The Tribune

EDITOR, The Tribune

Open letter to Julian Brown

Dear Julian

I read with interest your critique of David Kosoy for his calling BISX “Useless” – a view I myself have sometimes shared.

Of course you are right that the main purpose of BISX is not just to promote trading but rather to raise capital for new ventures.

The problem is, you can’t do one without the other. The chicken must come with the egg. Few companies go public unless their owners feel confident there will be an active trading market for their shares.

As a matter of fact, BISX has not been effective at either task. It has not increased trading and liquidity, and - as you mention - it has not listed the equity of a new company since 2012!

The Board and management of BISX are partly to blame. To my surprise, they have not created a platform for “crowdfunding”, which in other countries allows thousands of small investors to quickly invest a few bucks in start-up companies. They have not even created a “junior market” which in Jamaica has enabled over 30 small concerns to raise capital without the more rigid requirements of a senior listing

Of course BISX is restrained by many factors beyond its control. Government could assign to it and securities dealers the task of issuing and trading public debt. It could compel state monopolies like BahamasAir and ZNS to go public with wide share distributions. It could waive business licence fees for BISX-listed companies. It could even impose a capital-assets tax on the private owners of big profitable businesses who refuse to go public.

Also, our licenced broker-dealers concentrate on their wealthy individual and institution clients with little effort to develop the less affluent sector. It was gratifying to read that you, Julian, will use your new brokerage to make trading quicker and easier for small transactions, and will even enter the risky practice of market-making, where you must commit your own capital to take positions.

You criticised David Kosoy for being the “new boy on the block”, with no local contributions, although he has created the substantial Sterling Financial Group. Perhaps my greatest contribution will be to introduce you to him. You are both smart, aggressive guys who I am sure can find a lot in common to sharpen our financial structures.

RICHARD COULSON

Nassau

November 15, 2018