Frequently asked Questions JCSD

 
Inter-CSD Movement

This takes place between Trinidad & Jamaica and Barbados.  This is the movement of shares between depositories which allows an individual or company who has an account with at least two depositories to request a transfer of shares from one depository to the other. This allows Clients to take advantage of market opportunity across borders.

Withdrawal

Street-name refers to when securities are kept on behalf of investors in the name of the JCSD.  Keeping the security in street-name allows for a shorter settlement cycle.

Step 1:  The shareholder has to complete a transfer form which he receives from his stockbroker. When completed, this form comes to the JCSD with a letter from the stockbroker requesting a physical certificate

Step 2:  The JCSD withdraws the units from the client’s account and sends a certificate in its name along with the transfer to the registrar.

Step 3:  The registrar makes out a certificate in the client’s name and sends it back to the JCSD. The JCSD then sends it to the broker so that this can be forwarded to the client. Other Services: Audit Confirmation

Companies and other account holders may request that the JCSD provide independent confirmation of account balances to third party. This audit confirmation states the number of shares owned by the account holder and the current value as at a specific date.

Pledging

The JCSD has an agreement with some lending institutions. These are institutions such as credits unions and some banks etc. These are called pledging institutions. Our agreement with them states that your shares can be used as collateral against a loan. It is the client’s responsibility to find out if a lending institution has this agreement with the JCSD.

Step 1:  The client receives a pledge form from the stockbroker in quadruplet, that is four copies. The information contained in the form includes: the client’s name, The Client’s JCSD Account Number, the name of the Pledge Company, Name of Joint holders (if any),Number of Shares to be pledged. This is filled out by the client.

Step 2:  After the Pledge Form is filled out, one copy is retained by the client, one copy is retained by the JCSD, one copy is retained by the Stock broker and one copy is sent to the lending institution.

Step 3:  The stockbroker will write a letter to the JCSD requesting that the shares be pledged. The JCSD does the processing and pledges the client’s shares on its computer system.

Step 4:  The lending institution then receives a letter from the JCSD copied to the client and the stockbroker. This letter indicates that the shares have been pledged in favour of that lending institution.

Step 5:  The pledged shares cannot be sold at all until the lending institution has been re-paid in full by the client. The lending institution will notify the JCSD that the loan has been re-paid. When repayment is complete the client can then have access to sell these shares.

 

Notification of Bonus

As with the Notification of Dividend, the JCSD confirms its sharebook balance with the Registrar. The Registrar then sends the JCSD a physical certificate for the bonus amount. The JCSD will then update the individual client accounts with the new share-ownership as at the bonus date. The bonus shares is reflected in the statements sent to all clients by the JCSD.

Dividend Notification

As with the Notification of Dividend, the JCSD confirms its sharebook balance with the Registrar. The Registrar then sends the JCSD a physical certificate for the bonus amount. The JCSD will then update the individual client accounts with the new share-ownership as at the bonus date. The bonus shares is reflected in the statements sent to all clients by the JCSD.

How do I Deposit my share certificates in the JCSD?

Step 1:  Organize all the share certificates that you have in your possession.  Take them to your stockbroker/customer service representative

Step 2:  Your stockbroker/customer service representative will give you a Transfer Form. This Form has all the relevant information that is on your share certificate.

What is the purpose of this form? This Transfer Form formally transfers the shares that are currently in your name into the name of the JCSD. (Street Name)

Step 3:  The Form goes to the Registrar who confirms that the certificates are valid and transferable by sending the JCSD a certificate in the JCSD’s name.

Step 4:  The JCSD then credits the client’s account with the number of units that had been sent for transfer.

Step 5:

  • Overview of Services
  • After the transfer is effected, the client will receive a statement of his standing from the JCSD. Henceforth, periodically,an account holder will receive a statement of his account.
  • Participating financial institutions accept shares lodged at the JCSD as collateral for loans
  • The movement of securities between stockbrokers.
  • Statements are provided at regular intervals.
  • JCSD submits record date information to registrars for them to generate and mail dividend cheques to JCSD clients.
  • JCSD clients receive bonus allotment credited immediately at the close of business at record date
Where do I get more information?

