With the growing acceptance of foreign exchange (FX) trading in Jamaica and the purchase of an FX trading outfit by Scotiabank Toronto, Minister of Finance, Audley Shaw, held out the possibility for the creation of a Futures and Commodities Commission to regulate alternative investment schemes that offer foreign exchange trading, hedge funds, derivatives and other non-traditional financial products in Jamaica.

"Transparency will be the order of the day in Jamaica. We are not asking companies to give up their trade secrets. If you are trading the Yen against the Euro or the Pound against the US dollar, you don't have to tell us your strategy. What we will require, however, is your profit and loss statement. We will require your balance sheet and we will demand that you prove capital adequacy."

Minister of Finance Audley Shaw (left) shakes hands with Christopher Berry, chairman of Mayberry Investments. Looking on is Gary Peart, CEO of Mayberry Investments. The occasion was an investors' briefing held at the Knutsford Court Hotel on Wednesday with Minister Shaw as a special guest speaker. (Photo: Bryan Cummings)

Shaw made these comments at the Mayberry Investments monthly investment seminar held on Wednesday at the Knutsford Court Hotel.

Another regulator?

Currently, alternative investments outfits fall under the regulation of the Financial Services Commission and the Bank of Jamaica.

"We are a small country and it may prove that we don't actually need a separate regulator for alternative investments, but we have asked the International Monetary Fund (IMF) to come in and assess the situation. When we create the framework to properly regulate these schemes, a Futures agency may be one of the IMF's recommendations."

Speaking after his presentation, Shaw noted that for now, the FSC is mandated to regulate the existing schemes that are in Jamaica. During his presentation, Shaw told the audience that, "Other alternative investment entities will come
up because we are in a free
market society."

Traditional players enter FX trading

This newspaper understands that several local financial institutions have sent staff for foreign exchange trading with the view to create products for clients that demand higher returns than what is offered by traditional investment products. In fact, over the summer, the parent company of Scotiabank Jamaica, acquired TradeFreedom Securities Inc, an online broker that facilitates trading of Canadian and US equities, options, futures and foreign exchange.

Scotiabank Jamaica acquires TradeFreedom Securities
According to Scotiabank Toronto's press release dated October 1, 2007, the purchase of TradeFreedom, "is an excellent strategic fit for our wealth management business and we are pleased to welcome the TradeFreedom team to Scotiabank," said Barb Mason, executive vice-president, wealth management.

The executive also noted that the acquisition complements product offerings currently available through Scotiabank's direct investment arm, ScotiaMcLeod Direct Investing (SMDI). Established in 1999, TradeFreedom is a leading online broker that provides a sophisticated bundle of services for active traders and investors.

When asked if Scotiabank subsidiary, Dehring Bunting & Golding clients would benefit from the purchase of TradeFreedom, the local corporate communications office referred us to Scotiabank corporate communications in Canada. Email querries were not responded to by press time.

The FSC is not the enemy

Shaw told the Mayberry audience that as the investment arena expands, the FSC must ensure that the books of each player is in order.
"The FSC is not the enemy of investors. The FSC has a mandate to regulate these schemes. And I will say now: If someone doesn't want to reveal his details, not even to his depositors, then watch out. Something is wrong."

And speaking to a group of concerned Cash Plus investors after the main presentation, Shaw stated, "The Government can't bail out anyone".

Get back to basics

Shaw, whose background is in investment promotion, chided Jamaicans for putting their hopes for upward mobility into "get rich quick schemes." He stated, "We need to get back to productivity and inventiveness. We need to be risk-takers as entreprenuers. Get rich quick schemes will not absolve us as a country."

Good support in Bounty Hall for Heineken's 'Bond' road show

Opera star to sing for the Ward

This is the century for the person of colour — Judge Joe Brown