Government Looking to Lift Ban on Formation of New Unit Trusts

Minister of Finance and the Public Service, Hon. Audley Shaw, has said that the Government was looking to lift the ban on the formation of new unit trusts in the island.
He made the announcement while speaking at a function yesterday (July 9), at the Terra Nova All-Suite Hotel in Kingston, to mark the merger of Barita Investments Limited and Barita Unit Trusts.
In 1998, a moratorium was imposed on the registration of unit trust schemes and the products of the Unit Trust Act. However, Mr. Shaw stated that it was time Jamaica began looking at reviving collective investment schemes.
“We have to take a review of that now because we must widen the base of collective investments in Jamaica, so that we don’t create new opportunities for so-called alternative investment schemes to once again creep into our economy,” he argued.
Mr. Shaw informed that last week, Cabinet gave the go-ahead for the Financial Services Commission (FSC) to explore how the ban could be lifted. He noted, however, that the Government would first have to take a keen look at the regulatory framework that exists for unit trusts to ensure that the lifting of the ban was done properly.
He added that the Government also wants to refine the rules related to the establishment of more mutual funds in Jamaica. He said there was a difficulty in setting up mutual funds, in part, because of the restrictive laws that exist.
Mr. Shaw said he has instructed the FSC to work with the Bank of Jamaica to do the necessary due diligence so that a report could be presented to Cabinet soon.
Chairman of Barita Investments Limited, Rita Humphries-Lewin, in the meantime, stated that the worldwide recession presents an opportunity for Jamaica to “build a good nest egg from our stock market,” while urging Jamaicans to look at that market more seriously.
Barita Investments Limited and Barita Unit Trusts have been merged to form the subsidiary Barita Investments Limited. One of the aims of the merger is to prepare Barita for wider participation by the public, when its shares are offered publicly.