(Extracted from the Business Observer – Jan 9, 2015)
THE Jamaica Stock Exchange will be launching its online trading platform in April with the aim of increasing its trading volume across the diaspora.
The platform will allow individual investors to buy and sell securities such as stocks, options, bonds and mutual funds, as well as manage and review portfolio transactions on the JSE. Currently, online trading is a function limited to stockbrokers as a result of various restrictions and highly priced transaction fees.
"This initiative is based on investors' requests, and I expect that we will see an increase in the number and types of investors accessing the market and the participants," JSE General Manager Marlene Street-Forrest told the Jamaica Observer in an e-mailed response to questions.
With the electronic trading platform, investors and potential investors will have easier access to investment trading and will be required to pay only the two per cent charged by brokers. Ultimately, the new development will allow investors to monitor their activities without the hassle of going to brokers' offices.
However, Street-Forrest added that each transaction must be settled by a broker and will be executed only on business days between the hours of 9:30 am and 1:00 pm.
"You are able to request and release funds from your account with your broker, but you must develop a relationship with your broker to ensure that the process is seamless," Street-Forrest told Caribbean Business Report.
Any trading that occurs online is subject to the current market rules, including those for clearing and settlement of trades. When an order is placed, it will be routed to the online trading server, which will pre-validate the order, which is then routed to the respective broker for further validation.
The broker system will then return the results of the validation to the online trading server, which will submit the order to the trading platform and the investor will be notified when the order is queued.
"Once the order is executed, you will be notified," she added.
Since 2012, the JSE has been positioning itself for increased revenue with the launch of a US dollar-denominated market and its bond trading platform. Still, the stock trading company seems to be far from its target with only two listings on each platform over the last two years.