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Untitled Document

JSDA Council Bulletin (September 01, 2005)


In an effort to promptly disseminate to our members, information on critical issues in the securities sector, we have developed a Bulletin. This will be a monthly publication highlighting issues from our Council Meeting. We hope you will find this useful and we look forward to your feedback. From the President’s Desk
 
Jsda Budget & Strategic Document For administrative Year 2005/2006
The general membership of the JSDA was invited to September’s Executive Council Meeting. The revised JSDA Budget for the Year 2005/2006 was presented with an allocation for public relations and the construction of the JSDA website. The budget reflects a shortfall which is expected to be funded by the sale of banners on the website to individual member institutions. The Strategic Document for the administrative year 2005/2006 was tabled for comments. The Document outlines the primary objectives of the JSDA for the coming administrative year as follows:
     
  To establish a regulatory framework on which competitive products can be offered which provide above-average returns to investors.
To advocate for the maintenance of a robust and sustainable business model that promotes the growth and development of the industry.
To work with regulators to develop an efficient capital market through the introduction of prudential requirements related to capital adequacy and appropriate risk management.
To enhance the image of the industry through the implementation of a comprehensive public relations programme.
 
 
Jsda Public Education Initiative
Council agreed to engage a Public Relations professional to assist with the writing of the JSDA articles for the public education programme. It is anticipated that ten (10) JSDA articles will be published during the 2005/06 administrative year.
 
Fixed Income Project
The JSDA will invite representatives of the JSE/JCSD to attend the October Council meeting to address matters relating to the Fixed Income Depository Project.
 
Market Analysis Report
The yield curve below is based on information gathered from nine (9) market players:
 
 

COMPOSITE

13.67%

13.84%

14.12%

14.82%

17.95%

The market sounding sub-committee has reported that the market is now beginning to see an increase in activity as it relates to secondary market trading in both Jamaican and US dollar instruments. The focus continues to be on Variable Rate securities, as industry players seek to position their portfolios to take advantage of any adverse interest rate changes that may arise from our very dynamic marketplace.
       
Recent and Current Issues
August 17, 2005      August 10-12, 2005
       
GOJ LRS 2011 AE 2015AA VR Inv. Bond 2009/10 R
Tenure   -6 years 10 years  4 years           
Maturity date -August 19, 2011 August 19, 2015 August 10, 2009
Coupon -13.95% 14.24% 13.10%
Average Yield -14.50% 14.83% 1.50% WATBY
Range -14.20% - 14.80% 14.65% - 15% Semi
Int. Pymnt. Freq.             -Semi Semi $4.06B
       
Sept 7 – 9, 2005    

LRS AUCTION – Sept 14, 2005

       
GOJ VR Invmt Bond 2008/2009 S   LRS 2009 AM            LRS 2012 AE
3 years   4 years

7 years

Sept 9, 2008   Sept 16, 2009 Sept 14, 2012
13.05%   13.75%  14%
1.50% 3 month WATBY      
Quarterly   Semi Semi
$2.77 billion   $600 million $300 million
(undersubscribed)      
  Results 14.30101% 15.18616%   (AY)
 
Consultancy For Capital Adequacy Standards
The Secretariat has submitted an application to the JAMPRO Private Sector Development Programme for funding assistance to engage the services of a consultant to research and develop an appropriate framework for Capital Standards. The programme requires counter party funding and will only provide for 75% of the cost of any project with a maximum amount of J$5.7m. The fund will not provide for GCT charges and requires an international bidding process.
 
Financial Services Commission
The JSDA Officers have met with Mr. George Roper of the FSC. Discussions at the meeting surrounded the Caribbean Securities Regulators Conference being hosted by the FSC, the JSDA’s objectives for 2005/06 and JSDA responses to FSC’s papers. Mr. Roper outlined four (4) discussion papers (The Concept of “Qualified Investor” and its Importance to Jamaica’s Capital Markets, A Recommended Financial Disclosure Standard for Securities Dealers, Reshaping the Public Disclosure Framework – Regulation and Sustainable Embrace of Best Practice and Guidelines for Regulatory Oversight of Credit Rating Agencies) issued by the FSC and invited the JSDA to review and comment on the documents. The Secretariat will establish sub-committees to review and generate comments on the discussion papers. Mr. Lance Hylton of MF&G was invited to the meeting to present his professional assessment on the FSC Discussion Paper on Proposed Amendments to the Securities (Mutual Funds) Regulations. He expressed the opinion that, currently, Jamaica is not in a state of readiness to facilitate a mutual funds industry based on locally created funds and that there is no reason why a viable industry based on funds created overseas but registered locally could not be developed. He also opined that several sections of the Act were inconsistent with the legal needs, concept and practical operation of a mutual fund. Mr. Hylton was subsequently requested to draft a response to the FSC on behalf of the JSDA.
 
Integration Of The Jsda & The Primary Dealers Association
Mr. Lissant Mitchell, President, Primary Dealers Association (PDA), was invited to this month’s Council Meeting to discuss an effective method of collaboration between the JSDA and the PDA. Mr. Mitchell advised that the issue had been discussed among PDA members as most of the PDA members are also members of the JSDA. The Officers of both associations will meet to decide on an appropriate framework to facilitate the collaboration and in the interim, Mr. Mitchell will be invited to the monthly JSDA Council Meetings to present a report on the activities of the PDA.
 
Caribbean Securities Regulators Conference
The FSC will be hosting the 2nd Annual Caribbean Securities Regulators Conference on November 7 & 8, 2005. The JSDA has been requested to participate and also to provide sponsorship for the closing dinner of the conference. Mr. Duncan will negotiate the terms for sponsorship by the JSDA.
 
National Youth Service Success Camps
Mr. Duncan has advised that the NYS camps were successful and that they are being examined by the Education Unit and the Office of the Prime Minister as possible pilot projects.
 

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