When To­ba­go-born Kester Guy was ap­point­ed as the chief ex­ec­u­tive of­fi­cer (CEO) of the Trinidad and To­ba­go Se­cu­ri­ties and Ex­change Com­mis­sion (TTSEC), ef­fec­tive De­cem­ber 1, 2023, he was the first sub­stan­tive hold­er of that po­si­tion since Ju­ly 31, 2020, when the three-year con­tract of Haydn Git­tens, the pre­vi­ous CEO, ex­pired.

In his first in­ter­view with a lo­cal me­dia house, Guy gave the as­sur­ance that the Com­mis­sion, un­der his watch, ”is con­stant­ly look­ing at its process­es to de­ter­mine how we can im­prove the stan­dard of ser­vice we of­fer to the pub­lic.”

Re­spond­ing to a ques­tion about the pace at which the TTSEC moves and the re­spon­sive­ness of the TTSEC staff, Guy said the com­mis­sion con­tin­ues to re­view is­sues re­lat­ed to the speed of ser­vice “and where there are com­plaints, please en­cour­age them to bring it to our at­ten­tion. This is so that we can en­sure that our stake­hold­ers know ex­act­ly where we stand in terms of what is the ex­pect­ed ser­vice de­liv­ery, and then we can be ap­pro­pri­ate­ly judged rel­a­tive to what is the ex­pect­ed ap­pro­pri­ate ser­vice de­liv­ery.”

Guy does not be­lieve that the com­mis­sion should be judged on its abil­i­ty to at­tract com­pa­nies to reg­is­ter.

“If you cre­ate an in­cen­tive for the reg­u­la­tor to at­tract per­sons to reg­is­ter and have to turn around and reg­u­late them, you run the risk of cre­at­ing a par­tic­u­lar moral haz­ard, be­cause I can im­prove my chances by just ap­prov­ing any­body. So when we look at how we are judge the reg­u­la­tor, we need to make sure we are judg­ing them us­ing the right met­rics,” he said.

He added that if there are ten com­pa­nies seek­ing reg­is­tra­tion and he be­lieves none of the ten would be good for in­vestors, then those com­pa­nies should not be al­lowed to par­tic­i­pate in the mar­ket.

“Be­cause if I do and things go wrong, then the said mar­ket is go­ing to come and say, ‘Well, where was the SEC? Were they sleep­ing? But then I will say, but you judge me based on how much I could reg­is­ter? Okay, you see the point,” said Guy.

Asked whether the Com­mis­sion can do any­thing about the do­mes­tic stock mar­ket, which is in its third year of de­cline, the Com­mis­sion’s boss said, “The TTSEC has a role to en­sure that mar­kets are fair and trans­par­ent and to en­sure that the en­vi­ron­ment for cap­i­tal mar­ket de­vel­op­ment is ap­pro­pri­ate and con­ducive to busi­ness.

“Hav­ing said that, I think the start­ing point is about tru­ly un­der­stand­ing what is what is hap­pen­ing with­in our mar­ket. To that ex­tent, the TTSEC re­cent­ly held a fo­rum with stake­hold­ers, which in­clud­ed all the ma­jor play­ers, and the di­a­logue was geared to fa­cil­i­tate dis­cus­sion on what is hap­pen­ing in our cap­i­tal mar­kets. This would al­low us col­lec­tive­ly iden­ti­fy what the is­sues are, if they are spe­cif­ic is­sues, and a pro­posed way to go for­ward for cor­rect­ing those is­sues...There are some things that might be fac­tors that we can con­trol, and there are some ex­oge­nous fac­tors out­side of our realm and might just be the tra­jec­to­ry of how the eco­nom­ic en­vi­ron­ment is tend­ing to­wards.”

Ques­tioned on why the TTSEC did not man­date that Cor­po­ra­tion Sole make a takeover bid for Re­pub­lic Fi­nan­cial Hold­ings Ltd, when the hold­er of State as­sets went past 29.9 per cent of the com­mer­cial bank last year, Guy said, “Spe­cif­ic mar­ket ac­tiv­i­ties and spe­cif­ic con­cerns of po­ten­tial breach­es would be han­dled in a closed en­vi­ron­ment. I would not want to dis­close, at this stage, what the Com­mis­sion has done. I would say, the com­mis­sion a frame­work that mon­i­tors every­thing that hap­pens on the mar­ket. If there is any­thing that con­tra­venes any of our es­tab­lished statutes and re­spon­si­bil­i­ties, the Com­mis­sion has an oblig­a­tion to en­gage the rel­e­vant stake­hold­ers. That is all I will say on that spe­cif­ic is­sue.”

About Kester Guy

Guy brings a strong and suit­able aca­d­e­m­ic and pro­fes­sion­al back­ground to his job as the reg­u­la­tor of the lo­cal se­cu­ri­ties in­dus­try.

