BoG, FIC Issue New Fit and Proper Guidelines for Accountable Institutions

By Praisebell Rosemond Larbi

The Bank of Ghana (BoG), in collaboration with the Financial Intelligence Centre (FIC), has issued new Guidelines on Fit and Proper Persons for Accountable Institutions, aimed at strengthening corporate governance, regulatory compliance and safeguards against criminal ownership and control within the financial sector.

The guidelines are issued pursuant to Section 4(1)(k) of the Bank of Ghana Act, 2002 (Act 612), as amended, and Section 52(5)(e)(i) of the Anti-Money Laundering Act, 2020 (Act 1044). They are also aligned with existing regulatory and supervisory requirements under the Financial Action Task Force (FATF) Recommendations.

According to the central bank, the guidelines apply to all Accountable Institutions supervised by the Bank of Ghana. Accountable Institutions, as defined under the framework, include all institutions licensed and registered by the Bank of Ghana.

The BoG noted that the new guidelines are intended to complement existing directives, notices and guidelines already issued on Fit and Proper Persons requirements, rather than replace them.

Objectives and Scope

The primary objective of the guidelines is to ensure that individuals who are not considered “fit and proper” are prohibited from engaging in licensed or registered activities under the supervision of the Bank of Ghana. The framework also seeks to establish a standardised approach for assessing the fitness and propriety of significant shareholders, directors, key management personnel, and third parties who provide services to Accountable Institutions.

In addition, the guidelines are designed to promote sound corporate governance practices and enhance confidence in the management and control of regulated institutions.

The principles underpinning the guidelines include proportionality and case-by-case assessment, due process and fairness, continuous fit and proper assessment, ongoing supervision, and the prevention of criminal ownership and control.

Conditions for Assessment and Appointment

Under the guidelines, Accountable Institutions are required to conduct fit and proper assessments prior to the appointment of directors and key management personnel. These assessments must also be carried out on an ongoing basis, at least annually, or whenever the institution becomes aware of information that may materially compromise a person’s fitness and propriety.

The results of the annual assessments must be properly documented and submitted to the board of the institution for review and oversight.

Reputation and Integrity

The Bank of Ghana indicated that a qualifying person must be of good repute to ensure sound and prudent management, as well as to instil trust and confidence in the Accountable Institution.

A person will be deemed to be of good repute where there is no evidence, or reasonable basis, to suggest otherwise, particularly with respect to integrity, honesty and past conduct.

Understanding of Regulated Activities

In assessing significant shareholders, the Bank of Ghana will, through interviews, determine the individual’s appreciation and understanding of the regulated activity, including applicable laws, rules and regulatory obligations.

The interview process will also include verification of the source of funds used for acquiring shareholding interests, as well as the assessment of the shareholder’s ability to meet ongoing financial commitments.

The BoG said the implementation of the guidelines is expected to strengthen oversight, enhance transparency and further align Ghana’s financial sector with international best practices in governance and anti-money laundering supervision.