Marcella Scarlett, Business Reporter
Mark Croskery, president and CEO of Stocks & Securities Limited, said that the actions by the Financial Services Commission (FSC) to curtail the activities of the brokerage house will not affect any of the business lines at the company.
The regulator's stepped-up monitoring of SSL, he said, is explained by the fact that his company just sold its repo book to JN Fund Managers (JNFM).
Additionally, SSL is in negotiations with 42 investors who are holders of corporate bonds issued by the company to either roll over or pay out the bond, said Croskery, who was unwilling to give details about the instrument.
The bond matures tomorrow, October 31.
The FSC announced a week ago that activities carried out by SSL must get prior approval from the regulator.
The advisory followed the sale of SSL's repo book to JNFM. The deal transferred the business of 500 clients to JNFM. Croskery claims that SSL retains a client base of more than 5,000 - a number that is counter to information from the FSC - and has J$19 billion of assets under management.
He said the reason for selling the repo book to JNFM earlier this year can be found in a statement released to the press and shareholders by SSL, which the CEO says "explains itself".
The statement lists wealth management, investment advisory and custody services as the business lines that SSL continues to offer post September 2, 2013 when the sale of the repo book became effective.
"We hold all client assets which are direct purchases off balance sheet. We hold these client assets in safe custody at Jamaica Central Securities Depository and Overseas Brokers/Custodians," the company said in the statement.
The sale, said Croskery, allowed the company to shed its on-balance sheet repo liabilities.
"In my opinion, as a CEO, it seems we are heading on a good future outlook," he said.
SSL holds a stockbrokerage licence from the Jamaica Stock Exchange and a cambio licence as foreign exchange trader from the Bank of Jamaica.
The FSC's directive "doesn't affect any of our operations, including the cambio operations, because we are doing custody and advisory business and wealth management," he said.
"We have 5,045 clients and we manage J$19 billion. In our opinion, and with our future outlook, which we think is favourable, we think we can get management fees through our financial advisers and managers managing our AUM," he said.
Some 70 per cent of investment portfolio managed by SSL is in fixed income and the other 30 per cent is in equities, he told Wednesday Business.
The FSC describes SSL's remaining client base as small, and comprising mainly large sophisticated bondholders.
Additionally, the FSC, in a press release, had said that the "majority" of SSL's clients were transferred to JNFM and those investors will not be impacted by the FSC's current actions; and that its closer monitoring of SSL was to protect the interest of the bondholders.
Croskery declined to clarify the FSC statements about the company's client base.
"I don't have a comment on that. You can take that up with whomever you want, and you can run your story however you want," Croskery told Wednesday Business, adding however that "there are still some repo clients who are to be transferred" to JNFM.
He also said that not all SSL clients fall into the category of sophisticated investors.
"We have a highly diversified group of clients at SSL. We have over 40 professional staff at SSL, which include sales and non-sales professionals. We have more than 10 licensed dealer representatives," said the CEO.
Subject to board approval, the company may do a media briefing on the status of the company and to further expound on its statement issued last week, Croskery said.