The International Securities Market (ISM) is a market for the listing and trading of securities of issuers which may or may not be incorporated in Barbados that would otherwise be listed and traded on other exchanges around the world. The ISM will fall under the regulatory umbrella of the BSE – a self-regulatory organization, which is regulated by the Financial Services Commission (FSC). The ISM will have its own separate operating structure and rules governing the listing and trading of international offshore products.

Participants in the ISM are likely to be International Business Companies which would be regulated by the BSE for their actions and obligations under the Rules of the ISM and continue to be subject to prudential regulation by the Central Bank of Barbados (CBB). They would also be regulated by the Financial Services Commission for take-overs, insider trading and market manipulation. This would enable the BSE to ensure a strong regulatory focus for the ISM absent in less well-regulated offshore international centers.

There are three categories of participants in the ISM:

  • Trading Participants
  • Listed Issuers
  • Listing Sponsors

The range of products that will be considered for listing on the ISM includes:

  • Equity Securities,
  • Debt Securities; and
  • Investment Funds

The establishment of the ISM will be beneficial not only to the international business community but to the Barbados economy. It is a vital step towards making Barbados the premier capital market hub for the region and supports Government’s recognition of the important role the IBFS plays in the development of this great nation. The benefits to be derived by Barbados from the ISM are as follows:

  • Strengthens and expands possibilities for the existing international business community.
  • Raises the profile of Barbados internationally as an international financial centre and further solidifies Barbados as an international business destination.
  • Raises the possibility of attracting new types of international business to Barbados.
  • Encourages positive use of the numerous double tax treaties.
  • Enables new types of business to be undertaken such as Listing Sponsors.
  • Catalyst for changing dated legislation and possibly assist in removing obstacles to company registration.
  • Creation of new jobs and opportunities for persons with specialized skills.
  • Creates a ‘One Stop Shop’ for the international business community.
  • Additional tool to the Invest Barbados toolkit for selling the Barbados Brand.
  • Assists in future double tax agreement negotiations and trade agreements.
  • Enhances the current international financial services infrastructure with new and updated legislative framework.

The benefits to be directly derived by the BSE include:

  • It expands the range of instruments listed on the BSE.
  • It brings to membership a new group of participants from the international business community both from within Barbados (the international offshore banks) and externally (remote members).
  • It creates new trading opportunities for existing members.
  • It raises the profile of the BSE both in Barbados and throughout the world.
  • It strengthens the position of the BSE in the Caribbean and moves the BSE from being a purely domestic exchange to an international one.
  • By launching ISM now, it makes it more likely to attract participants from Trinidad and Jamaica. If they get their international offshore markets off the ground before the ISM, those participants are less likely to join.
  • Looking at future profits prospects, it will strengthen the value of the shares of the now demutualised BSE.

Support from the international business community is a critical element in the success of the ISM, as they will be the primary users of the market. All premier locations where international business is conducted successfully are complimented by a well established and functioning international capital market affording offshore companies the opportunity to contribute more, not just to the sector, but also to the economy as a whole. The establishment of a vibrant ISM will add great value to the existing IBFS and lend itself to greater expansion of and deepening of the capital market in Barbados.

We have had many ISM discussions in the past to garner support for the ISM. Our intent then, is as it is now, ensure the success of the ISM and position it as a key element essential to the development and sustained growth of the IBFS and the Barbados economy.

On December 22, 2015, the Rules of the International Securities Market were approved by the FSC. The ISM is set to move from being a concept to a reality, enabling the vision of a better Barbados to become a certainty.

About the Author

Marlon Yarde JP, FCPA, FCA, LL.B (Hons), LL.M, FCIS.
Marlon Yarde JP, FCPA, FCA, LL.B (Hons), LL.M, FCIS. - Managing Director of the Barbados Stock Exchange Inc. (BSE) and its subsidiary, the Barbados Central Securities Depository Inc. (BCSDI)

Over a fifteen-year tenure, Marlon Yarde has spearheaded a number of developments, including: the BSE’s demutualization, the launch of the International Securities Market and the BSE’s current strategic goal of facilitating Digital Asset trading on the Exchange.