THE Jamaica Stock Exchange will licence up to two new brokers this year, after closing it doors to new member dealers for seven years.
For years, the Exchange have been approached by companies asking for a licence that would allow them to use the trading and settlement platform directly.
Up to nine have expressed interest in recent times.
JSE General Manager Marlene Street Forrest said that the expansion in the investor base, the expected increase in the number of listed companies (see related story) and the need for new products on the market made the Exchange reopen its door.
“We feel that the new members will be able to expand the market even further,” she said.
But companies will have to put their best foot forward if they want one of the two possible licences.
Companies with the strongest financial positions will be viewed more favourably than others, even though the net free capital of the member dealer needs to just be over $10 million, while they have to meet fit-and-proper requirements.
However, the business plans will factor more heavily in the decision.
“There are other products that can be added to the market, we want to see the innovation coming trhough in the new member dealers,” Street Forrest said. “We want to see companies looking at exchange traded funds, Jamaica depository receipt, (and) looking in terms of options, derivates.”
The business plan’s novelty carries 10 per cent of the score in the assessment of applications.
There are currently 11 member dealers on the Exchange, which Street Forrest believes will be pushed to expand their equity-based products by the “newer member dealers trying to be new and different”.
Interested companies are being asked to submit their appications complete with their bid prices for the licences being auctioned by July 13. There is a reserve price.