Standing in front of a room filled with mostly Jamaicans – many of whom work in the domestic financial services sector – Angus Young, in his unmistakable Trinidadian accent, boldly declares a message that must be heard:” Broker-dealers must take ownership of the capital markets.”

With over 20 years of experience working within the region’s financial services sector, including his current role as chief executive officer of NCB Capital Markets, Young is too keenly aware of the negative impact of untamed risk-taking, which leads to speculative investments, can have on the reputation of small island economies like Jamaica and his homeland, Trinidad &Tobago. 

Moreover, rebuilding that reputation in the global investment market can take years.

It, therefore, was with much fervour and seriousness that he told an audience on the opening night of the Jamaica Stock Exchange’s (JSE) 25th Regional Investments & Capital Markets Conference at the Jamaica Pegasus: “There is no motherland coming to save us if we screw up; this is why we must adopt the ‘ownership’ mindset toward the continuous development and safeguarding of our capital markets.”

Retracing to the 2008 global financial crisis, Young reminded the audience that it was broker-dealers who were the major players in intensifying risk-taking by aggressively “trading complex securities, like mortgage-back assets, and [their] reliance on excessive leverage created vulnerabilities.”

“This in turn led to tighter regulations to curb risky behaviours in the future. We, as broker-dealers, cannot let that happen to our capital markets,” he added.

Not too far from home, in the late 1990s to early 2000s National Commercial Bank (NCB) Jamaica – the parent company of NCB Capital Markets – like many other local banks existing in the then ‘Finsac Era’, faced the possibility of bankruptcy or consolidation with other deposit-taking institutions. Such a period was marked by high interest rates, heavy concentration of Government of Jamaica bonds and financial institutions making questionable investments in real estate.

While banks like Eagle Commercial, Island Victoria, Citizens and Workers’ merged into Union Bank before being sold to Royal Bank of Trinidad & Tobago, Century National Bank could not be saved and was closed. As fate would have it, Jamaican-Canadian businessman Michael Lee-Chin purchased NCB in 2002.

Now, with just over a year since taking up residence in Jamaica and leading NCB Capital Markets, Young has developed a greater appreciation for Jamaica’s investment climate and, more importantly, its retail investors.

With this deeper understanding, he is keenly aware that the investing public depends on broker-dealers “to sift through complexities, identify risks and endorse investments”.

As such, Young believes that the gains made by the Government of Jamaica while working with the broker-dealer community over the last decade should not be squandered.

“While we pause to reflect on the past 20 years of this conference, let us also look forward as we envision a future where the broker-dealer community truly owns the goal of securing the ‘invest-ability’ of Jamaican and regional capital markets by making sure our markets are fundamentally sound. As we work together to secure this reality, and as one of the individuals leading the industry, I envision a day when capital in Switzerland and Dubai and similar economies can find a home in the Caribbean,”  declared Young.

In this regard, he called on his colleagues to uphold the principles of transparency, accountability and sustainability.

In an interview with Our Today, he clarified that “the broker-dealer community ought…to take the burden of responsibility of bringing fundamentally sound opportunities to the market”.

He added, “We have the responsibility to make sure that we do things properly and we make our analysis gold standard so that by the time [the investment] gets to market, the retail investors who are relying on us, do so without fear.”

Though Jamaica has a robust regulatory framework for monitoring investments being brought to  market through the Jamaica Stock Exchange, Bank of Jamaica and Financial Services Commission, the “prudential framework” at the institutional level is not always where it should be, Young explained. 

He further pointed out that there are “financial instruments peddled into the retail [investment] segment” despite a lack of understanding on the part of investors. In this regard, he believes that more research, background checks and due diligence should be conducted on the companies offering investments.

Here he is spot on given what transpired with Stocks & Securities Limited (SSL).

People the world over want to know what happened to Usain Bolt’s funds and who is responsible for more than US$12 million going missing.

Asked what else the broker-dealer community  can do to further take ownership of Jamaica’s investment industry, Young, without batting an eye, said, “Financial literacy!”

For the NCB Capital Markets CEO, there is a “great disservice in not teaching” the younger generation about finance at the primary and secondary school level. 

While he is aware that financial education is available in the region’s Caribbean Examination Council’s (CXC) principles of accounting and business curricula, he told Our Today that citizens should be taught “what types of things they need a loan for, how do you apply for a loan, how do you understand the power of compounding interest [and] what is the importance of an early start with the stock market”.

“I don’t want retail investors to be taken advantage of just because a broker-dealer sees some low-hanging fruit and can take advantage of their ignorance,” Young said, clarifying his position.

His advocacy is not at odds with broker-dealers finding creative ways to financially engineer new investment opportunities. In fact, while he welcomes “alpha” investments, whether they be corporate bonds, initial public offers, additional public offers or rights issues, he is adamant that there is a mandate for broker-dealers.

“Broker dealers have the responsibility to ensure private issues are vetted to produce sufficient alpha to investors even while being robust and sustainable at their core. To put it plainly, as broker-dealers, we need to exercise a level of responsibility to ensure that the companies brought to market are fit and proper to go public,” he shared at the JSE conference.