Please call your investment advisor at your investment firm. He or she can provide you with more information. Or you may contact us.

 

Is there anything else I need to know?

In conducting business with your investment firm, certain basic rules will remain the same. Confirmation of all trades will continue to be issued immediately to provide the earliest possible documentation on each transaction. However, like today, trade confirmations are not invoices. Official settlement will take place no more than five business days following a trade, and not upon receipt of the confirmation. Securities bought are yours as of the trade date and, conversely, securities sold are the property of the purchaser as of that date. Physical certificates will still be available to those who want them. However, you may want to talk to your investment advisor about putting in place appropriate procedures to ensure your certificates can be delivered within the reduced five-day settlement cycle. The JCSD will be able to confirm how many shares are being held for you in the depository by a participant.

 

What if my investment firm goes bankrupt?

Investors should be aware that their securities are safeguarded by being held in “,segregation”, by their brokerage house. This means that they are held separate and apart from those belonging to the broker/custodian and cannot be used by the broker/custodian in his day-to-day business operations. If your securities are segregated at your investment firm and it goes bankrupt, your securities must be returned to you by the receiver or trustee. You are also protected under civil law and by the Compensation Fund administered by the Jamaica Stock Exchange specifically for that purpose subject to the provisions of the Securities Act 1993. In addition, the Council of the Jamaica Stock Exchange monitors the financial situation of all brokers.

 

So what are the advantages of the keeping securities in ‘Street Name’? 

Safety and convenience. Letting your investment firm protect your securities is by far the safest choice you can make. With the assistance of the Jamaica Central Securities Depository you will be assured of the safety of your investment. The risks to the safety for your certificates will significantly decrease as no physical movement of your securities will be necessary. All that changes is an entry in the JCSD’s book of record showing who owns the shares and bonds and who owes money to pay for them. That’s also convenient when you need to buy and sell quickly.

 

Why shouldn’t I keep my securities at home?

Securities certificates kept at home, even in a ‘safe place’, are always in danger of begin lost, misplaced, stolen or destroyed by fire, water or other household accidents. In addition, you have to worry about the hassle of making sure you can get them to your investment firm quickly when you want to sell them. Whether this is done in person or by mail, it’s time-consuming and potentially costly. If you can’t find the certificates or if they get lost in transit, you must get a duplicate certificate. In other words, your securities are at risk.

 

What do you mean by keeping securities in ‘Street Name’? 

Internationally, most people who own securities today don’t physically hold the stock or bond certificates. Instead their securities are kept on their behalf by their investment company which is called keeping securities in “street name”. The investment firms will deposit your share and bond certificates with the Jamaica Central Securities Depository Limited which on settlement date (T+2), will electronically settle all purchases and sales of shares and bonds without physically moving the certificates.

 

What is the advantage for me as an investor? 

In 1987 regulators worldwide decided there was need for stronger measures to reduce risks and promote safety and soundness in the market place. Since 1991, an international committee of regulators has been examining shortening the settlement cycle, among other initiatives, to achieve this goal. Even though our market is safe, the regulators and securities firms operating here want to do everything possible to ensure it stays that way. To achieve even better efficiency, our shift to a shorter settlement cycle in Jamaica, moves us closer to the international standard which is T+2. A number of advanced markets are contemplating moving to T+1 since 2004. As of December 8, 2017, the Jamaica Stock Exchange has decided to move the stock market to a T+2 settlement cycle. T+2 means “,trade day”, + 2 business days. With a T+2 settlement cycle buying clients will be expected to pay for their purchases before T+2, that is, so that within two days after the trade had been effected. On the sell side, clients can expect to receive payment on T+2, that is on the second day after trade had been effected.

 

Why is this settlement cycle being shortened?

