Tue | Oct 17, 2017

Most brokers delay registration for online trading

Published:Sunday | May 10, 2015 | 12:00 AM
File Marlene Street Forrest, General Manager of the Jamaica Stock Exchange ... says broker participation in online trading is a business decision.

Four stockbrokerages have signed up to facilitate trading on the Jamaica Stock Exchange's new online platform, but the other eight are holding back to either finalise due diligence checks on the new system or to ascertain the potential impact on their business.

JMMB, which is among the reluctant firms, told Sunday Business that it has its own trading platform which it considers to be superior.

The new platform commissioned last Wednesday will allow retail trading by investors. It permits the buying and selling of securities, editing of active buy or sell instructions, cancelling active orders and viewing market performance. It also permits investors to view their portfolio, and their current sales and purchases.

Before this week, all trades were done through brokers, from orders to settlement. The new system still requires retail traders to settle transactions through the brokerage houses.

The four brokers who

have registered are Barita Investments, NCB Capital Markets, Sagicor Investments Jamaica, and VM Wealth Management, representing a third of all broker members of the Jamaica Stock Exchange. The others yet to sign on are JMMB Securities, BCW Capital, M/VL Stockbrokers, Mayberry Investments, Proven Wealth, PWL Transition, Stocks & Securities, and Scotia Investments Jamaica.

Scotia Investments is still in review mode, but has signalled that it plans to get on board. assistant vice-president and head of Treasury & Trading, Gregory Samuels, said last Thursday that being a foreign-owned company, its due diligence checks are "much longer and in-depth than a local company".

"There are a lot of protocols; it's just a matter of working through that. So, it's not as if we are not a part of it," said Samuels. "Scotia Investments is a part owner of the JSE, it's something that we endorse. It's just that we are not on board yet because we are looking at the IT interface," he added.

Other companies

As to the other companies to which Sunday Business reached out for comment, CEO of Proven Wealth Limited, Chorvelle Johnson, said online trading represented a "project in itself", which will be tackled by the company later in the year.

In a response issued through its communications department, JMMB Group said Thursday that its own platform has been upgraded and is superior. The platform was introduced a decade ago, via its online transaction system, Moneyline. On March 16 of this year, the service was expanded to allow clients to trade US dollar-denominated shares listed on the JSE.

"It is our understanding that the upgraded feature is not offered via any other online platform in Jamaica," the brokerage house stated.

"As a result of those enhanced capabilities offered on our Moneyline platform, we have forgone participating with the JSE online trading platform, at this time," JMMB said.

General manager of the JSE, Marlene Street Forrest, said at the official launch of the platform last Wednesday that there are no new rules associated with the electronic trading platform, but all participants are required to have a broker to open an account.

Asked for feedback on reasons for the delayed registration by broker members, Street Forrest said that some companies might be examining the need to participate.

"I believe that it is a business decision for them," she said.

There is no fee for registration but brokers will face a "one-time set-up cost of US$1,500", she added.

Client's decision

She said online traders should choose from the brokers who have signed up.

"Always, the decision on a broker is up to the client. Naturally, if a customer feels that he/she is not satisfied with the services offered by a broker he can transfer or move the account. Alternatively, for online trading, the client can open an account with brokers who are online participating brokers. As you know, a client can have more than one broker," said the JSE boss.

VM Wealth, which has signed up, is already pushing the service, saying in a release last Thursday that the JSE online portal offers locals as well as Jamaicans in the disapora the opportunity to trade stocks, options, bonds and other

securities.

"Investors will no longer have to wait until business hours to place an order through their broker but can order at their convenience at anytime, using the online trading platform," VM said.

avia.collinder@gleanerjm.com