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JSE online trading platform coming

Published:Tuesday | February 17, 2015 | 12:00 AM
Marlene Street Forrest, General Manager of the Jamaica Stock Exchange.

Jamaica Stock Exchange (JSE) predicts that its new online trading platform, set for possible launch in April, will eventually grow trading volumes by 10 per cent.

The online portal, said JSE General Manager Marlene Street Forrest, will be available to users at the beginning of the second quarter and "more likely within the month of April."

The portal is expected to open access to the market and broaden the base of persons who can trade stocks to include individual professionals and students, as well as Jamaicans residing overseas, said Street Forrest.

The platform is being developed by JSE's technology partner Software Architects Limited.

Registration for the trading portal is free.

While she has declined to outline the dollar amount being invested, Street Forrest had earlier said new products and services to be rolled out by the exchange this year would cost US$590,000 ($68 million).

The exchange processed some 20,000 transactions last year, representing volumes of 2.7 billion units and value of $14.8 billion.

Street Forrest said that with online trading, volumes are expected to grow by five per cent in one year and "in the medium term, contribute to over 10 per cent of trading volumes."

"A quick examination of online trading shows that there is a slower uptick in the early stages but that there is exponential growth," she adds.

All the products on the JSE indices that are denominated in Jamaican dollars will be permissible for trading - which covers the JSE main, junior and bond markets.

Use of the online platform will be open to "any investor who has registered online, has an account with the Jamaica Central Securities Depositary, and with a broker.

"The requirements for opening an account under normal circumstances will not change, therefore, the (know-your-client) checks, regulatory framework, and procedures have not changed," said the JSE head.

The fees for trades on the online platform are no different from those charged when a broker inputs an order.

Street-Forrest said that "fees in relation to utilising the online trading platform is no different from those in which the broker inputs the order".

The JSE charges 0.25 per cent of the value of the transaction. That fee is applicable whether the trader is buying or selling stock. Additionally, settlement fees for each trade start at $110 and range(s) higher, depending on volume. The settlement fee is payable to the JCSD.

JSE expects the online trading platform to pay for itself within six years.

"If more persons trade in securities and there is a greater pool of persons interested in the market, by extension, trading and settlement revenue would be increased. We see this as one strategy to grow the business of the exchange," she said.