In 1987 regulators worldwide decided there was need for stronger measures to reduce risks and promote safety and soundness in the market place. Since 1991, an international committee of regulators has been examining shortening the settlement cycle, among other initiatives, to achieve this goal. Even though our market is safe, the regulators and securities firms operating here want to do everything possible to ensure it stays that way. To achieve even better efficiency, our shift to a shorter settlement cycle in Jamaica, moves us closer to the international standard which is T+2. A number of advanced markets are contemplating moving to T+1 since  2004. As of December 8, 2017, the Jamaica Stock Exchange has decided to move the stock market to a T+2 settlement cycle. T+2 means “,trade day”, + 2 business days. With a T+2 settlement cycle buying clients will be expected to pay for their purchases before T+2, that is, within two days after the trade had been effected. On the sell side, clients can expect to receive payment on T+2, that is on the second day after trade had been effected. This change is consistent with the JSE’s objective of providing Jamaican investors with a stock market which conforms to international standards.

 

How does the JCSD work? 
  • Clients deposit their certificates with the JCSD through a stock-broker.
  • The JCSD registers these stocks in the name of the JCSD.
  • The JCSD records the movement of shares among participating firms.
  • The JCSD will credit and debit each account using the book-entry system.
  • What do you mean by ‘settlement cycle’?

When a trade takes place, there’s a buyer and a seller. The buyer has to pay for the stocks purchased and the seller has to deliver the stocks sold. This is referred to as a “,settlement cycle”.

What are the Divisions of the JCSD? 
  • Equity Operations
  • Registrar Services
  • Trustee Services

 

I want to authorize another person to deal with my shares. Do I have to report this to anyone?

Yes. You will have to execute a Power of Attorney in favor of the concerned person and submit a notarized copy of the same to the relevant Registrar and Transfer Agent for registration. After scrutiny of the documents the Registrar will inform you further.

 

I am holding more than one account in the same name. Can I consolidate these accounts? 

Yes. If your holdings are kept in physical form, please forward the share certificate(s) relating to those accounts which you wish to merge to the relevant Registrar, Transfer and Capital Distribution Agent and they will communicate with you further. Please note that the accounts to be consolidated should be in the identical name or in the same order of identical names (in case of joint-holdings) and bear the same address. If your holdings are kept in electronic form, please contact your stockbroker for assistance.

 

I wish to split/consolidate my share certificates into marketable lots. What is the procedure that i should follow?

Please forward your share certificates along with a request letter signed by the registered shareholder/s and we shall split/consolidate the share certificates accordingly. There is nothing like marketable lots as the trading in now carried out in demat form only.

 

What action should I take if I find the original share certificate, which I had reported to be lost to the company? 

Please surrender the original share certificate to the relevant Registrar, Transfer and Capital Distribution Agent immediately if the duplicate share certificates have been issued.

I have lost my share certificates. How should I proceed to obtain duplicate share certificates?

If you believe you do not have all your share certificates, you may write to the Registrar, Transfer and Capital Distribution Agent with relevant particulars like account number, concerned certificate (if known), etc., and they will write to you advising you of any further action or documentation that would be required to re-issue the amount due to you if any. If the Registrar, Transfer and Capital Distribution Agent is the JCSD please print and complete our Form of Declaration and Indemnity. The form can be submitted through your Stockbroker or directly to the JCSD.

Can I authorize my bank or any other person to receive dividends on my behalf

Yes. You will have to write to the relevant Registrar, Transfer and Capital Distribution Agent for the company, furnishing them with your payment instructions. If the Registrar, Transfer and Capital Distribution Agent is the JCSD please print and complete our Client Account Maintenance Request Form. The form can be submitted through your Stockbroker or directly to the JCSD.

In order to protect against fraudulent encashment, I want my dividends to be sent directly to my bank account. What is the procedure that I should follow?

If you are holding shares in physical form, please write to the Registrar, Transfer and Capital Distribution Agent for the company and they will advise you accordingly. However, if you are holding the shares in demat form, such details will have to be given to your Depository Participant with whom you have a demat account. Your Depository Participant in turn will pass on this information to the JCSD. This is in accordance with depository regulations.

