The Trinidad and Tobago Fair Trading Commission (TTFTC) is yet to receive a response from the T&T Securities and Exchange Commission (TTSEC) as to the justification of its proposed fee hike.
TTSEC is proposing to more than triple most of the fees that participants in the securities industry must pay.
The FTC’s executive director and attorney Bevan Narinesingh, in an interview with the Sunday Business Guardian, said the TTFTC wrote to the TTSEC on January 22 seeking reasons for the hike.
“We wrote in our role as stakeholder. They (TTSEC) invited comments from all stakeholders. We wrote seeking clarification that this is not a violation of the Fair Trading Act and including how the fees will be utilised.
“... We are not making any judgement against them. Whatever they’re doing, we trust that it is following proper competition principles, and if they could advise us on terms of the considerations they took into account when looking at their fees,” Narinesingh explained.
However, he made it clear that, in the past, whenever there was a proposed fee hike, the TTFTC wrote to other entities like the Regulated Industries Commission (RIC), Trinidad Cement Ltd and even the National Flour Mills (NFM) when the price of flour was about to increase. The RIC is the regulator of utilities, TCL is the only manufacturer of cement in T&T and the NFM is the majority state-owned producer of flour, animal feeds and other products.
Interestingly, the TTSEC was invited to the TTFTC’s annual meeting of regulators, which took place last Thursday at Nicholas Towers, Port-of-Spain.
Narinesingh said no representatives of the TTSEC attended and no reason was given as to why they could not attend.
“...It was not a surprise that they weren’t there, let’s put it that way. They did inform us that they would not be attending... their staff probably are very focused on looking at and reading the comments and assessing the comments that they would have been received....Our past releases would show that they would have attended most, if not all, of our regulators’ sessions.” Narinesingh said.
Guardian Media sent an email to the TTSEC inquiring why no one attended the meeting.
No reply was given.
Asked whether there is any precedent for one regulator taking legal action against another regulator Narinesingh said, “I don’t look at it as bringing action...Being in a spirit of cooperation and collaboration, we were speaking to the entity to ensure that what they’re doing is in accordance with comparative practices,” said Narinesingh, reiterating that what the TTFTC did in writing to the TTSEC is attempt to ensure that the proposed fees are justifiable, based on the data and based on the operations of the Commission.
On December 17, 2024, the TTSEC posted, on its website, a circular letter to reporting issuers, broker dealers, investment advisers, underwriters and self-regulatory organisations registered under the Securities Act 2012.
The TTSEC presented a table comparing the percentage of the operational expenses from fee revenue in 14 jurisdictions, including T&T.
It made the point that current fee revenues cover about 15 per cent of its operational expenses, which means the TTSEC requires a government subvention to cover 85 per cent of its operating budget.
“With the exception of Singapore (18 per cent), all the other jurisdictions were able to cover between 70 per cent and 100 per cent of their respective operating budgets,” from fees, according to the TTSEC.
Claims of predatory conduct
Narinesingh said the TTFTC received two individual complaints late last year that certain pharmacies are selling pharmaceuticals “at very low prices,” which can perhaps equate to predatory pricing.
“...Some of the concerns that have come to my attention, and what we have seen in the public domain in many ways, have been that some of the prices are maybe too low for other pharmacies to effectively compete. So sometimes the question is why are these prices so low in terms of what some other entities are charging and whether that might be a violation of the Fair Trading Act.
“...We have to determine whether that is predatory conduct, whether your prices are low, like for instance, lower than your costs, with the long-term intention being to drive out your competitors,” Narinesingh said.
He added that some entities might be charging lower prices because they buy in bulk and for whatever reason, they are able to import the products at a cheaper price than some of their competitors.
Describing the pharmaceutical sector as “very complex,” Narinesingh said there have been entities in the market for a number of years, much longer than some of the new pharmacies.
“So that may be one of the reasons why they have a certain type of market share, and why they may have access to, for instance, foreign exchange at a more ready level than some of their competitors,” he added.
The FTC will also be doing work with pharmaceutical distributors as well, taking into consideration how they operate.
“How are these distributors operating? How are their prices being determined? And most importantly, how the pharmacies who buy from them look at their conduct, and whether, in fact, what they are doing could amount to something that is anti-competitive,” Narinesingh explained.
On whether the FTC was looking at supermarkets with a view to determine whether prices are being unfairly set, Narinesingh said in terms of the food supply and food distribution, external factors, and not in specifically the conduct of the entities in the sector, continue to account for some of these higher prices.