Raphael John-Lall

Reg­u­la­to­ry, le­gal and com­pli­ance of­fi­cer at the T&T Stock Ex­change, Joy Ram­lo­gan, is as­sur­ing the pub­lic that good cor­po­rate gov­er­nance can con­tribute to strength­en­ing the role of not on­ly the T&T Stock Ex­change but stock ex­changes in gen­er­al.

She spoke on the top­ic of de­vel­op­ing good cor­po­rate gov­er­nance for run­ning an ef­fec­tive stock ex­change at a we­bi­nar host­ed by the Caribbean Cor­po­rate Gov­er­nance In­sti­tute on Jan­u­ary 24, 2025.

“There are rank­ings about the best per­form­ing stock ex­changes which have the best in­dices, there are a lot of dif­fer­ent met­rics. How­ev­er, a suc­cess­ful stock ex­change, in our con­text in T&T, would be one which is grow­ing and ex­pand­ing. That is where we would like to be. So, we would like to get more par­tic­i­pa­tion by both lo­cal and re­gion­al com­pa­nies to list on our ex­change, to ex­pand their range of prod­ucts on the ex­change as well as to ex­pand the in­vestor base. Be­sides the macro­eco­nom­ics of the coun­try of course which would have huge im­pact on peo­ple’s will­ing­ness to come to the cap­i­tal mar­kets. It re­al­ly does de­pend on whether you can give the ac­cess to cap­i­tal which peo­ple nor­mal­ly want,” she said.

She al­so em­pha­sised the im­por­tance of in­vestor con­fi­dence in a suc­cess­ful stock ex­change.

Ram­lo­gan not­ed that the TTSE launched in 1981 in or­der to for­malise trad­ing in shares in T&T. It was the sec­ond such for­mal ex­change in the Cari­com re­gion. By 1995, all the func­tions were un­der the Ex­change and then there was a sep­a­ra­tion, with the T&T Se­cu­ri­ties and Ex­change Com­mis­sion (TTSEC) tak­ing over the reg­u­la­tion of the se­cu­ri­ties mar­ket. The T&T Stock Ex­change is now re­spon­si­ble for trad­ing and the de­pos­i­to­ry for shares.

“That is very im­por­tant in terms of look­ing at in­vestor con­fi­dence be­cause both or­gan­i­sa­tions have in­vestor con­fi­dence as part of their mis­sion.

“The T&T Se­cu­ri­ties and Ex­change Com­mis­sion is charged with en­forc­ing the law as well as en­sur­ing that there is pro­tec­tion of in­vestors from un­fair and im­prop­er fraud­u­lent prac­tices. On the oth­er side, our Ex­change has the trad­ing rules and it is par­tic­u­lar­ly re­spon­si­ble to fa­cil­i­tate both ef­fi­cient mo­bil­i­sa­tion and al­lo­ca­tion of cap­i­tal so we can have prop­er price dis­cov­ery. So those are the good gov­er­nance as­pects in­side there,” she said.

She al­so spoke about the de­vel­op­ment of the Small and Medi­um-Sized En­ter­pris­es (SME) sec­tor and its re­la­tion to the T&T Stock Ex­change.

“There are sev­er­al lo­cal en­ter­pris­es which are of the size that would have the ben­e­fit the SME mar­ket un­der cer­tain tax in­cen­tives that we have. There was a launch in the mar­ket in the ear­li­er part of the last decade and it came with new list­ing rules and a new gov­er­nance frame­work for men­tors to be ap­point­ed… so that the SMEs could be tak­en to mar­ket with ex­pert ad­vice.

“As well, we have been lis­ten­ing to the mar­ket and oth­er changes brought to the SEC be­fore ap­proval to re­spond to the re­quire­ments of our com­pa­nies. In do­ing that, we are hop­ing to get more com­pa­nies list­ed so that there are more op­tions avail­able for in­vestors. As well, while we pur­sue in­vestor ed­u­ca­tion and to get more in­vestors in­ter­est­ed in com­ing to the mar­ket and ex­pand­ing the base,” said Ram­lo­gan said.

She added that good gov­er­nance for stock ex­changes is not iden­ti­cal to cor­po­rate gov­er­nance in the rest of the cor­po­rate world.

“There are all these stud­ies on good gov­er­nance in stock mar­kets and they look at the nor­mal shop­ping list of good gov­er­nance that you would ex­pect in terms of how boards op­er­ate, how they com­mu­ni­cate to stake­hold­ers etc. Par­tic­u­lar­ly for stock ex­changes, I think that good gov­er­nance is not the same as the in­ter­nal­ly fo­cused cor­po­rate gov­er­nance that peo­ple think about which has got more ex­ter­nal­ly be­cause we think about the eco­nom­ic, so­cial and good gov­er­nance goals and those types of in­dices.”

She al­so said the le­gal regime is ex­treme­ly im­por­tant for the op­er­a­tion of a stock ex­change.

