New year, new rules.
That sums up the start of 2014 for the Barbados Stock Exchange (BSE), its members, listed companies and investors.
The BSE said its new domestic rules had been approved and would become effective next Monday, while corporate governance recommendations and insider trading guidelines for listed companies became enforceable last Wednesday. BSE officials said the new body of rules replaced those in place since the organization’s predecessor, the Securities Exchange of Barbados, was established in 1987.
They were approved by the Financial Services Commission on November 13 last year for the governance of members and listed companies of the domestic market of the BSE.
“These. . . are designed in accordance with IOSCO [International Organization of Securities Commissions] principles and the Securities Act Cap 318A. of the Laws of Barbados, with the purpose of protecting investors, ensuring a fair, efficient and transparent market, and reducing systemic risk. Should there be any conflict between these Rules and the act, the latter will prevail,” the BSE said.
In an interview with BARBADOS BUSINESS AUTHORITY more than two years ago, BSE general manager Marlon Yarde said the updated rules were to improve the stock market’s overall efficiency.
The changes included public companies having 90 days from the close of their financial year to file audited financial statements with the BSE, 30 days fewer than before. Companies will be allowed 60 days to file quarterly statements.
Additionally, under the new rules, a fine not exceeding $5 000 has been added to the list of possible penalties for any person under the jurisdiction of the BSE who contravenes or is not in compliance with any of the requirements.
Yarde said the Jamaica and Trinidad and Tobago stock exchanges required companies to file interim statements in 45 days, audited annual statements in 90 days, and annual reports in 120 days. He added that while some people may find the proposed 60-day period for quarterly reports to be too generous but “when it comes to year-end financial statements, the factor that the companies might not have control over is when the auditors can come in and actually get the work done”.
One of the new rules coming into force next week specified what companies had to do to maintain their listings.
“In order to maintain its listing privilege, a Listed Company must observe and comply with the Exchange Requirements and must specifically: (a) make timely public disclosures of the interim and audited annual financial statements; (b) keep the exchange fully informed of events and decisions affecting its security holders; (c) disclose material information concerning its business and affairs forthwith upon the information becoming known to management, or in the case of information previously known, forthwith upon it becoming apparent that the information is material,” it stated in part.
This was in addition to the requirement for the listed company to “(d) disclose its approach to corporate governance in its annual report. For this purpose “approach to corporate governance” means a full description of the company’s system of corporate governance with specific reference to such guidelines as may be issued by the exchange from time to time; (e) maintain its solvency and for the purpose of this rule a Listed Company may be deemed to be insolvent in the same manner as a member in Part I, Rule 9.01.1 (1) of these rules; and (f) not have been declared bankrupt within the meaning of the Bankruptcy And Insolvency Act Cap 303 of the Laws of Barbados”. (SC)
