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  • The Securities (Amendment) Act, which seeks to enhance the legal and regulatory framework for Retail Repurchase Agreements (retail repos) in Jamaica, was passed in the Senate on Thursday, December 18.
  • In piloting the legislation, Minister of Justice, Senator Mark Golding, noted that the main focus is to provide additional protection for repurchase clients in the event of a dealer’s insolvency or bankruptcy.
  • He noted that retail repurchase agreements have become a widespread funding product for securities dealers in Jamaican, posing particular risks to the financial system.

The Securities (Amendment) Act, which seeks to enhance the legal and regulatory framework for Retail Repurchase Agreements (retail repos) in Jamaica, was passed in the Senate on Thursday, December 18.

In piloting the legislation, Minister of Justice, Senator Mark Golding, noted that the main focus is to provide additional protection for repurchase clients in the event of a dealer’s insolvency or bankruptcy.

He noted that retail repurchase agreements have become a widespread funding product for securities dealers in Jamaican, posing particular risks to the financial system.

“The Government has decided to address this by new measures creating a robust legal and regulatory framework that is designed to mitigate those risks, so as to protect the investing public and the entire financial system in the event of any major financial shocks to the system,” Senator Golding said.

The amendment to the Bill is being done as part of the structural benchmark in Jamaica’s agreement with the International Monetary Fund (IMF), and is to be in effect by December 31, 2014.

A new Section 36A is being introduced to deal with the assets that underlie repurchase agreements.

This includes provisions prohibiting a dealer from entering into or conducting transactions involving repurchase agreements unless they are undertaken in accordance with the provisions of the Act and regulations made under the Act.

For her part, Senator Imani Duncan Price, noted that the Bill was a comprehensive approach to the continued modernisation of the framework for financial services in Jamaica.

“It is about putting in structures that effectively protect the investor, especially the small investor,” Senator Duncan Price said.

The Bill was passed in the House of Representatives on December 2, 2014.