 

Can I claim the old dividends relating to past years that have not been received by me?

Yes. If you believe you have not received all dividends paid by a company, you may write to the Registrar, Transfer and Capital Distribution Agent with relevant particulars like account number, concerned dividend, etc., and they will write to you advising of the status of the dividend payment (e.g. if it remains unpaid on the records) and advise you of any further action or documentation that would be required to re-issue the amount due to you if any.

 

I have not received my dividend. What action do I take?

Please write to the Registrar, Transfer and Capital Distribution Agent of the company furnishing the particulars of the dividend not received and also quoting your account number. They will check records and advise accordingly. Please see the details of all Registrars, Transfer and Capital Distribution Agents for all listed companies [insert link].

 

If the shares are dematted, what is the procedure for change of address?

Since your Stockbroker maintains your records of dematted shares, you have to inform them about any change in your address. Your stockbroker will then pass on this information to the JCSD so that when any action like dispatch of Annual Reports or payment of dividend etc., is due to be taken by the company, it will be sent to your current address.

 

Can there be multiple mailing addresses for a single account?

No. There can be only one mailing address for a single account.

 

Can Joint-Holders request a change of address?

No. The letter of request will require the signature of the first holder only.

 

If there is a change in my address what is the procedure to get it recorded with the company

Kindly send a change of address letter to the relevant Registrar and Transfer Agent. If the Registrar and Transfer Agent is the JCSD please complete our Client Account Maintenance form and submit with copy Taxpayer Registration Number (TRN) card for all holders whose names are reflected on the account. The records cannot be updated otherwise.

 

The name of a joint holder was included only for convenience by the first holder.  I am the only heir could you transfer the shares in my name as per the will/probate?

As per law, the joint holder is deemed to be having indivisible ownership of the joint property and the company cannot ascertain as to how or why the name was included. As per the company, the surviving joint holders are the only persons recognized as having title to the shares.

 

I have already produced the attested/registered will since getting it probated.  Would it take a long time and money?  Can I avoid that procedure?

You will appreciate that in order to ascertain that the will in question is the last will and testament made by the deceased, it is important that the same is authenticated/probated by the Court. This is to protect the interest of the investors at large and to obviate any future claims/disputes on the same. The procedure therefore cannot be avoided.

 

A and B both owned shares jointly and both of them are now deceased.  How do I get the shares transmitted in my name?

It is best to seek the advice of a lawyer in this regard.

If the deceased family member who held shares i his/her own name (single) had left a will, how do the legal heir/s ge the shares transmitted in their names?

The legal heirs will need to have the will probated so that the named Executor or Executors can be legally appointed to manage the affairs of the Estate. It is best to seek the advice of a lawyer in this regard.

If a shareholder who held shares in his sole name dies without leaving a will.  How can this legal heir/s (either husband/wife/son/daughter, etc) get the shares transmitted in their names?

The legal heirs will need to obtain Letters of Administration so that an Executor or Executors can be appointed to manage the affairs of the Estate. It is best to seek the advice of a lawyer in this regard.

In case of joint holdings, in the event of death of one shareholder.

In case of joint holdings, in the event of death of one shareholder, how do the surviving shareholders get the shares in their names?

If the shares are held in physical form, the surviving shareholders will have to submit a request letter supported by an attested copy of the Death Certificate of the deceased shareholder and the relevant share certificates to the relevant Registrar and Transfer Agent. The Registrar will advise if any other information or documents are required. Otherwise, on receipt of the said documents the name of deceased shareholder will be deleted from its records and the share certificates will be returned to the applicant/surviving registered holder with necessary endorsement. If the shares are held in demat form, the surviving shareholders will have follow the same process; the documents however will need to be submitted to the JCSD through their stockbroker.

What are the chances of any fraud/disputes in using a Demat account?  Home should I approach in such cases?

