The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Central Bank is becoming the seventh BISX broker/dealer member in the latest step towards the eventual listing and trading of government debt via the stock exchange.

The Bahamas International Securities Exchange (BISX), in a statement, confirmed that the Central Bank is not becoming a member to conduct securities trading on behalf of individual investors. Instead, the move is part of the broader effort to list Bahamas Registered Stock (BRS), which is debt issued by the government, on BISX.

The Central Bank’s membership will allow it to trade directly in the secondary debt market should it see the need. Primary issues will still be carried out through the Central Bank as issuing agent for the government.

Keith Davies, BISX’s chief executive, said: “We are extremely pleased to welcome the Central Bank of The Bahamas as our newest member. This is a momentous day in the Bahamian capital markets, as the Central Bank takes this action which allows it to transact directly on the exchange.

“When considered in conjunction with the upcoming listing of all BRS on the exchange, and the dematerialisation of all BRS, these initiatives position the Central Bank to continue to modernise its monetary policy framework. In the long term, these moves will promote the creation of a market-driven yield curve in The Bahamas that should allow all other securities to be priced more efficiently.”

Mr Davies continued: “The Central Bank went through a modified due diligence process compared to a private entity. We applied our membership rules and modified them in instances where the items were not relevant; for example. in requiring proof of registration with The Securities Commission of The Bahamas.

“In the end, as with any other applicant, we presented all relevant information to the BISX membership committee who made the decision to approve the Central Bank. We would like to thank the governor and staff of the Central Bank for their assistance during this review process.”

John Rolle, the Central Bank’s governor, said: “Through the bank’s presence on the exchange, we wanted to ensure that there continued to be ample liquidity in the secondary market for government securities. Retail investors, particularly, must be able to complete trades without delays.

“As necessary, the Bank will step in as counterparty to trades, to minimise execution delays. In the first instance, though, the bank will only quote its bid and offer rates, and allow market participants to conclude their own trades in mutual agreement with these rates or through a price discovery process that uses these rates as a baseline. Otherwise, the bank continues to be the registrar for government bonds and will perform this function for all such trades executed over BISX.”