Business View Caribbean
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forms of financing other than debt financing for com-
panies in the productive sectors that drive the econo-
my within the Eastern Caribbean. So, the Central Bank
set about creating the securities market, developed
the Exchange, the depository, the regulatory commis-
sion, and got the Securities Acts drafted for enactment
by the member countries. And in 2001, the Exchange
was launched.”
A securities market is like any other market where buy-
ers and sellers meet to exchange goods and services.
The buyers (investors) are individuals and institutions
who have money (capital) to invest. The sellers are
corporations, governments, and other investors. “The
Exchange provides a facility for people to buy and sell
securities, financial assets, including equities, i.e.
shares in companies, and debt securities, which are
bonds issued either by member governments, or by
corporations within the Eastern Caribbean Currency
Union – the eight member states of the OECS that are
members of the Central Bank and use a common cur-
rency - the Eastern Caribbean dollar,” Blake explains.
“We have a mix of institutional and retail investors.
The retail investors mainly are in the equities side of
the market; most of the institutional investors are ac-
tive in the debt side of the market.”
The ECSE provides both a primary and a secondary
securities market. In the primary market, a public
company or government (issuer) sells its securities for
the first time to investors to raise capital to support
its operations. The funds generated from this sale of
securities go to the issuer. In the secondary market, in-
vestors buy and sell securities among themselves. The
proceeds from this trading activity go to the investors,
not back to the original issuer.
Currently, the ECSE has 13 companies listed – 12 do-
mestic companies and one cross-listed company from
Barbados. “Our Exchange is slightly different from
many other exchanges in the rest of the CARICOM (the
organization of fifteen Caribbean nations and depen-
dencies) in that our listings are predominantly debt
securities,” Blake says. “We have a very active govern-
ment securities market and we have over 100 debt
instruments listed - a mixture of government and cor-
porate bonds; which is different from most exchanges
that trade predominantly equities.”
The ECSE is a fully electronic exchange, and according
to Blake, it was the first regional one established in the
Western Hemisphere. That means that all securities
are traded in a “dematerialized” form – investors do
not need to hold physical certificates to confirm proof
of ownership as all shares are held in electronic form
at the Eastern Caribbean Central Securities Registry
Ltd. (ECCSR), a subsidiary of the ECSE. “And that lends
itself easily to cross-border operations,” Blake states.
“Trading is done remotely by brokers on their various
islands, logging onto our application. And all securities
traded in our market are completely dematerialized -
there are no physical securities; they’re all held and
traded fully electronically across boundaries.”
Recently, Blake says that the ECSE has been working
on restructuring some of its functions in order to pro-
vide better service for its clients. The consolidation of
AT A GLANCE
WHO:
The Eastern Caribbean Securities Ex-
change
WHAT:
A regional securities market for the mem-
ber states of the OECS
WHERE:
Headquarters in Basseterre, St. Kitts
WEBSITE
:
