THE FSC

1
THE FSCS ROLE IN FACILITATING CAPITAL MARKET
DEVELOPMENT IN JAMAICA

• Mr Lyndon Martin, CFA
• Senior Technical Analyst
• Financial Services Commission

2
Outline

• The FSC
• Overview of Capital Markets
• Selective Data on Jamaicas Capital Markets
• Overview of the Role of the FSC in Capital Market
  Development
• Recent FSC Initiatives
• Capital Market Challenges
• The FSCs Future Role

3
The FSC

• Mission To regulate and supervise the
  securities, insurance and pensions industries for
  the protection of their users thereby enhancing
  public confidence through the efforts of a
  competent workforce.
• Self-financing regulatory body
• Guided by statutes and regulations
• The FSC, is committed to IOSCOs 3 core
  objectives
• The protection of investors
• Ensuring that markets are fair, efficient and
  transparent and
• The reduction of systemic risk.

4
Overview of Capital Markets

• Capital Markets
• Channel savings and investments between the
  suppliers of capital and the users of capital
• Facilitates the accumulation of long-term finance
• Transfer financial resources of savers to those
  who have promising productive areas
• Spur economic growth

5
Data on Jamaicas Capital Markets Funds under
Management
6
Data on Jamaicas Capital Markets Repos
7
Data on Jamaicas Capital Markets Exempt
Distribution Issuance
8
Overview of the FSCs Role in Capital Market
Development

• The FSC
• Aims to ensure strength and stability in the
  capital markets
• Promotes capital market integrity
• Ensures that its regulations emphasize disclosure
• Promotes investor education
• Takes steps to reduce systemic risk

9
Recent FSC Initiatives

• Steps taken to improve financial inclusion and
  towards a National Financial Literacy Program
• Collaboration with other entities in order to
  create a conducive environment for the venture
  capital industry
• Recent legislation
• Securities (Prudential) Regulations
• Securities (Collective Investment Schemes)
  Regulations
• Securities (Retail Repurchase Agreement)
  Regulations
• Retail Repo Reform

10
Capital Market Challenges

• Demand Constraints
• Lack of financial inclusion
• Low levels of savings
• Supply Constraints
• Lack of adequate capital
• Lack of good corporate governance and proper
  financial management
• Absence of deep and liquid secondary markets

11
FSCs Future Role in Capital Market Development

• The FSC must continue to
• Facilitate the development of a conducive capital
  market environment
• Establish regulatory frameworks and policies that
  facilitate an environment where new products are
  created and properly regulated
• Work towards harmonization of the Caribbean
  regulatory framework
• Promote better disclosure of financial products
  to improve transparency and integrity and to
  build investor confidence
• Take steps to increase the level of financial
  education and sophistication of investors

12
Conclusion

• The FSC will continue to develop a robust
  framework of oversight and supervision, which
  emphasizes
• Greater transparency and disclosure
• An approach that seeks to better understand the
  potential risks associated with financial
  innovation and find the right balance between
  unrestrained innovation and overregulation
• Increased internal processes for monitoring
  market developments and identifying emerging
  risks
• Engagement with other regulators and supervisors,
  both locally and internationally