FSC: Entities listed in 2020 letter with SSL adequately capitalised Loop Jamaica

The content originally appeared on: Jamaica News Loop News

The Financial Services Commission (FSC) has said that entities referenced in a letter, along with Stocks and Securities Limited (SSL) to the Ministry of Finance and Public Service, are adequately capitalised.

The FSC on Tuesday said it is aware of public concern arising from the media’s disclosure of a letter dated April 3, 2020, to the Ministry of Finance and the Public Service accompanying the on-site examination reports for six securities dealers.

The FSC said it conducts routine examinations, and it is customary to identify areas to be addressed.

The other entities listed in the letter include BPM Financial Limited, NCB Capital Markets, Jamaica Money Market Brokers Securities, Sygnus Capital and NCB Capital Markets (collective investments schemes).

“It is important to note that the other entities referenced in the letter are adequately capitalised and therefore, above the benchmark capital adequacy ratio.”

The FSC went on to note that the FSC does not have a basis at this time for any concerns regarding solvency at these entities.

The firms were among a list that also included Stocks and Securities Limited (SSL), which is currently the subject of a nearly $3 billion fraud investigation.

Concurrently, Finance Minister Dr Nigel Clarke has assured that Jamaica’s financial sector remains strong, well-capitalised, and resilient amid the fraud scandal.

He said information from the FSC indicates that 38 licensed security dealers are operating in Jamaica, with assets under management exceeding $1.45 trillion.

Finance Minister Dr Nigel Clarke

Clarke noted that the extent of the alleged fraud at SSL, initially estimated at more than $2 billion, represents one of the largest involving a securities dealer since the FSC was established nearly 30 years ago.

He also said that while the assets managed by SSL represent just over two per cent of the total under management by securities dealers, “this does not minimise anyone’s loss”.

He maintained, however, that SSL was a relatively small securities dealer, and its problems “do not pose a systemic risk to the financial system”, hence “there is… no need for panic”.