Durrant Pate/Contributor

As the Jamaica Stock Exchange (JSE) moves to tighten its regulatory regime, the domestic stock and bonds market regulatory body is enforcing some new rules, which are set to take effect on January 1, 2024.

The new rules comprises amendments to the current regulatory regime, in particular seeking to bolster corporate governance standards. The JSE Main Market rule Appendix 3 Listing Agreement – Section 14 – Audit Committee; JSE Junior Market Rule 504 2 (b) – Responsibilities and Functions – Audit and Remuneration Committee and JSE Junior Market Rule Appendix 1 – Definitions – Audit Committee and Remuneration Committee have been amended but won’t come into effect until January 1, 2024.

The amendments, which were passed in 2022, received a no objection from the Financial Services Commission (FSC) on April 19, 2023 and were circulated to listed companies on May 11. The amendments focus on the JSE’s requirements for listed companies audit and remuneration committees.

The rationale for the amendments is to bolster corporate governance standards in respect to composition and functions of audit and remuneration committees.

RMOD kept busy in 2022 with oversight activities

In the meantime, last year was an active one for JSE’s Regulatory and Market Oversight Division (RMOD) as it discharged its responsibility to effect daily oversight of market activities. From the activities pursued in 2022, there was a noticeable increase in the number of cases identified and closed in 2022 when compared to 2021.

The increase in cases handled and closed in 2022, reflects the ongoing efforts of the RMOD supported by the Regulatory and Market Oversight Committee (RMOC) to strengthen the JSE’s regulatory operations to enhance compliance with the rules and regulations of the JSE that promote and maintain an orderly market.

The RMOD monitors, reports on and enforces compliance by listed companies and members/dealers, and carries out its functions through automated market surveillance systems, enforcement of fines and penalties, processing and initiating complaints’ procedures, dispute resolution and risk assessments.

Regulatory performance

In discharging the functions mentioned above during the year, the RMOD identified and processed 326 compliance and market surveillance issues, which represented an increase of 28 per cent when compared to the number of issues handled in 2021 of 255.

The number of cases identified in 2022 and the case closure rate of 95 per cent, is an improvement on the results recorded in 2021 and is a direct result of the work that was conducted in the previous year to improve the quality of alerts from the Automated Market Surveillance System (AMSS) and implementation of procedures to support the detection of market breaches.

It is expected that with the implementation of recommendations from the RMOC’s assessment of the JSE’s Regulatory Framework, which was completed in 2022, the RMOD will continue to enhance the efficiency and effectiveness of the regulatory processes available to all stakeholders in 2023 and beyond.