History of the Trinidad and Tobago Stock Exchange (TTSE)
The Securities Market which informally existed in Trinidad & Tobago for well over twenty years prior to the opening of the Trinidad & Tobago Stock Exchange really achieved significance in the early 1970’s when Government decided as a matter of policy to localise the foreign owned commercial banking and manufacturing sectors of the economy. The thrust of the policy was to get such companies to divest and sell a majority of their shares to nationals.
Two bodies chosen to effect this policy were the Capital Issues Committee which was set up by the Ministry of Finance in July 1970 to direct developments in the primary market and the Call Exchange (an association of share dealers) which was established under the umbrella of the Central Bank in August 1965 to monitor activities in the secondary market.
Parallel to this development in the public sector in the early 1970’s was the rapid establishment of private institutions such as trust companies and stock broking firms to satisfy the demands of investors in both the primary and secondary markets.
With such infrastructure in place and the concomitant increase in the securities business, the decision was taken to establish a securities market within a framework of established Rules and Regulations to facilitate the development of the domestic capital market.
The establishment of the Stock Exchange under the provisions of the Securities Industry Act 1981 was a natural extension of the policy to formalise the securities market in Trinidad and Tobago. This Act was proclaimed on the 23rd October, 1981 and the Stock Exchange was formally opened on the 26th October, 1981 under the auspices of the Ministry of Finance.
Over the years and leading up to the current time, there was no doubt that the original Securities Law, that is, The Securities Industry Act, 1981 became ineffective. In attempting to bring both Primary and Secondary market activity under one umbrella, the Act created confusion, and for the most part the provisions were unenforceable.
This was because the Exchange as a regulatory Organisation, had no discretion to reasonably moderate the strict and unreasonable application of the letter of the Act once a particular provision was not explicitly stated in the Act. The Ministry of Finance, in recognizing this problem, worked with the Exchange to introduce a more dynamic piece of legislation.
As a remedial measure, the Government, through the Ministry of Finance, passed legislation repealing the 1981 Act and replacing it with the Securities Industry Act of 1995 which brought into operation the establishment of a Securities and Exchange Commission.
The 1995 Act vests with the Commission, the authority to maintain surveillance over the securities market and ensure orderly, fair and equitable dealings in securities. Furthermore, all market actors, meaning issuers, underwriters, investment advisers, stockbrokers and dealers, etc. must register with the Commission, who will be responsible for controlling and supervising their activities. The Exchange on the other hand will regulate trading on the secondary market, as well as the activities of the Members of the Exchange, subject of course to the oversight by the Commission.
On December 31st, 2012 the Securities Industry Act of 1995 was repealed and replaced by the Securities Act, 2012.