The revised Retail Withdrawal Agreement is part of the Jamaican government`s (GOJ) reform strategy for the financial sector to reduce the risk of loss for clients who invest in retail buyback contracts if securities dealers do not repay clients` money. This has an impact on the treatment of assets used to secure repo investments. The new framework aims to provide greater protection for retail pension clients by depriving the trader, for the duration of the contract, of control of the assets underlying retirement and making them available to an independent agent. The amendments have effects on clients who invest in deposits, in which NCB Capital Markets grants the client advantageous interest (i.e. the right to obtain advantages over the assets of another party) on the securities, instead of selling or transferring them directly to the client. This type of repo has been called Retail Repurchase Agreements (Retail Repo) by the rules. The reform affects all securities dealers and is led by the Financial Services Commission. Please note that if you do not wish to be part of the revised retail pension structure, depending on the rules, you cannot have a repo account with a securities dealer. By accepting the new MRRA, clients authorize NCBCM to transfer the underlying securities of their deposits into the trust agreement as soon as it takes effect. NCBCM is committed to all of its clients signing the new MRRA to comply with the 2014 Retail Securities Regulations. The transition of investors with retail deposits into the new structure is scheduled for June 2015. JCSDTS Limited will hold the assets in «trust» from August 2015. All securities dealers must be compliant by August 31, 2015.
In this context, the Government has revised the provisions of this framework and introduced the Retail Repurchase Agreements Regulations 2014 to improve the legal and regulatory framework applicable to the retail repo market. Minimum transaction size – Investors must now have at least $1,000,000 or $10,000 to invest in a retail repo. All retail pension clients must open accounts with the JCSDTS in order to facilitate the custody of securities and provide us with a copy of their Government of Jamaica Taxpayer Registration Number (TRN), unless they have already done so, as this is mandatory for opening an account at the JCSDTS. If you do not currently have a NRT, please visit the Tax Administration Jamaica (TAJ) website at www.jamaicatax.gov.jm for information on how you receive your NRT. Each customer receives a unique JSCSDTS account number, different from your VMWM repo account number. This JSCSDTS number is a unique account number that allows you to monitor your transactions independently through the JSCDTS online portal. Under this new mandate, all securities dealers must take over the new Retail Repo structure and ensure that all Retail Repos are compliant until 31 August 2015. In addition, the transition of existing customers with Retail Repos to the new structure will begin on June 30, 2015. At that time, there are no fees or charges to be paid as a result of the review. However, in the future, processing fees may be levied due to the threat of fees imposed by the JSCDTS on investment dealers.
The Financial Services Commission (FSC) has improved the regulatory and supervisory framework governing repo transactions for individuals in Jamaica through the Securities (Retail Repurchase Agreements) Regulations, 2014. . .