Prime Minister Supports Creation of Junior Stock Exchange Listing


Prime Minister, the Hon. Bruce Golding, has expressed the view that more should be done to enable and encourage more companies, particularly smaller ones, to list on the Jamaica Stock Exchange (JSE). This he said, as the requirements for listing now are, “so onerous, that it is not just small companies who are afraid to list, but that medium sized companies and even some big companies just would not want to take on that burden”.
Mr. Golding, who was addressing a meeting at Jamaica House yesterday morning (Oct. 10) with representatives of the JSE and the Financial Services Commission (FSC), pointed out that while the standards for listing should not be diluted, the concept of the establishment of a junior exchange listing should be explored. The Prime Minister noted that there are a number of young companies that are in fact doing well, and that if these can be brought within a framework where they are subject to some level of regulation, this would boost investor confidence and, “some of those stocks can grow exponentially, because they are doing so well in their niche of the market”.
In her presentation, General Manager of the JSE, Marlene Street-Forrest, said that the JSE has been progressing toward making a junior stock list a reality. “We recognize that some companies, may not list because of the requirement.we had to look wider to see what worked, and the junior venture exchange in Canada is a model that we think we would like to adopt,” she said. Mrs. Forrest said supporting legislation -the Companies and the Securities Acts- had been examined, and “there is clear indication that it can happen. Therefore, from the standpoint of how we go forward, we will be looking at modifying our requirements, but there are still some requirements that we will look at to modify in terms of regulation”, she said.
Meanwhile, Executive Director of the FSC, Brian Wynter said the junior stock list is an excellent idea, stating that it in fact fits in with a thrust that regulators around the world have been looking at collectively. He agreed that balance between easier access to capital for small entities and protection of investors was important. “At the same time, Jamaica’s standards of disclosure have been looked at over the last few years and have been found wanting, in terms of the legal framework,” Mr. Wynter told the meeting. He disclosed that a project is about to come to fruition which puts in place higher or more modern standards for Jamaica in this regard.
“Our proposal is to create a qualified investor concept whereby there is a large class in terms of value of investment money that is free to invest in a lower legal standard of disclosure, and we think that marrying that with the junior list idea is going to be the solution for that,” Mr. Wynter stated. Deputy Executive Director of the FSC, George Roper suggested that incentives should be put in place, both by the government and the JSE, to encourage more listings. The Prime Minister also used the opportunity to restate his support for a regional stock exchange, pointing out that it would provide more options for investors and provide greater insulation against undue influence. However, he emphasized that some issues would have to be explored, such as the matter of trading in a market, which involves several different currencies, and would therefore be driven to some extent not only by what is happening with the stock itself, but also by currency.
Minister of Finance and the Public Service, Hon Audley Shaw, and Ministers without Portfolio in the Ministry of Finance and Public Service, Don Wehby, and Senator Dwight Nelson, are scheduled to meet with representatives of the Jamaica Stock Exchange today (Oct. 11), to formulate a plan of action on the way forward.

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