The Chairman’s Presentation for JSE’s Public Education Outreach at the Terra Nova Hotel
The JSE has enjoyed vibrant growth since its inception on August 14, 1968 when it was incorporated as a private limited liability company. Trading began in February 1969 with 34 companies being listed and since then the Stock Exchange has not only grown in size, depth and complexity, it has yielded outstanding returns to investors, provided a viable means of raising capital for issuers and has become entrenched in the Jamaican society.
On this, the eve of the JSE’s 40th anniversary, embarking on the formal separation of its two primary areas of operations might be considered one of the most important phases of the JSE’s development to date. You might be asking why this is so important. The answer is simple – to ensure greater transparency and with transparency comes equity and trust. Hence the Board of the JSE believes that in its continuing pursuit of transparency, fairness and efficiency, which have always been the guiding principles of the exchange, the regulatory arm should now report directly to the Independent Board of Directors.
Let me pause here to explain to you the structure of the present Board. The Board comprises a representative from the 11 broker members, namely:
· Capital & Credit Securities Limited,
· NCB Capital Markets Limited,
· Dehring, Bunting and Golding Limited,
· Victoria Mutual Wealth Management Limited,
· Barita Investments Limited,
· Mayberry Investments Limited,
· First Global Financial Services Limited,
· MV/L Stockbrokers Limited.
· Stocks & Securities Limited,
· JMMB Securities Limited, and
· PanCaribbean Financial Services Limited
There are also five independent members who are appointees each from:
· the Ministry of Finance,
· the Bank of Jamaica,
· the Private Sector Organization of Jamaica,
· the Institute of Chartered Accountants and
· the Bar Association of Jamaica.
The new structure will see the regulatory function of the JSE, which currently resides within the Marketing Operations and Trading Department (MOT), separated and moved under the ambit of a new Regulatory Department. This Department will be headed by Mr. Wentworth Graham, who boasts over a decade of experience in the industry, in the new role of Chief Regulatory Officer. This Chief Regulatory Officer will report directly to the five independent members of the Board, who will be hereafter called the Regulatory Committee, and their decisions shall be binding on the Board of Directors of the JSE. It is perhaps worth noting that the Internal Auditor already reports to an independent Audit & Finance Committee of the Board and will continue to do so in the new dispensation. We are confident that these measures will maintain and even improve on the JSE’s standard of excellence in the regulation and supervision of the market.
The reconstituted Market Operations Department will fall under the Deputy General Manager of the Exchange and continue to focus on ensuring that the trading platform is operationally efficient and accessible to market participants. This and other departments of the JSE such as Human Resources, Accounts and IT will continue to report to the full JSE Board through the General Manager and concentrate on the JSE’s strategic goals of growing core business and enhancing shareholder value.
The Jamaica Stock Exchange has great confidence in embarking on this path. This is not a new phenomenon Ladies and Gentlemen, because it has been successfully achieved by many exchanges around the world including the New York Stock Exchange. We are only taking a tried and proven leaf from their book. Ladies and Gentlemen when I became Chairman of the Jamaica Stock Exchange in 2007, part of my mandate was the separation of the Regulator and Commercial arms. I am pleased to inform you that will be in place by April 2008.
There are exciting times ahead in the market and there are even greater opportunities for wealth creation for industry players, the general business community and ultimately the Jamaican economy. We look forward to doing our part in providing a fair, efficient and transparent stock exchange as an integral part of the growth of the capital market.
