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JSDA Council Bulletin (June 01, 2004)

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
Fsc Draft Guidelines
The President advised Council that the JSDA’s recommendation to cap the margin requirement on approved repurchase contracts at 5%, was given favourable consideration by the FSC. This was with the understanding that during the period, while the industry moves to the 5% level, a suitable set of repo margin provisions would be developed. The FSC did not agree however to replacing the cap on repo obligations with a ratio based on a multiple of capital.
Jcsd – Fixed Income Project
Following a meeting of the committee on the establishment of a Fixed Income Depository, the following were presented as key issues that were discussed and agreed on: the entity should be a separate entity from the equity depository; ownership should be broad based; project management has been weak and there is need for a comprehensive business plan; there is need for independent valuation of existing work done.
Market Analysis
Mr. Ian Kelly, reporting on the findings of the Market Committee advised the Council that there was need for a credible pricing mechanism which should form the benchmark for the yield curve. He further advised that the trend in the market leaned towards medium term (4 – 6 yrs.), variable rate instruments. It was noted that there was a great demand for US dollar instruments/Indexed bonds. Mr. Kelly asserted that there is a need for attractively priced JA dollar fixed rate instruments for tenures of 8 – 10 years. It was agreed that a mechanism for tracking trade data with a template that captures the pricing of actual trades and class of securities should be developed.
Provisional Collection Of Tax Order
In response to a letter sent to the Ministry of Finance and Planning regarding the recent amendments to the legislation governing Long-Term Savings Accounts, and following a subsequent discussion between the President and the Minister, the Minister advised that a meeting will be convened with the industry to discuss the matter.
Withholding Tax Refund
Members continue to experience excessive delays in the processing of their withholding tax refunds. It was agreed that a letter outlining the process and requesting the assistance of the Minister of Finance and Planning would be prepared for submission.

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