In the news re­lease an­nounc­ing his ap­point­ment, the TTSEC not­ed that Guy has “a sol­id macro-eco­nom­ic foun­da­tion” for the job. He read for a BSc in eco­nom­ics and math­e­mat­ics (first class ho­n­ours) from the Cave Hill cam­pus of The Uni­ver­si­ty of the West In­dies. He al­so holds an MSc in eco­nom­ics from UWI St Au­gus­tine.

Guy’s Mas­ters the­sis was on cap­i­tal mar­kets with a spe­cif­ic con­cen­tra­tion on the liq­uid­i­ty re­turn re­la­tion­ship in the T&T stock mar­ket.

“We were mea­sur­ing the no­tion that whether stock mar­ket prices fac­tored in a pre­mi­um for illiq­uid as­sets was true. In oth­er words, why would some­one want to hold an illiq­uid as­set? The no­tion is that there is a liq­uid­i­ty pre­mi­um that is built in. So if I want to in­cen­tivise some­one for hold­ing some­thing that can­not be eas­i­ly trad­ed, I need to pro­vide them with an ad­di­tion­al in­cen­tive,” said Guy.

That ad­di­tion­al in­cen­tive would be a high­er div­i­dend than the mar­ket in the case of stocks and a larg­er coupon, in the case of bonds. His the­sis looked at both div­i­dend pay­outs and cap­i­tal gains for hold­ing an in­stru­ment for a long pe­ri­od, com­pared with a short­er time hori­zon.

“I con­clud­ed that notwith­stand­ing the role of news and oth­er fac­tors that may im­pact price changes, there was a small liq­uid­i­ty pre­mi­um built in, not by de­sign, but by prac­tice,” he said, adding that his study demon­strat­ed that the glob­al phe­nom­e­non was true in lo­cal­ly trad­ed en­ti­ties.

The se­cu­ri­ties reg­u­la­tor re­called that the su­per­vi­sor of his the­sis was Dr An­tho­ny Birch­wood and he worked close­ly with Dr Dave Seer­at­tan, re­search fel­low at UWI St Au­gus­tine, and Dr Shel­ton Nicholls, for­mer deputy gov­er­nor at the T&T Cen­tral Bank.

Asked if he would say he is an ex­pert on the lo­cal stock mar­ket, Guy said, “I am the reg­u­la­tor of the Trinidad and To­ba­go stock mar­ket. I stud­ied that in great de­tail, so I would say yes, I am an ex­pert in mar­ket ac­tiv­i­ty.”

Among his lec­tur­ers at the St Au­gus­tine cam­pus were Den­nis Pan­tin, Dr Lester Hen­ry, Dr Dhanaysar Ma­habir, Dr So­nia Teelucks­ingh and Gre­go­ry Mc Guire.

Af­ter re­ceiv­ing his post-grad­u­ate de­gree in 2006, Guy spent two years at the re­search de­part­ment of the Cen­tral Bank.

In 2008, he mi­grat­ed to Bar­ba­dos, tak­ing up a sim­i­lar po­si­tion at the Cen­tral Bank of Bar­ba­dos (CBB). Pro­mot­ed to se­nior econ­o­mist in 2013, he was named as the CEO of the De­posit In­sur­ance Cor­po­ra­tion of Bar­ba­dos, while con­tin­u­ing to per­form the role of se­nior econ­o­mist at the Bar­ba­dos cen­tral bank. He re­turned to his sub­stan­tive po­si­tion at the CBB in 2015, as an as­sis­tant di­rec­tor of its re­search de­part­ment. Dr Kevin Greenidge, the cur­rent Gov­er­nor of the CBB, was one of three di­rec­tors of the re­search de­part­ment at the time.

Guy spent over six years at the Bar­ba­dos Fi­nan­cial Ser­vices Com­mis­sion, ris­ing to be­come the CEO of the or­gan­i­sa­tion, which is re­spon­si­ble for su­per­vis­ing and reg­u­lat­ing non-bank fi­nan­cial in­sti­tu­tions, whose re­mit in­cludes in­sur­ance com­pa­nies, pen­sion plans, mu­tu­al funds, cred­it unions and in­vest­ment ser­vice com­pa­nies.

Guy, who has been the CEO at the TTSEC, for nine months, de­scribes his time there was a “smooth and seam­less tran­si­tion,” be­cause the man­agers there are a group of “very tal­ent­ed com­pe­tent peo­ple” and al­so be­cause a sig­nif­i­cant part of his ca­reer has been fo­cused on fi­nan­cial reg­u­la­tion.

“I am com­ing in with a very clear sense of pur­pose, a very clear sense of ob­jec­tives and ideas as to how we would like to see things done, and an ex­ten­sive amount of en­gage­ment. So I can use prac­ti­cal ex­am­ples of things that have worked be­fore, that might be ap­plic­a­ble here,” he said.