STRUCTURAL and regulatory barriers are still limiting how easily businesses can access Jamaica’s capital markets, despite the market’s relative outperformance in the region.

“It’s for investors, it’s for micro firms, it’s for small and medium-sized businesses and well-established businesses,” said Stacy-Ann Tait, chief investment officer at NCB.

While addressing the audience at the Jamaica Stock Exchange Investments and Capital Markets Conference on Thursday, at the Jamaica Pegasus hotel in Kingston, she argued that persistent weaknesses in market design, regulation, and investor participation continue to constrain capital mobilisation and economic growth.

Tait warned that underdeveloped capital markets have far-reaching consequences, including underinvestment by businesses, slower economic expansion, and increased vulnerability to external shocks. She said these gaps also push domestic savings overseas, instead of being channelled into local businesses and infrastructure. Central to that challenge, she argued, is the absence of a strong credit-rating culture, which weakens investor confidence and undermines effective price discovery. To address this, Tait called for regulatory reforms that would incentivise credit ratings, including differentiated capital charges for rated exposures.

“What it does is the higher rated you are, your capital charge is lower,” she explained. “That incentivises customers, issuers, and the persons investing in them to press for credit ratings.”

She further suggested linking credit ratings to corporate and social responsibility, reinforcing transparency and accountability across the market. Investor participation, she noted, is also being dampened by limited liquidity in the secondary market, particularly for corporate bonds. Without confidence that securities can be bought and sold when needed, investors remain hesitant to enter the market, reducing demand and discouraging issuers.

“It’s very important that when investors step into the capital markets, they need to be able to have confidence that they will be able to buy and sell their securities when they need to because you need liquidity,” Tait said. “When you don’t have that, then investors are hesitant to enter the market, and then corporate issuers struggle to attract interest.”

Tait pointed to the JSE Private Market platform as a tool that could help address these challenges but remains underutilised. She also highlighted regulatory inconsistencies that distort investment decisions, noting disparities in capital charges and market risk weightings between loans and corporate bonds with similar risk profiles. Additional capital charges applied purely based on how investments are categorised, rather than their underlying risk, she argued, restrict the amount of capital that can be mobilised. Group exposure limits were cited as another constraint, with some financial institutions capped at 40 per cent while securities dealers face a 25 per cent limit.

“When you are putting your balance sheet to work to invest, you can’t invest more than 25 per cent of your balance sheet to a group of connected issuers,” she explained.

These limits make it difficult for businesses seeking long-term capital to fully optimise funding through the capital markets, as such, Tait also called for a review of pension fund and collective investment scheme limits, arguing that existing caps restrict the free flow of domestic savings into productive investments. Revisiting those limits, particularly for private-sector securities would mobilise more funding for the capital markets while protecting and growing pension assets held on behalf of Jamaicans. She questioned rigid participation rules imposed at the regulatory level, suggesting that internal risk management frameworks should play a greater role in determining exposure.

“There are already guidelines that say who are eligible investors in these instruments. We don’t need to then say the number and also say that you cannot do more than X per cent in a particular issue.”

To deepen liquidity and scale, Tait called for stronger regional integration, including simplified approval processes and standardised requirements for cross-listings, allowing capital to move more freely across Caribbean markets and expanding the investor base. Despite these challenges, she acknowledged progress, pointing to growth in retail participation, policy reforms that have transformed how corporate bonds are issued, and digital innovations such as the
Go IPO platform. However, she cautioned that limited financial literacy continues to suppress demand, with many retail investors still assessing risk in overly simplistic terms.

“If it’s not Government, it’s not safe,” she said noting that risk is often viewed as binary “safe or risky” rather than along a spectrum.

She warned that lack of understanding contributes to low participation levels, with Jamaica currently having about 380,000 equities accounts, roughly 14 per cent of the population, while secondary market trading remains thin. Additionally, while the use of credit ratings has increased, there is deeper cultural resistance to transparency, which continues to slow progress. She argued, deeper capital markets will require businesses to embrace greater openness and investor-focused communication.

“A regional capital market cannot deepen unless our businesses evolve towards greater openness, accountability, and investor-friendly communication so that investors can understand what they are investing in,” said Tait.