Home' Trinidad and Tobago Guardian : July 4th 2013 Contents BG6 | NEWS
BUSINESS GUARDIAN www.guardian.co.tt JULY 2013 • WEEK ONE
It s a slow process.
That s how Subhas Ramkhelawan, chairman
of the T&T Stock Exchange (TTSE), described
the listing of small and medium enterprises
(SMEs) on the TTSE.
Speaking on June 24 at his TTSE office,
Nicholas Tower, Independence Square, Port-
of-Spain, Ramkhelawan said SMEs have
expressed interest in listing. However, other
companies are sceptical to list, citing, among
things, the TTSE s requirement to share cor-
"Those things would take some time to
work out because I am aware that there have
been a number of enquiries (by SMEs to list
on the exchange). To move from enquiry stage
to execution stage, there is a lot of learning
and unlearning by some of the SMEs in order
to put virtually all of their information before
the public," Ramkhelawan said.
In the 2011/2012 budget, then Finance Min-
ister Winston Dookeran announced plans to
provide SMEs with the opportunity to be listed
on the exchange to reduce their dependency
on financing from banks and to expand T&T s
Defining unlearning, Ramkhelawan said:
"SMEs would have done things in a certain
way before. When you come to an exchange,
(there is) accountability, transparency, disclo-
sure, making announcements about any mate-
rial change, change of directors, directors who
"There are a whole set of additional require-
ments that when you weigh the cost benefit
of it, you, as an SME, would have to be con-
vinced this is the way to go. It is clear there
is capital to be raised on the exchange; it is
clear that you can raise the capital at least on
an accounting basis at a far cheaper rate than
raise it via debt; it is clear that there are a
number of SMEs that really need equity capital
for growth rather than more debt."
Though the process of SMEs listing is a
slow one, it is important for economic growth.
"If there is some tweaking to do in terms
of the tax benefit, in terms of other factor,
then that will have to be done, but it is not
something we can walk away from, we have
to walk to and embrace SMEs.
"We have not had an SME listing as yet,
even though the infrastructure for it has been
in place close to a year. The brokers would go
out liaise with their clients. I cannot say how
long it will be before we have a listing, but I
am aware discussions and negotiations are
TTSE and Jamaica Stock Exchange
Ramkhelawan said Jamaica is successful in
listing SMEs because: "The Jamaica stock
market is a little bit more developed than ours
in terms of accessing and raising capital.
They ve had a reasonably successful SME pro-
gramme. We have not had that yet. We do
have the advantage, I feel, of really positioning
ourselves as a regional capital market.
Comparing the Jamaica Stock Exchange
with the TTSE, Ramkhelawan said it takes
more fiscal policy to be put in place in T&T s
exchange system to attract SMEs to list.
"Giving up of the tax has been far more
aggressive than in ours. In our situation, the
tax rate will be adjusted downwards, but
removed entirely. That is a policy matter,
whether you want to remove taxes altogether
or whether you want to balance it, to give a
sufficient incentive to small players to come
"We need to have effective trade in services
agreements with some of our neighbours; not
just trade in goods, trade in financial services
that will allow for insurance, that will allow
for banking, that will allow for securities. If
you look across Latin America, we do not have
trade in financial services. The most recent
trade agreement is in Panama, which is trade
in goods. Some of the other trade agreements
are somewhat broken.
"We don t have double taxation agreements
with our neighbours. It means that no investor
wants to be taxed in T&T for an investment
and then have to be taxed again at home. Dou-
ble taxation treaties would allow for a level
pegging, meaning you don t have to pay twice
to the tax man."
Barriers to investment, such as double tax-
ation and trade service agreements, tend to
deter investors from investing in countries or
territories in this region, Ramkhelawan said.
Normally the process of investing occurs
when: "an investor buys a stock on the stock
exchange, that stock is held for him or cus-
todied for him in a subsidiary of the TTSE
known as the T&T Central Depository (TTCD).
The TTSE plans to engage in "custodying"
not only in TT dollars but in US dollars.
Ramkhelawan said: "When you buy that
stock, the stock is then held to your order and
in your name by the TTCD, you no longer
need to have a physical certificate it is held
for you and the confirmation is there."
This is known as the de-certified way of
trading. There are investors who still have cer-
tificates and they can continue to trade using
those certificates. The investors who still have
certificates must bring it in to the stock
exchange in order to be able to trade.
"We are moving from a stock exchange per
se, stock being equal to shares and preference
shares to a securities exchange where we are
now trading bonds, mutual funds. We are not
only trading in TT dollars we are moving to
trade in other currencies."
By October, the TTSE is expected to intro-
duce investing directly into the United States
and this means the investor would not have
to change from $TT to $US and vice versa.
"If somebody (in T&T) wanted to buy a
stock abroad suppose it is Microsoft, they will
be able to go to their broker, the broker in
T&T would have to laise with the correspon-
ding broker abroad to effect the trade. The
investor goes to the (local) broker and indicate
he wanted to buy stocks in the US-based com-
pany, once there is agreement, the T&T broker
then arranges with his correspondent broker
abroad the broker buys it."
"Up until now, the custoding for that would
have to take place abroad, (but in October)
that person would then be able to hold those
shares in custody with the T&TCD. When the
TTCD sends out a statement it would state
that you (the investor) hold these TT denom-
inated shares, then you would see another
grouping (on the statement) where you would
see you hold Microsoft (shares). That is the
very significant change that is taking place.
There is some tweaking of the legislation
that is needed.
"I think the legislation has moved to a place
where you have a balance and that is important.
How the bye laws turn out to facilitate is the
other area, then, enforcement. The speed at
which the exchange can operate will depend
on the speed at which the SEC would operate
in terms of the approval of issuers and issues.
It really is a collaboration and cooperation to
ensure that the pipeline is not stymied by
extensive delays at the level of the SEC.
"You have all these players, you have the
broker, you have the SEC, the exchange and
the issuer. The thing about regional capital
markets is that regional capital markets you
can get front mover advantage, if you could
establish efficiency and effectiveness in meeting
the needs of the client base, you have to be
"To be outfront you must have efficiencies
at the level of the SEC, the exchange, at the
level of the brokers and then you can satisfy
the legitimate needs of the issuers."
The harmonisation which he speaks to is
not existent but Ramkhelawan said there are
some "sticking points" with regard to speed
but it would have to be ironed out.
to list, but
process is slow
PHOTO: ABRAHAM DIAZ
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