Having spent $6.6 million on an automated market surveillance system, the Jamaica Stock Exchange (JSE) has now strengthened its Regulatory and Market Oversight Division (RMOD).

Launched last week, the system will facilitate regulatory oversight and also further plans by the JSE to integrate the region's markets through the Caribbean Exchange Network.

According to the JSE's Chief Regulatory Officer, Wentworth Graham, the automation of the RMOD's market survey activities provides real time information on trading activities done on the JSE, particularly as they relate to possible market violations. Other features, he said, allow for the general maintenance of the system including demographic information on directors and their connected parties and the uploading of data on principal accounts - those owned by member dealers and staff to ensure that their activities are in tandem with the Securities Act.

"It is expected to advance the operations of the stock exchange and specifically the regulatory and marketing division by reducing the time it takes to get data on market activities that could lead to investigation of infractions." Graham said.

Suspicious trading activities

"It also give the RMOD an opportunity to store critical market intelligence, market assessments and other information in a database."

The RMOD automated surveillance programme, the JSE official has said, facilitates the tracking of suspicious trading activities with a system of alerts including chimes and a colour code.

There is an alert for trades done during what is referred to as the blackout period by directors and connected parties. Another tracks wash sales or trades which are done on accounts that do not reflect a change in the beneficial ownership but impacts the market.

There is an alert for circuit-breakers, that is, the JSE cap on how much a stock price can move during a trading period. Currently, this is 15 per cent above or below the stocks effective price at last sale.

The system also creates an alert for what is termed, marking the close. That is where an infraction, which arises when a trade at the close of the market creates an unexpected swing in the trading pattern.

"From this we can look closer at parties in transactions, companies involved and other information which will allow us to analyse any possible infraction." Graham stated.

avia.collinder@gleanerjm.com