On this January 8, 2025 photograph are from left: Steven Whittingham, chairman of the Jamaica Inventory Trade (JSE); Marlene Road Forrest, managing director of the JSE; and Andrae Tulloch, chief regulatory officer on the JSE’s Regulatory and Market Oversight Division (.Joseph Wellington)
JAMAICA’S Junior Market listings are dealing with rising regulatory scrutiny as delayed audits and repeat compliance failures expose stark disparities with bigger friends, new information present, testing the inventory alternate’s balancing act between market integrity and nurturing small-cap development.
November 2024 enforcement information launched by the Jamaica Inventory Trade (JSE) final month expose stark disparities between the junior and principal markets, with smaller corporations accounting for three-quarters of delayed monetary filings regardless of constituting simply 38 per cent of listed entities.
Andrae Tulloch, chief regulatory officer on the JSE’s Regulatory and Market Oversight Division (RMOD), talking to reporters on the Jamaica Observer Enterprise Discussion board in January, acknowledged the compliance points, particularly because it pertains to Junior Market-listed firms.
“One of many important challenges…is the…delays within the submitting of auditing monetary statements,” Tulloch identified.
Junior Market entities accounted for 75 per cent of all late monetary submissions in November 2024.
Of the eight firms throughout each the Junior and Primary Markets that had been late in submitting their audited financials and/or annual stories for the month, six had been from the Junior Market. These embody EduFocal Restricted, Medical Disposables & Provides Restricted, MFS Capital Companions Restricted, Tropical Battery Firm Restricted, Categorical Catering Restricted, and Fontana Restricted.
By the top of November, two of those firms — Categorical Catering Restricted and Fontana Restricted — had rectified their breaches by submitting their audited stories on November 25 and November 29, respectively. Nevertheless, 4 Junior Market firms — EduFocal Restricted, Medical Disposables & Provides Restricted, MFS Capital Companions Restricted, and Tropical Battery Firm Restricted — remained in breach on the shut of the month. Since then, all have rectified the recognized breaches besides MFS which, as much as February 27, 2025, was the one firm but to kind out its compliance points.
Along with the Junior Market breaches, two Primary Market firms — Pulse Investments Restricted and NCB Monetary Group Restricted — additionally failed to fulfill their audited monetary reporting deadlines. These delays have contributed to broader considerations about well timed compliance with regulatory necessities, which the JSE continues to deal with by enforcement measures and collaborative efforts with stakeholders.
The JSE acknowledges that whereas unaudited stories are usually submitted on time, audited financials pose a better problem as a result of their reliance on third-party verification processes. The alternate has emphasised its dedication to working with listed firms, particularly these on the Junior Market, to enhance compliance charges and guarantee market integrity.
“From the regulator’s standpoint, we’re unable to remove it completely. Nevertheless, by fixed engagement, we’ve got seen the place there have been enchancment in firms who’ve been beneath the whip, and we anticipate to proceed that steady engagement by our orientation classes, by our reminder letters, by our engagement with them once we’re seeing that they’re in issues to have a dialogue to say what is actually taking place,” Tulloch famous.
He went on to counsel that a part of the answer to the issue might imply Junior Market firms have to alter their monetary 12 months to intervals through which audit corporations are much less busy.
“It may be a problem now with the stakeholders taking a look at how they construction their year-end, how they entice extra individuals to enter the audit career,” Tulloch mentioned, seguing right into a broader challenge — the dearth of enough auditors or availability of accountants in Jamaica to audit the businesses on time. The Institue of Chartered Accountants of Jamaica (ICAJ) has famous the issue in earlier stories within the
Jamaica Observer and likewise recommended that the JSE might differ the reporting time for firms to assist compliance.
“I do imagine there’s a large drawback with the accounting group. I do know [Jamaica Observer] has been reporting on it. And I do know the ICAJ recognises it. There’s a problem [with getting auditors], and I believe the individuals who undergo are the smaller firms and the extra difficult firms,” Steven Whittingham, chairman of the JSE, chipped in.
“The smaller firms are those which are on the fringes which are impacted,” he added.
The information present Junior Market firms averaged 14.5-day delays in submitting required disclosures — greater than double the 6.2-day lag recorded by Primary Market counterparts. Practically half (43 per cent) grew to become repeat offenders inside a 12-month interval, in comparison with 17 per cent of bigger corporations. EduFocal Restricted, a Kingston-based schooling expertise supplier, exemplifies systemic challenges, having did not resolve annual report deficiencies since April 2024 regardless of a number of enforcement actions.
Tulloch, who was talking forward of the February 18 launch of the JSE’s Month-to-month Regulatory Report for November 2024, mentioned the alternate is “dedicated to partaking” offenders and has began analysis to find out among the causes of the compliance breaches, however added that preliminarily, it’s right down to numerous components.
“The mix of things consists of presumably [issues with] inside processes at listed firms, points by way of audit assets, points by way of the expansion of the accounting and auditing requirements,” Tulloch added.
4 Junior Market corporations endured suspensions final 12 months for breaches — double the Primary Market’s tally — whereas 73 per cent of November’s 26 regulatory breaches concerned smaller entities, in response to the JSE’s Month-to-month Regulatory Report for November 2024.
General, well timed submitting charges declined barely for unaudited stories happening from 95 per cent in 2023 to 87 per cent in 2024, whereas audited report compliance improved to 67 per cent from 40 per cent.
Tulloch mentioned the alternate is working “to alleviate this challenge” — referring to regulatory breaches — although he admits to being “a bit extra lenient” than regulators in different jurisdictions and outlined, “I’m undecided how rather more the inventory alternate can do.”
Nonetheless, he identified that because the RMOD was created as an impartial arm and “there was a big enhance within the compliance stage for listed firms and member sellers in respect to their filings.”
“So it’s for us to now proceed to safeguard that and work on bettering that state of affairs. We’re seeing, because the flip of COVID, that there was a deterioration. So it’s for us to analyze and have that type of dialogue with our stakeholders to see how can we arrest this.”
A potential motive for there being extra breaches on the Junior Market than Primary Market may additionally come right down to Junior Market firms dealing with no financial fines for breaches of JSE Junior Market guidelines.
Productive Enterprise Options Restricted (PBS), a listed firm topic to Primary Market guidelines, was fined $5,000 day by day its audited financials had been late throughout 2024. Based mostly on the report being 227 days late, PBS was topic to a high quality of $1.135 million. It additionally confronted a $5,000 a day high quality for day by day its annual report was late as nicely. PBS was suspended from buying and selling between July to November 2024 for its late audited financials.
In distinction, MFS Capital, Kintyre Holdings (Ja) (previously iCreate), and EduFocal Restricted, firms which were suspended and have submitted their audited numbers late during the last two years, haven’t paid a high quality for the late submission of their financials or another JSE rule breach. ISP Finance Companies Restricted, one other Junior Market-listed firm, confronted no financial high quality for submitting its 2022 annual report in January 2024 when it was due from April 2023.
The JSE’s Regulatory Report solely signifies the listed breaches for Junior Market Corporations, whereas Primary Market firms are written up and fined beneath the related JSE guidelines for his or her breaches. JSE Managing Director Marlene Road Forrest had instructed this publication in June 2022 that the JSE was contemplating the imposition of fines for Junior Market firms associated to any breach of the principles. The most recent publicly out there JSE Junior Market rule e book doesn’t stipulate any fines for firms listed on that market.
November 2024 enforcement information launched by the Jamaica Inventory Trade (JSE) final month expose stark disparities between the junior and principal markets, with smaller corporations accounting for three-quarters of delayed monetary filings regardless of constituting simply 38 per cent of listed entities.
