The Government of Jamaica will no longer need to provide financial support to Stocks and Securities Limited (SSL) amid the ongoing fraud investigation.
This comes as an insurance claim made by SSL earlier this year has been settled, resulting in a US$1 million payout on Thursday, September 7.
Finance Minister Dr Nigel Clarke confirmed on Tuesday, September 19, that the payout has enabled SSL to cover the remainder of its August staff salary bill, which was settled on Monday, September 11.
The insurance claim was filed by the temporary manager of SSL in April 2023 with the company’s overseas insurers in England. However, the payout from the overseas insurers has come five months later, and represent the maximum limit claimable under SSL’s insurance policies.
Importantly, the insurance payout has come before the Financial Services Commission (FSC) could finalise the steps required to provide short-term support to the company. Consequently, the FSC no longer required to render assistance, and SSL’s net salary bill for August was paid without government financial support.
Return of client balances
SSL also announced plans to return client balances and reduce staff as part of the ongoing restructuring.
Starting on Friday, September 22, SSL will begin the process of transferring Jamaican-dollar client securities from SSL’s custody to other security dealers selected by clients, and any Jamaican-dollar cash balances in client accounts will be transferred to banks specified by clients.
Clarke added, “While we expect up to one-third of Jamaican-dollar client balances to be transferred within days, the entire process could take up to six weeks to be completed, given the volume of client accounts.”
The transfer of United States-dollar securities owned by SSL clients will require collaboration with US-based regulators and investment houses and is expected to take more time.
The Jamaica Central Securities Depository and the Jamaica Stock Exchange are working with the temporary manager and the FSC to facilitate the transfer of Jamaican-dollar securities and balances. SSL clients will be required to complete the relevant Know Your Customer documentation. SSL will communicate directly with clients on the procedures to be followed.
Regarding SSL’s staff, the firm is anticipating a significant reduction in its workforce, from 22 employees currently to no more than eight employees by the end of November.
The complete removal of SSL as a contingent liability of the Government of Jamaica depends on a final determination by the court regarding authority over SSL – whether it is the FSC’s appointed temporary manager or the SSL board-appointed trustee.