Jamaica, Canada stock markets to allow direct access

Jamaican brokers will soon be able to buy stocks listed in Canada without using a Canadian broker as an intermediary under a reciprocal arrangement that will also see Canadians being able to trade stocks on the Jamaica Stock Exchange, JSE.

It will likely result in lower fees for local investors vying for stocks in the Canadian market, but the extent of the fee reduction remains under discussion, the Financial Gleaner understands.

“People are excited,” said a seasoned trader at a boutique brokerage house in New Kingston, but “rates are still an ongoing debate,” the person said.

There are six exchanges in operation in Canada, including the Toronto Stock Exchange, TSX Venture Exchange and the Canadian Securities Exchange.

Some Jamaican brokers already facilitate the purchase of Canada stocks by clients, said a manager at a large brokerage house, but “different brokers will have different limits,” he said.

Those limits tend to be based on the relationship the brokerage firm has with a Canadian counterpart or whether the local broker utilises online platforms with access to many equity markets, such as Interactive Brokers.

Word of the Jamaica-Canada collaboration was first announced in Canada during a visit there by JSE officials near the end of August.

“We have a relationship with the Canadian Securities Depository to settle the transactions,” said JSE Chairman Ian McNaughton.

“We will provide direct online trading for investors in both countries,” he said.

The JSE added this week that the collaboration would both make it easier to execute stock transactions and allow brokers to develop Canadian stocks as a product line.

Orders will be entered through a unique interface on the respective exchanges, specific to such transactions, JSE Group Managing Director Marlene Street Forrest told the Financial Gleaner.

The JSE is setting up a direct market access platform which will allow brokers in Jamaica to purchase directly for their portfolio without having to request a broker in Canada to put through the trades.

“This will be facilitated through a direct market portal and enabled by two major banks in Canada, for trading and settlement, and the Canadian Depository Service, of which the Jamaica Central Securities Depository is a participant,” Street Forrest said.

The terms of the collaboration will be outlined in an Electronic Access Agreement that Street Forrest said will be signed shortly.

Canada correspondent Radcliff Robinson contributed to this story.

steven.jackson@gleanerjm.com