Financial Requirements – Securities


The regulations provide a choice of two (2) methods for individuals to meet the financial requirements for Dealers and Investment Advisers’ Licences. They must either maintain a minimum net worth of $10M or acquire Indemnity Insurance for a minimum of $10M. If the individual chooses to maintain net worth of $10M, Audited Financial Statements establishing this must be submitted. Net Worth is defined as “…. the difference between his assets and his liabilities”.


In respect of companies applying for a Dealer’s Licence under Section 9(3)(a) of the Act, they are reminded that a fundamental requirement for licensing is that at least one of their Directors must first be the holder of a Dealer’s or Investment Adviser’s Licence. The Director must meet all the above-mentioned requirements for individuals, including the financial requirements. Another fundamental requirement for companies is the provision under Section 9(3)(a)(iii) of the Act, that they must satisfy “…such solvency and liquidity requirements as the Commission may specify…..” In this regard, the Commission took note of the Net Free Capital requirements to be met by Brokers dealing on the Stock Exchange.

The Commission has, therefore, stipulated, that a further requirement for licensing of Dealers under the Act is that companies must maintain minimum capital of $50M. On the other hand, companies applying for an Investment Adviser’s Licence are required to maintain minimum Free Assets of $1M. Free Assets are defined as “… the Company’s net asset worth held in the form of cash and readily convertible securities”.

Additional requirements to be met by companies seeking to be licensed are as follows: –
The Officers of the company must be fit and proper in that they should have had no convictions for offences involving dishonesty and are not undischarged bankrupts.
The company must be incorporated or registered in Jamaica and owned, controlled or supervised by Jamaican or CARICOM member country resident citizens.

Persons applying to be licensed as Dealers or Investment Advisers under a Partnership must conform with the requirements stipulated for individuals.

There are no financial requirements for representatives, so all that must be submitted by persons applying for registration of Representatives is certified copies of their passports, academic qualifications and marriage certificates. If the Representative does not have the specified academic qualifications, but meets the experience requirement, evidence of this should be furnished. The application form for representatives also requests the names of three (3) referees. The Commission is now requesting, pursuant to its authority under Section 9(2) of the Act, that written references be submitted by each named referee.

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