The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Securities Commission’s newly-appointed interim chief yesterday said he would “definitely focus” on whether publicly listed companies were meeting their legal requirements on the timely disclosure of material information.

Speaking to Tribune Business in just his second day as the regulator’s temporary executive director, Hillary Deveaux said he was “unsure” whether all BISX-listed issuers were complying with their statutory disclosure requirements.

Questioning whether Bahamian investors, and even some publicly-listed companies, understood the need to disclose information that might impact a company’s share price and/or performance, Mr Deveaux pledged to address this “in short order”.

“It’s something we have to focus on a lot more going forward; the capital markets itself,” he told Tribune Business, “as I’m not sure material information is being disclosed to the public as per the disclosure requirements in our legislation.

“It’s something we have to deal with in very short order. It’s an educational process. We need to get the educational programme back in stride, as I don’t think the investing public has a clear understanding of what should be happening as it relates to information disclosure in our markets.

“Sometimes, I don’t know if some public companies themselves understand their disclosure requirements. That’s something that we’re definitely going to be focused on going forward. These things are critical.”

While there has been much improvement over the past decade, one of the biggest - and longstanding - issues with the Bahamian capital markets has been the general level of corporate governance and timely disclosures of material information.

When it comes to the latter, there is often a considerable amount of ‘so-called’ insider information swishing about on the street prior to major developments at a listed company being disclosed to Bahamian investors.

This can give one group of shareholders (who have heard the news) a material advantage over those who have not, and created the potential for a disorderly market.

Mr Deveaux, meanwhile, confirmed to Tribune Business that he had effectively been brought in to act as “a caretaker” at the Securities Commission and bring “stability” to the regulator in the wake of Dave Smith’s departure.

Mr Smith was effectively forced out, as disclosed by this newspaper, amid “industry concerns” about how the capital markets supervisor was approaching its regulatory mandate.

There is nothing to suggest Mr Smith did anything wrong, but this newspaper understands his departure came following a “unanimous” Board resolution.

This came after Tribune Business received numerous complaints from the financial services industry over Mr Smith’s approach, plus reports about tensions between himself and the Board.

Still reviewing internal briefing documents on his second day in the job, Mr Deveaux said: “There are some challenges facing the Commission, of which there are likely more than many, and we need to urgently address those.”

While declining to specify the “challenges”, he added: “It’s just trying to keep up with market developments and make sure they don’t get too far ahead of the regulatory ambit.

“It’s very easy for the market to get ahead of the regulators, and why we have to continuously revisit the laws and regulations.

“That’s a critical part of regulating the market. The challenge is always whether somebody is going to be ahead of the regulators, and could potentially cause serious harm to the investing public.”

Mr Deveaux previously stepped down as Securities Commission executive director in August 2010, and yesterday said there had been “some very positive changes” in the three years he had been away.

“When you look at the expertise within the Commission, there has been some improvement, so the training effort has been very good,” he added.

“When you look at it, we’ve really got some good people in the Commission and that’s a big bonus.”

And with a Board willing to work with the management, and address the challenges facing the Securities Commission, Mr Deveaux said the regulator had “a bright future”.

Although the Securities Commission had yet to begin advertising for a long-term successor to Mr Deveaux, the new incumbent expressed hope that the recruitment process would start “pretty soon”.

“It took over a year after I left to identify and appoint an executive director,” he said. “I’m hoping this process will be much shorter than that.”