The Jamaica Stock Exchange on Harbour Street, Kingston, is in the process of transforming to a public company with a broad ownership base. - File

The Jamaica Stock Exchange (JSE) has revised to May the launch of its preference share offer which should have opened this month.

The issue is pending approval from the Financial Services Commission (FSC), regulator of the securities market.

As a result, JSE general manager Marlene Street-Forrest said the exchange could not comment on the terms of the offer, how much the exchange hoped to raise nor the plans for the funds, saying it could be seen as 'priming' the market.

The revised date for the issue was announced by JSE chairman Curtis Martin at a public forum last Thursday in Kingston.

"Those preference shares will be listed on the stock exchange, so the stock will be subjected to the same standards that any other listed company has to adhere to," said Martin, "and this is basically the precursor to the exchange becoming fully listed."

Transformation

The JSE is transforming from a mutual company, owned by its members, to a public company to be listed on its own exchange and subject to oversight by the FSC.

Martin said the focus now was to restructure the operations of the exchange to establish a commercial division that would be attractive to investors, separate from the regulatory division which is to be headed by Wentworth Graham, JSE's assistant general manager in charge of market operations and trading.

Martin said the separation of these two functions, which becomes effective April, was an important step for the organisation "to ensure greater transparency" - a move he said would create equity and trust.

Street-Forrest, in the meantime, said the stock exchange should be fully demutualised this year - a first for any stock exchange in the Caribbean. To this end, she said several changes in policies and rules have been initiated.

"We are going to be looking at not only maintaining the investor base, but also growing it and ... we intend to ensure that the commercial arm focuses directly on growing that base," she said. "We intend to increase the number of companies listed and improve market access."

The move to drive listings includes the creation of a JSE Junior Exchange under which small and medium companies, with minimum capitalisation of $30 million, can list.

The junior exchange is meant to be a source of venture capital funding, a market now lacking in Jamaica.

Special reductions

The junior exchange members will pay the same $65,000 fee to list that members of the mature JSE are subject to, but Street-Forrest said the exchange, though it believes the current fee is "not prohibitive," is willing to consider a "special reduction" for the junior listings.

"Our own informal surveys have indicated that there are some constraints in SMEs coming to the main market," said Street-Forrest. "We are confident that we can alleviate these with the imple-mentation of the junior market."

john.myers@gleanerjm.com