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JSDA Council Bulletin (October 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 Presidentís Desk
Market Analysis
The market committee has generated a market analysis report highlighting the yield curve developed from information gathered on October 8, 2004, demonstrating the returns investors were desiring on the instruments offered. A summary of recommendations were presented regarding medium and long term bonds as follows:
  Market Recommendation
Average Tenor 4.5 5 years
Average Fixed Interest Period 3.75 3 months
Average Interest for fixed Period 15.25 WATBY + .50%
Average Margin 2.00 2%
  Market Recommendation
Average Tenor 13.7 14 years
Average Fixed Interest Period 4.2 3 months
Average Interest for fixed Period 15.80 WATBY + .50%
Average Margin 1.88 2
Financial Services Commission
The Financial Services Commission (FSC) is urging the submission of the Immobilisation Report from Securities Dealers. Members have related however that the task is onerous and have highlighted the challenges involved in developing a programme to comply with the FSCís requirements. It was agreed that the JSDA will attempt to establish new timelines with the FSC regarding submission of the data. Council has expressed concern regarding the FSCís Guidelines for Interim Capital Standards and Margin Requirements for Repurchase Agreements. Members agreed that discussions should continue with the FSC concerning relating capital to size of business conducted and that Unit Trust instruments should have no tax advantage over Mutual Funds. A committee comprising Mr. Christopher Williams (chair), Mr. Garfield Sinclair, Mr. Charles Ross, Mrs. Lisa Gomes and Mrs. Janice Robinson was formed to review transitional arrangements available to Dealers and propose alternatives. Council questioned the practicality of the guidelines presented by the FSC on Audit Committees and noted that it would be difficult for small securities dealers to mobilise the necessary resources and attain the required independence as outlined in the document. It was noted that the FSC required that the JSDA submit specific comments on the document by November 25, 2004 A committee comprising Mrs. Lisa Gomes, Mr. Devon Barrett and Mrs. Janice Robinson (chair) was asked to utilise in-house resources to examine the document and relay findings to Council.

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