Finance Minister reiterates SSL demise poses no systemic risks to Jamaica’s financial system

Durrant Pate/Contributor

Finance and the Public Service Minister Dr Nigel Clarke has declared that Jamaica is not seeking any help from its overseas partners to pay the overseas experts being called in to help probe the deepening multi-billion fraud at investment and brokerage company, Stocks and Securities Limited (SSL).

Clarke disclosed on Monday (January 23) that the Government has called in the United States Federal Bureau of Investigation (FBI) and other international bodies to assist in investigating the fraud and meltdown at SSL, which was taking place over a 13-year period.

Speaking at the Jamaica Stock Exchange 18th Regional Investments and Capital Markets Conference at The Jamaica Pegasus hotel yesterday (January 25), Clarke was strident that Jamaica will pay for the services of these foreign experts, including forensic specialists, to determine the length and breadth of the fraud, out of its own pocket.

No hand-outs being sought

“We not looking for hand-outs; we are prepared to pay for those resources with [our] own budgetary resources,” Clarke declared.

“We, having requested this form of technical assistance… we signaled that we not looking for you to give us any financial resources to help us. We just need you to help us identify the kind of forensic expertise that exists and we are prepared to pay for it.”

He defended the new regulatory framework for the financial sector, unveiled on Monday, whereby the Bank of Jamaica (BOJ) will become the sole regulator of the financial sector, thus replacing the Financial Services Commission (FSC) as the regulator of non-deposit taking financial institutions.

The finance minister argued that the regulatory regime being roled out is reflective of the structure of Jamaica’s financial sector, noting that the sector has a structure that is different, emphasising that generic comparison won’t work for Jamaica.

He made the point that the regulatory environment has to reflect the fact that most of the financial resources in Jamaica are controlled by conglomerates, urging the financial players in the island, like those attending the conference, to sensitise the Jamaican public along with investors about market conduct and consumer protection.

Clarke spoke of the need to have an agency to ensure that there is ethical conduct and consumer protection in the financial sector.

This is the new role to be performed by the revamped FSC, which Clarke argued would be a credible, visible institution that is responsible for ethical conduct and consumer protection across the financial service sector in Jamaica.

He acknowledged talk on the streets from people concerned about market conduct within the financial sector.

Regulatory buffers being put in place

Clarke reiterated that the Andrew Holness administration “is putting in place the kind of regulatory buffers that are appropriate for our situation and circumstances… . We will be engaging with the industry with the finer details of the structure of the regulator.”

He made the point that there already exists an appeals process which will only be strengthened in this current process of reform.

Clarke reiterated that the state of SSL presents no systemic risk to Jamaica, as its portfolio represents a mere two per cent of the total investment portfolio of non-deposit taking institutions in the island.