Common risk factors applicable to trading in physical shares like mismatch in signatures, loss in postal transit, etc., are absent since the dematted shares are traded electronically by your stockbroker. However, in the unlikely event of any other dispute, then you will have to approach the Jamaica Stock Exchange or JCSD for assistance with resolving such issues if necessary.

 

How do I get my dividends on Dematted shares?  Will I get the annual report after I demat my shares, and would I be able to attend the AGM?

The JCSD will provide the relevant Registrar and Transfer Agent with a list of demat account holders and the number of shares held by them in electronic form on the Record date. On the basis of beneficial ownership, the Registrar and Transfer Agent will issue dividend cheques and warrants in favor of the demat account holders. The rights of the shareholders holding shares in demat form are at par with the holders in physical form. Hence you will be eligible to get the Annual Report and will have the right to attend the AGM as a shareholder.

 

Is it a fact that shares listed on the Jamaica Stock Exchange are to be traded compulsorily in demat form?  Do I have the option of holding them in physical form?

Yes. The shares of the company are to be compulsorily traded in demat form.

What are the charges to be paid to demat one’s physical shares?  Will the company pay it or do I have to pay for it?

The charges for demat have to be borne by the shareholder. The charges differ from stockbroker to stockbroker and therefore you will have to contact your stockbroker for the same.

Once my shares are dematted, can I ever get them covered into physical shares?

If you are holding shares in electronic form, you still have the option to convert your holding in physical form by submitting a Withdrawal Request (WR) and completing a Form of Transfer through your Stockbroker in the same manner as Dematerialization. Upon receipt of such request and Form of Transfer from your Stockbroker, the JCSD will submit the transfer document to the relevant Registrar and Transfer Agent who will issue share certificates for the number of shares so rematerialized.

I purchased shares before June 1, 1998 and have the physical certificates in my possession.  How do I get them registered with the JCSD?  How long will it take for the shares to be registered?

You will have to take your certificate(s) to the Stockbroker of your choice. Your broker will then assist you with opening an account with the JCSD and thereafter submit your completed transfer documents for processing on your behalf. The JCSD will then forward your documents to the relevant company’s Registrar and Transfer Agent for verification and processing. Once the shares are transferred by the Registrar and Transfer Agent, your account with the JCSD Equity Services Division will be updated accordingly. The recommended Best Practices requirement of the JCSD is a five working day turnaround time, from the date of receipt of the transfer documents and receipt of a nominee certificate from the relevant Registrar and Transfer Agent.

 

How does the depository system operate?

The operations in the Depository System involve the participation of a Depository, Depository Participants, Company/Registrars and Investors. The company is also called the Issuer. The Jamaica Central Securities Depository Limited (JCSD) is an organization like a Central Bank, i.e. Reserve Bank where the securities of an investor are held in electronic form, through Depository participants. A Depository Participant is the agent of the Depository and is the medium through which the shares are held in the electronic form. They are also the representatives of the investor, providing the link between the investor and the company through the Depository. To draw analogy, the Depository system functions very much like the banking system. A bank holds funds in accounts whereas; a Depository holds securities in accounts for its clients. A bank transfers funds between accounts whereas; a Depository transfers securities between accounts. In both systems, the transfer of funds or securities happens without the actual handling of funds or securities. Both the banks and the Depository are accountable for safe keeping of funds and securities respectively.

 

What is dematerialisation and what are its benefits?

Dematerialization (‘Demat’ in short form) signifies conversion of a share certificate from its present physical form to electronic form for the same number of holdings. Only when your shares are dematerialised with the Jamaica Central Securities Depository Limited (JCSD) can you trade your shares on the floor of the Jamaica Stock Exchange. Other stock exchanges in the region follow similar processes. Dematerialization facilitates paperless trading through state-of-the-art technology, whereby share transactions and transfers are processed electronically without involving any share certificate or transfer form after the share certificates have been converted from physical form to electronic form. Demat attempts to avoid the time consuming and sometimes complex process of getting shares transferred in the name of buyers as well its inherent problems of bad deliveries, delay in processing/fraudulent interception in postal transit, etc. Dematerialization of shares is optional and an investor can still hold shares in physical form. However, he/she has to demat the shares if he/she wishes to sell the same through the Stock Exchange. Similarly, if an investor purchases shares, he/she will get delivery of the shares in demat form only.

