Sun | Apr 22, 2018

Oran Hall | Investing in Jamaican stocks from the US

Published:Sunday | February 4, 2018 | 12:00 AM
In this July 5, 2016 Gleaner photo, Information Technolgoy Manager at the Jamaica Stock Exchange, Suzette McNaught, demonstrates the new JSE Mobile App on an iPad. The JSE's mobile platform is one route through which foreigners can trade stocks on the Kingston exchange.

QUESTION: I live in America in Columbus, Ohio, and I am interested in investing on the Jamaica Stock Exchange. Where do I get started?

Jourdin

FINANCIAL ADVISER: You first need to make contact with a stockbroker. Thereafter, you may trade by giving instructions to your broker by a means convenient to you or you may trade online.

There is little difference between a Jamaican resident and a non-resident buying stock in Jamaica, and pretty much the same rules and processes apply regardless of the stock being bought. To get a list of the stockbrokers, you may go to the website of the Jamaica Stock Exchange www.jamstockex.com.

To open an account, you should complete a client agreement form which is available online. The form must be printed and sent to the brokerage house with an original signature. The following are also required: a notarised copy of the investor's identification, two references, proof of address, and a copy of the social security card for United States residents or social insurance card for Canadian residents.

 

ONLINE TRADING

 

Online trading is the buying and selling of securities via the Internet. The JSE online trading platform allows investors to enter orders directly to the JSE trading system via an online platform. All investors must have a relationship with a broker to participate in online trading, meaning that a broker must open the account; thereafter, investors are able to enter transactions online, but they are routed through the broker.

In addition to the account with the broker, all persons desiring to trade in stocks must have an account with the Jamaica Central Securities Depository, the JCSD. A JCSD account is an electronic account for holding securities on behalf of an investor. Investors should consult their broker to learn what is required to open a JCSD account.

Investors can make a request to open a JCSD account by way of the Internet after completing the registration process. They can begin to trade after the broker has set up the JCSD account and, in the case of online trading, after the account has been added to the online platform. Investors who previously had a JCSD account can use it for online trading.

A JCSD account is usually opened within 72 hours of the investor submitting the required documents to the broker, but the account does not become active until the broker submits the required documents to the JCSD.

 

DAYS FOR TRADING

 

Trading takes place on the JSE Mondays to Fridays between 9:30 a.m. and 1 p.m. on a computerised platform, and it is advisable to put all instructions to your broker in writing and to monitor your account regularly. Online traders may, however, place orders seven days per week.

Funds must be in the investor's broker account before the investor can trade online. Investors are able to request funds from their broker account via the online trading platform. Funds may be requested and released as required. Other account holders are usually required to make a deposit prior to their orders being executed.

To discontinue using a JCSD account for trading online, investors may submit a request to their broker via the platform and are notified by the broker when the process is completed.

Investors can buy and sell any security that is traded in Jamaican dollars on the JSE and can buy or sell a minimum of 100 units of ordinary stock and 1,000 units of bonds. Trading is done in Jamaican dollars.

Investors get confirmation after a trade has been done. For online traders, a confirmation page is displayed with the trade details, and a contract note is prepared and sent by the broker to the investor. All trades are final so investors cannot request a change to their orders after they have been executed.

 

TRANSACTION SETTLEMENT

 

Settlement of a transaction should be made two business days from the date the trade was done. To pay for securities purchased online, the account established by the investor with the broker is debited with the full cost of the purchase.

To receive the proceeds from the sale of securities, the investor's online fund account is updated with the proceeds from the online sales or the investor may submit a request to the broker to withdraw funds if required.

Although you live in the United States, there are two convenient ways to engage with the Jamaica Stock Exchange.

- Oran A. Hall, principal author of 'The Handbook of Personal Financial Planning', offers personal financial planning advice and counsel. Email finviser.jm@gmail.com