Company 'ignorance' cited for JSE rule breaches
Published:Wednesday | May 4, 2011 | 12:00 AM
Listed companies broke more Jamaica Stock Exchange rules last year, but the infractions were largely due to ignorance of filing requirements for financial reports, said chief regulatory officer Wentworth Graham.
The JSE's Regulatory and Market Oversight Division (RMOD) counted 133 breaches, up from 123 in 2009.
Some 46 ordinary stocks traded on the exchange, plus 18 preference stocks, only three of which are not linked to an ordinary listed company.
Most of the infractions committed related to non-inclusion of explanatory notes to interim financial statements, as laid out under the International Accounting Standards (IAS) 34 accounting rule, as well as omission of the list of directors and shareholders, Graham said.
"These were just mere oversights involving such things as not filing on time and with the correct documentation," the chief regulator told Wednesday Business.
"As soon as we made contact, the errors were remedied."
RMOD was established two years ago to monitor trading activity and regulate listed companies.
Most infractions in 2010 came from broker members, 27 breaches; and listed companies, 88, whose infractions were mostly related to IAS 34.
The accounting rule, which deals with interim financial reports, defines the minimum content as condensed balance sheet, condensed income statement, and condensed statement showing either all changes in equity or changes in equity other than those arising from capital transactions with owners and distributions to owners.
RMOD, using an automated market-surveillance system, monitors member dealers' trading activities, investigates trading activities and enforces the exchange's rules.
In a newsletter summarising its 2010 performance, the JSE said the function of the regulatory unit, "contributed to Jamaica's creditable rankings" in certain categories of the 2010-2011 World Economic Forum Global Competitiveness Report, including its ranking of 23 of 139 countries under regulation of securities exchange.
At this ranking, the JSE stated, Jamaica was one notch below Canada, and a few below countries such as France, India and Brazil.
Under the same category, the agency ranked Jamaica above all its Caribbean counterparts, as well as other countries, such as the United Arab Emirates, Germany and the United Kingdom.