Ashford W. Meikle, Business Reporter

Marlene Street-Forrest, general manager of the Jamaica Stock Exchange, says JSE now to take a decision on finalising the process. - File

The Jamaica Stock Exchange (JSE) continues to work through ticklish issues of how it will be regulated and assignment of share capital when it sheds its not-for-profit status and goes public - a process unlikely to be completed this year.

JSE general manager Marlene Street-Forrest said the process of demutualisation continues and was the final stage before the company lists on its own exchange.

"We have been doing things; we have been working behind the scenes. In fact we have had new articles of association drawn up to facilitate the whole demutualisation process, and where we are now is in relation to the direction we will be taking n terms of finalising the process," Street-Forest told Wednesday Business.

But the plan, agreed to two years ago this month, was initially sold as a six-month process by former JSE chairman Roy Johnston, who noted then that within that time the JSE would "decouple the function of being a member/owner and being a trader of stocks."

Street-Forrest said Monday that the process required working through technical issues - "for example, there were some elements of how do you treat trading access and those have been clarified and we have been able to move on."

In an extraordinary general meeting January 26, 2005, the 11 broker members - who, as part owners, were the only stock brokers allowed to trade on the Exchange - agreed to convert to a for-profit company and convert their membership into shares.

According to Street-Forest, some of the delay is linked to issues of governance.

"There are also regulatory issues that we have to deal with. Naturally, as a stock exchange, we are not going to regulate ourselves. These are some of the issues within the JSE which we are working on."

It is expected that JSE's regulator will be the Financial Services Commission.

Economist and publisher, John Jackson, has been championing demutualisation of the exchange from the 1980s.

"In the United States, (and) all over the world, stock exchanges and commodity exchanges are going public, so why not the local stock exchange? If they are encouraging people to list why can't they themselves list as an institution?" Jackson remarked in a telephone interview Monday.

However, Street-Forrest said that the decoupling of shares - which would divorce the holding of a seat on the Exchange from membership and any stockbroker, resident or non-resident, could trade once the required fee was paid to the JSE - had not been completed.

"The capital has been expanded but the transfer to the 11 brokers has not," she said.

In fact, the general manager also disclosed that the company's share capital is yet to be finalised.

"That's a decision the board has to take," Street-Forrest said. Not all of the capital will be transferred; some will be in reserve."

Once the regulatory issues have been clarified, the composition of the board will also change to reflect that, she said.

ashford.meikle@gleanerjm.com

JSE Members:

Barita Investments Limited

Capital & Credit Securities Limited

Dehring Bunting & Golding Limited

First Global Stockbrokers Limited

JMMB Securities Limited

M/VL Stockbrokers Limited

Mayberry Investments Limited

NCB Capital Markets Limited

Pan Caribbean Financial Services Limited

Stocks and Securities Limited

Victoria Mutual Wealth Management Limited