfortunate from a diversification perspective because one of the principal advantages of capital markets is the ability to spread risk across different securities and asset classes.
Going forward, there is also likely to be substitution between products. Faced with increasing transaction fees, investors will begin to favour fixed-income instruments, money-market products or professionally managed portfolios where the total cost of ownership is perceived to be lower than frequent equity trading. Conversely, some investors will migrate towards larger fund managers that can spread regulatory and compliance costs over much larger asset bases.
Capital market analysts and commentators are also raising an important competitive issue. Higher regulatory costs can unintentionally accelerate consolidation. Smaller operators facing higher compliance, technology, staffing and licensing costs may decide that remaining independent is no longer economically attractive. Some could seek mergers, strategic partnerships or acquisition by larger institutions. Others may specialize in high-net-worth clients where fees are sufficiently large to sustain the business.
In the short term, therefore, the SEC’s fee increases have the potential to produce a two-speed market: large operators with greater capacity to absorb costs and smaller operators forced to pass a greater proportion of them to clients.
The long-term outcome, however, need not be negative, market analysts assert. Better-funded regulation can improve supervision, investor protection and market integrity—conditions that are essential if Ghana wants to deepen its capital market.
Mensah Thompson, Deputy Director-General of the SEC Ghana, has insisted that the increases should not be viewed simply as additional operating costs imposed on financial institutions, but as part of the price of building a stronger regulatory system capable of protecting investors and supporting long-term market development.
The danger arises if the cost of regulation grows faster than the market itself. Ghana still needs more retail participation, more active domestic investors and greater trading liquidity. Excessive cost pass-through could work against those objectives.
The crucial policy question, therefore, is not whether operators should pay for effective regulation because even critics of the recent increase agree that they should. It is whether the regulatory cost structure is sufficiently sensitive to the scale and economics of individual operators. A large institution and a small fund manager performing essentially the same regulated function may face the same fixed levy, but the economic burden is radically different.
They warn therefore that going forward, investors should therefore watch not merely the headline fees announced by their operators, but the effective total cost of investing—management charges, brokerage, transaction levies, custody and other costs combined. The SEC’s new regime may ultimately improve Ghana’s capital market, but only if the additional cost of regulation does not discourage the very investors and trading activity that the market needs to expand.
The immediate forecast is consequently one of partial but increasing pass-through. Large operators are likely to absorb more of the burden, at least initially; but smaller operators are likely to pass on a larger proportion, and investors will respond by trading less frequently, consolidating portfolios, favouring larger and more liquid instruments and becoming increasingly sensitive to total investment costs. If sustained, that could make Ghana’s capital market more professionally regulated—but also somewhat more expensive, less liquid and potentially more concentrated unless competition and regulatory policy keep those unintended effects in check
By: Toma Imirhe / businesspostonline
