Deposit of Securities
Investors are able to deposit their securities in the JCSD through any of the 12 brokers in Jamaica. The securities are held in the ‘Street name” or the Nominee name of the JCSD on behalf of the investors.
Depositing ones securities allow for easier transfer of ownership through a book entry system rather than transferring physical certificates. All securities traded on the Jamaica Stock Exchange must be deposited in the JCSD.
Withdrawal of Securities
Investors are also able to withdraw from the JCSD the securities previously deposited and a certificate is issued. The client losses all the benefits associated with having his/her securities held electronically.
The JCSD holds, for safekeeping, securities that are not listed on the Jamaica Stock Exchange. The primary benefit to this service is the cost savings; in terms of printing, stamp duty and other administrative costs. Paying agent services is provided through our Registrar Services Unit and Trust Services through our subsidiary company JCSD Trustee Services Limited. Currently we provide to this service to eight institutions.
Clients are able to view their holdings via our website
Clearing & Settlement
The settlement process consists of two components – clearing and settlement. Clearing refers to settlement of the financial claims of the brokers associated with the trading of the securities on the floor of the Exchange; and settlement refers to delivery of these securities. The JCSD uses the Bank of Jamaica’s JamClear RTGS system for clearing purposes while the settlement of securities is processed in our Depend system. Clearing & settlement takes place on settlement day which is two days after the securities are traded (T+2 settlement cycle).
Pledging of Securities
Pledging is simply registering the interest of a creditor (pledgee) on securities deposited at the JCSD by a client (pledgor). Therefore, investors are able to use securities deposited in the JCSD as collateral for loans at institutions participating in our Loan Collateral Program.
Even though the security is pledged to the lending institution it is still owned by the client unless s/he defaults on their obligation.
Benefits of Pledging Securities
To the investors:
- The investor can use his/her security to stand as collateral for loans.
- The investor is able to receive all benefits, for example, dividends or interest payments, even while the securities are pledged.
- The investor is able to monitor his/her security and the units pledged by viewing their online statement.
To the Lending Institution:
- The pledgee has confidence that the securities are being held in their favour and can request confirmation from the JCSD at any time.
- The pledge will remain in effect until the pledgee instructs in writing under two signatures that the pledge is to be released.
- It reduces the risk that the borrower will default.
- The pledgee has the right to sell the security if the client defaults on his/her obligation.
Transfer of Securities between Brokers & other Central Securities Depository (CSD) within the region (Trinidad & Barbados)
Investors may wish to move their securities held in a JCSD account at one brokerage house to another brokerage house. This is done for various reasons: preference, customer service experience, availability, just to name a few.
An investor may move his/her cross-listed securities from the JCSD to another CSD in the region so that s/he is able to trade these securities on the exchange in that country
Investors are able to provide instructions to the JCSD relating to the payment of their dividend or interest. These instructions are passed on to the Registrars on the record date of the payment.
Preparation of Audit Confirmation
Audit confirmations are prepared upon request from companies which hold securities in the JCSD. These confirmations are generally requested at their year end and are forwarded to their auditors.