“We are a self-reg­u­la­to­ry or­gan­i­sa­tion so hav­ing the cor­rect struc­ture and laws tend to be much stricter in terms of mov­ing with the mar­ket, which is ex­ces­sive­ly im­por­tant. So that we have com­mu­ni­ca­tion not on­ly with the mar­ket and lis­ten­ing to the mar­ket but we al­so hav­ing that stake­hold­er en­gage­ment with our reg­u­la­tors and not just the TTSEC, but crit­i­cal stake­hold­ers in that reg­u­la­to­ry en­vi­ron­ment, in­clud­ing the Cen­tral Bank and the Min­istry of Fi­nance. This is in or­der to have the changes that we need to make the stock mar­ket more re­spon­sive and to ad­dress the key is­sues that we see aris­ing.”

She gave the ex­am­ple of the liq­uid­i­ty in­dex that the T&T Stock Ex­change is de­vel­op­ing.

“For ex­am­ple, at our con­fer­ence, there was a launch of the liq­uid­i­ty in­dex which we are de­vel­op­ing, which will hope­ful­ly give more in­for­ma­tion to the mar­ket about the sta­tus of liq­uid­i­ty in the mar­ket and hope­ful­ly about dif­fer­ent stocks. So, com­mu­ni­ca­tion, we think is key as well as ad­her­ence to good gov­er­nance prac­tices be­cause the last thing you need is Ponzi schemes like Bernie Mad­off in the mar­ket or bad ac­count­ing prac­tices like the En­ron and World­Com dis­as­ters.

“The New York Stock Ex­change is known to be well doc­u­ment­ed and well-reg­u­lat­ed but those came like nu­clear bombs. So, in small mar­kets, there is the need to scan the mar­ket and to use the for­mal in­for­ma­tion that we see in the da­ta. So we are on­line now and we have been elec­tron­i­cal­ly since 2005 so we have a lot of in­for­ma­tion and we have been do­ing a lot da­ta min­ing, da­ta scan­ning, da­ta analy­sis to un­der­stand what is dri­ving the var­i­ous trends that we are see­ing in the mar­ket.”

She con­clud­ed by say­ing they en­cour­age par­tic­i­pants in the mar­ket to fol­low good cor­po­rate gov­er­nance prac­tices.

“That is how we have part­nered with the T&T Cham­ber of In­dus­try and Com­merce and the Caribbean Cor­po­rate Gov­er­nance In­sti­tute for the new T&T Cor­po­rate Gov­er­nance Code. In fact, the first gov­er­nance code was al­so a joint ini­tia­tive with the T&T Cham­ber of In­dus­try and Com­merce and the Caribbean Cor­po­rate Gov­er­nance In­sti­tute. So, we have a great stake in im­prov­ing gov­er­nance in T&T.”

Ba­sic busi­ness

prin­ci­ple

Man­ag­ing di­rec­tor on the Bar­ba­dos Stock Ex­change, Mar­lon Yarde who al­so spoke dur­ing the we­bi­nar said the stock ex­change busi­ness is like any oth­er busi­ness in the fi­nan­cial world.

“We buy in­for­ma­tion and in­for­ma­tion is the key to a well-func­tion­ing cap­i­tal mar­ket and we sell that in­for­ma­tion to the in­vest­ing pub­lic so that they could make de­ci­sions about their in­vest­ments. In my view, the suc­cess­ful stock ex­change is built on a foun­da­tion of ef­fi­cien­cy, trans­paren­cy, trust and adapt­abil­i­ty to the chang­ing needs of the mar­ket­place. The mar­ket needs to be ef­fi­cient, judged by the liq­uid­i­ty in the mar­ket, it needs to be trans­par­ent as peo­ple need to know what is go­ing on in the mar­ket­place par­tic­u­lar­ly the com­pa­nies that are list­ed on the ex­change and de­vel­op­ments in the over­all econ­o­my. This in turn builds trust and we do what we need to do to adapt to the mar­ket­place. We need to do what we need to do so that we do not un­der­mine that con­fi­dence and trust.”

He al­so said that the stock ex­change acts as a cat­a­lyst for eco­nom­ic growth by fa­cil­i­tat­ing an ef­fi­cient al­lo­ca­tion of cap­i­tal and in­vest­ment op­por­tu­ni­ties.

“So, there are a num­ber of fea­tures of a suc­cess­ful mar­ket­place. Like any oth­er busi­ness, we need to have sys­tems in place, we need good ac­count­ing func­tions, good man­age­ment in place, sep­a­ra­tion of du­ties, any­thing that you would see in any oth­er busi­ness hap­pens at a stock ex­change. But one of the things that is unique to stock ex­changes is that we are high­ly reg­u­lat­ed bod­ies and we have the re­spon­si­bil­i­ty as a self-reg­u­la­to­ry or­ga­ni­za­tion un­der the Se­cu­ri­ties Act to make rules for our bro­kers and for the per­sons list­ed on the stock ex­change.”