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7.Measures To Ensure The Protection
Of Investors In The Eastern Caribbean Securities Market
One of the primary concerns of investors is the security
of their investments. They need positive assurance that their
investments are protected and are safe. In acknowledgement
of this, every effort has been made to ensure that the market
operates under secure conditions.
We noted in a previous column that the dematerialized environment
created by the modern operating infrastructure will result
in the removal of the risks of theft, loss or mutilation of
certificates, and the associated costs, which could result
from movements through and from the registrars.
In addition to this, a sound regulatory structure has been
put in place to ensure that all market activities are conducted
in accordance with international standards of fairness, transparency,
professionalism and integrity.
All participating countries in the Eastern Caribbean Securities
Market (ECSM) are signatories and subject to the Uniform Securities
Act 2001, which designates the Eastern Caribbean Securities
Regulatory Commission (ECSRC), as the regulatory body, charged
with ensuring that the market operates in accordance with
the prescribed rules and regulations. The Commission is responsible
for:
(i) Making rules and proposing legislation
for the regulation of the ECSM,
(ii) Amending existing rules and making
recommendations for amendments to legislation and
(iii) Interpreting the Securities Act, 2001
and the accompanying regulations.
The application of uniform and transparent rules and legislation
is intended to ensure market efficiency and investor protection.
All companies wishing to operate as intermediaries in the
ECSM must first be licensed by the ECSRC, which monitors and
supervises their operations to ensure compliance with the
regulations and that professional standards are maintained.
These companies must also apply for membership of the Eastern
Caribbean Securities Exchange (ECSE). Additionally the principals
and representatives of these firms must be licensed by the
ECSRC and certified to use the ECSE’s trading software.
All licensed firms and personnel are subject to the rules
and procedures of the ECSE.
A Regional Debt Co-ordinating Committee, comprised of ECCU
Financial Secretaries is charged with coordinating the policies
and procedures for the Regional Government Securities Market
(RGSM), and ensuring compliance of the participating governments.
And, to ensure added efficiency in the RGSM, the ECCB performs
the role of fiscal agent to the participating governments.
This means that the Bank provides advice to governments on
the instruments being issued to the market, within the context
of their debt management strategies. Additionally, the Bank
provides administrative support in the issuance and redemption
of government securities. Each government is however responsible
for guaranteeing the financial instruments, it issues.
In a previous article, we noted that ECCU governments wishing
to issue securities are required to file a prospectus, with
financial and economic information about the country, and
the details of the security being issued. This document is
intended to assist prospective investors in evaluating the
potential risk and return of the security and making informed
investment decisions.
These arrangements - the ECSRC, the Regional Debt Co-ordinating
Committee, the Fiscal Agent and the disclosure requirements
have been put in place to ensure investor protection and to
promote confidence in the market.
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Measures To Ensure The Protection Of Investors In The Eastern Caribbean
Securities Market