According to a detailed article in the Observer, it appears the FSC ignored warning signs that indicated an intervention at SSL.
The SSL is a member-dealer and broker of the Jamaica Stock Exchange. Therefore, it must submit monthly and quarterly returns and disclosure on its excess net free capital (ENFC) position. Last Thursday, January 19, 2023, the Jamaica Stock Exchange’s Regulatory Market and Oversight Division (RMOD) published its October 2022 report, revealing that a broker had fallen into a capital deficit for September. In addition, it showed a broker had dropped into a capital deficit between March and July before falling into the ENFC range of $0 to $299 million for August. Also, there were four other brokers in that range. The JSE’s benchmark is five percent for ENFC.
When the Jamaica Observer checked the 15 JSE brokers with publicly available financials and disclosures, 10 complied with regulatory capital requirements. And Four of the other five told the Sunday Observer that they were in compliance with JSE and FSC capital requirements during 2022. But the only broker they could not reach for a response was, you guessed it, Stocks and Securities Limited.
SSL was also cited by the RMOD for an incomplete May filing in that October report and numerous times in 2022 for other breaches.