By Susan Smith, Staff Reporter
Street
IN RECENT times, the Jamaica Stock Exchange (JSE) has stepped up its vigilance in ensuring that all the players involved adhere to its rules and practices.
Several executives have felt the effects of this renewed vigilance when their actions concerning stock options were revealed.
Moreso, the JSE's suspension of the Dyoll stock, a little over a week ago, has attracted varying explanations from the financial community on that decision.
Mindful that the JSE seeks to continually educate the public
on the stock market, Sunday Business spoke with the JSE's general manager, Marlene Street. "The JSE's mandate is to ensure that the market is conducted in good order to protect the investor and the company and enhance the growth of a capital market," said Ms. Street.
SHARE ASSETS OF EXECUTIVES
Concerning the prudence of disclosing information on senior managers' and executives' stakes in companies, Ms. Street believes that this type of disclosure does not harm a company.
"Serious investors are inclined
to invest in a company which
discloses more and those always tend to be the better-managed
companies, she explained. She pointed out that in every aspect of disclosure, there will be possibilities for some negative outcomes.
WHY IS A STOCK SUSPENDED?
With regard to the suspension of the Dyoll stock, Ms. Street said the JSE took action because of the rumours in the market place. She said the JSE must make immediate disclosure of any unusual trading of the
market in the price and volume of the share. The act of suspending a stock is not out of malicious
reasons, she reassured.
In fact, Ms. Street explained that where there is an increase or decline in price, the JSE has a circuit breaker which prompts the regulators of a price amount going below and above 15 per cent of the normal trading price.
"The JSE is guided by marketing and statements, so that if a false market comes to fore, we have to make sure all persons have the same information," she said.
Sometimes information is given to justify the movement in price or volume she explained. Where there is some judgement call, the rules of the JSE state that a company can come and bargain with the JSE, she further disclosed.
Echoing the rules in Appendix 8b of the JSE rule manual,
Ms. Street reiterated that
the stock exchange recognises that decision on disclosure
requires careful and subjective
judgement.
"We are not saying a company must lay out everything, even if it becomes detrimental to the company," she clarified, "We are just against the practice where some players are privy to
information and others are not."
She said the listing agreement speaks to responsibility of
the company and speaks to
disclosure of timely information to shareholders.
Companies planning to list would not advertise their share price to the public, until a prospectus has been done, warns Ms. Street. However, the company is allowed to inform the public of its intention to list after notifying the regulators at the JSE and getting their approvals.
Ms. Street pointed out that without listed companies, there would be no growth of the
capital market. "The JSE helps companies to see how they can increase their efficiencies in a global market."
