In my contribution in the Senate on March 27, 2026 to the recent Budget Debate, and earlier in the discussions surrounding the temporary suspension of the fiscal rules, I spoke to the importance of modernising Jamaica’s financial sector framework to better enable the flow of domestic capital into productive investment.

In her opening of the Budget Debate, Minister of Finance Fayval Williams signalled a clear policy shift in that direction. The announcements were widely welcomed across the financial services sector, reflecting years of consistent advocacy by industry bodies, including the Jamaica Securities Dealers Association. They are timely, necessary, and represent a meaningful step forward.

But as with all reforms of this nature, the ultimate impact will depend not on what has been announced, but on whether the conditions required for execution are put in place with equal urgency.

A MEANINGFUL POLICY SHIFT

The measures outlined represent a substantive recalibration of how domestic institutional capital can participate in Jamaica’s development. The phased increase in pension fund limits for private assets from 5 per cent to 7.5 per cent, and ultimately to 10 per cent, has the potential to unlock tens of billions of dollars in long-term capital. This is capital that can be directed into infrastructure, housing, and productive enterprise.

The targeted expansion of foreign asset limits, particularly toward foreign currency securities issued by Jamaica companies, reflects a balanced approach to managing currency exposure while strengthening domestic capital formation.

Equally important is the proposed reform of the insurance investment framework. Moving away from rigid, multi-condition requirements towards a more flexible approach materially expands the range of corporate investments available to insurers.

Taken together, these measures acknowledge a central issue: Jamaica does not lack capital. What has been missing is the framework to allow that capital to move efficiently in support of national development.

WHAT THIS MEANS FOR JAMAICANS

While these reforms are technical, their implications are potentially very real for economic prospects and quality of life of everyday Jamaicans. For individuals contributing to pension schemes and insurance products, expanding the investable universe allows for better portfolio diversification. Over time, this could translate into stronger and more stable returns and improved retirement outcomes.

For the country, more broadly, the impact is equally important. When domestic capital is mobilised into infrastructure, housing, energy, and private enterprise, it supports job creation, improves access to services, and contributes to sustained economic growth. Lower financing costs and longer-term funding structures can make projects more viable, ultimately benefiting communities across the island.

THE RISK: CAPACITY WITHOUT DEPLOYMENT

However, there is a real risk that these reforms increase capacity without leading to real investment on the ground. Simply put, capital does not move just because it is allowed to. It moves when there are opportunities that make sense.

For pension funds and insurance companies, that means projects that are well-planned, financially sound, and capable of delivering steady returns over time. These institutions are managing the savings of Jamaican people, so they must invest carefully.

Right now, one of the main challenges is not the availability of money, but the availability of projects that are ready for investment.

Too often, projects stall because:

• they are not fully developed at the planning stage,

• risks are not clearly shared between public and private partners,

• procurement processes are slow or unclear, or

• execution timelines are uncertain.

If these issues are not addressed the reforms will create more room to invest, but not necessarily more investment.

If the Government is serious about attracting private capital, projects must be brought to market in a way that gives investors confidence they can be delivered properly.

LEGISLATIVE FOLLOW-THROUGH CRITICAL

Many of the reforms outlined will require regulatory amendments and, in some cases, legislative changes to take full effect.

In recent years there has been a gap between policy announcements and implementation. For investors managing the savings of Jamaicans, uncertainty can be just as limiting as restriction.

If these reforms are to deliver real results, there must be:

• clear timelines for implementation,

• coordination across institutions, and

• a sustained focus on execution.

Ultimately, timely follow-through is what will determine whether these changes translate into tangible benefits for the economy and the people.

AREAS REQUIRING FURTHER ACTION

While the direction of reform is clear, some areas will require further refinement.

The capital adequacy framework for securities dealers is one such area. Currently, certain rules can result in capital charges that are higher than the actual risk of the underlying assets, particularly for high-quality securities. This discourages trading activity and reduces liquidity in the market.

Similarly, the regulatory approach to collective investment schemes remains overly rigid in some respects.

Proposed limits on large investors within funds do not directly address the real issue, which is liquidity risk. A more effective approach would be to use tools such as notice periods and better matching of assets and liabilities within funds.

Addressing these areas will help ensure that the broader reforms translate into stronger, more functional markets.

WHAT MUST HAPPEN NEXT

To ensure that these reforms deliver meaningful outcomes for the Jamaican people, the next phase should focus on a set of clear priorities:

1) Rationalise capital adequacy treatment: Align capital requirements more closely with actual risk.

Impact for Jamaica: More active markets, better pricing, and lower financing costs for businesses, supporting jobs and growth.

2) Implement a Risk-sensitive concentration framework: Move from blunt limits to a system that reflects the quality of investments.

Impact for Jamaica: More investment in high-quality local projects and companies.

3) Modernise collective investment scheme regulation: Replace rigid limits with better liquidity management tools.

Impact for Jamaica: More savings can be channelled into productive investments.

4) Accelerate legislative and regulatory implementation: Set clear timelines and accountability for execution.

Impact for Jamaica: Faster delivery of projects and quicker economic benefits.

5) Build a pipeline of bankable projects: Improve project preparation and structuring, especially for public-private partnerships.

Impact for Jamaica: More infrastructure, more housing, more jobs, and stronger growth.

THE OPPORTUNITY AHEAD

The reforms announced by the minister represent a meaningful and commendable step forward. They reflect a recognition that domestic capital must play a central role in financing Jamaica’s future, and that the regulatory framework must evolve to support that role. But unlocking capital is only the first step.

The real measure of success will be whether that capital is deployed, efficiently and at scale, in a way that delivers tangible benefits to the Jamaican people. Because capital will not move because it is allowed to. It will move when the conditions are right. And creating those conditions must now be the priority.

Ramon Small-Ferguson is the chief executive officer of Barita Investments Limited, president of Jamaica Securities Dealers Association, a senator, and deputy Opposition spokesperson on finance.