 

I have lost/misplaced my share certificates.  What are the steps that I should take to obtain duplicate share certificates?

Please contact your Stockbroker about the loss of share certificate(s) quoting your account number and details of share certificates if available. You and all joint holders will then need to complete a Bond of Indemnity allowing the relevant Registrar and Transfer Agent to issue replacement certificates. Each certificate reported lost/misplaced will be replaced. Before submitting the completed Bond of Indemnity for processing, you must affix a Twenty Dollar stamp to cover stamp duty.

I want to add another joint-holder name to my shareholding.  What is the procedure that I should follow?

 

The procedures for such an addition of name amounts to a change in ownership of shares, and the procedure for transfer of shares has to be followed. For some listed companies, only the current owner(s) of the shares need sign the Transfer Form; you therefore have to go to the Stockbroker of your choice who will be able to assist you in this regard

 

I would like to make a gift of some of my shares to my children/relatives.  How do I get them registered in their names?  Does it involve stamp duty?

The procedure of registration of shares gifted is same as the procedure for a normal transfer. If you already have a Jamaica Central Securities Limited Depository Account, you may visit your broker who will be able to assist you with opening another account reflecting the names of your children/relatives and having the shares reflected in that account. This transaction would not attract stamp duty, and your Stockbroker will advise you of all other relevant charges. If the shares are not listed on the floor of the Jamaica Stock Exchange and you have your certificates in your possession, you may go to the Stockbroker of your choice for their assistance in having the transfer form completed and processed at the Tax Office before being submitted for processing to the JCSD Registrar Services Unit.

How do I complete a transfer form?

The transfer form must at least be signed by the person(s) whose name(s) appear on the share certificate(s) and therefore on the Register of Members. In cases where a beneficial holder is a company, the transfer form must be signed under the common seal of the company. If not, evidence must be given /provided along with the transfer form and certificates that the person or persons signing the transfer on behalf of the company has the express or implied authority of the company to transaction business on behalf of the company. All signatures must be properly witnessed. Your stockbroker or investment advisor will be able to provide any further assistance needed to complete the form.

 

What is meant by the “Transfer of Shares”

 

The names of all persons and companies, who have bought shares in a company, are recorded as shareholders on a Register of Members. Once the name of a shareholder is recorded on a Register, the shareholder is seen as the ‘beneficial’ owner of the shares. As a shareholder, you can sell all or some of your holdings or you may wish to make a gift of some shares to your children/relatives. This will constitute a change in beneficial ownership. When changing the recorded beneficial ownership of shares, shareholders must complete a transfer of shares which can be done by completing a Transfer Form – obtainable through any stockbroker – and submitting the completed Transfer Form along with all share certificates to their stockbroker.

 

How many persons can be reflected on a share certificate?

 

You may own shares in your name only (sole ownership) or own shares jointly along with up to three other persons (joint ownership). When you own shares jointly with others, all correspondence in respect of the shares will be sent through the post directed to the registered address of the holder who is the first named on the register of members.

 

What are Share Certificates?

Once you have purchased shares in a company, you become part owner of that company. If you purchased your shares before June 1, 1998, you should have received from your broker a share certificate showing the number of shares (also referred to as units) in the company. Over the years, the company in which you invested may have issued additional shares usually referred to as “Bonus Units”. This means that you may have received additional share certificates reflecting the new shares issued to you by the company. Your share certificate is the Title given to you to prove your ownership in a company; not unlike the Title to your house or motor vehicle. It is an important document that is to be kept in a safe place as you cannot sell your shares without your certificate. The safest place for your certificates is with the Jamaica Central Securities Depository Limited.