Stock Exchange signs MOU with CariCRIS, CFA Society

THE TT Stock Exchange has signed a memorandum of understanding (MOU) with regional credit rating agency CariCRIS and the CFA Society of TT to launch its Liquidity Index Project.

The initiative aims to enhance capital adequacy standards in local financial markets by offering institutional investors a new tool to manage risk effectively.

The MOU was signed at the TTSE’s annual Capital Market Conference at the Hyatt Regency Trinidad, Port of Spain on October 30.

The signatories included CariCRIS head of rating operations Kathryn Budhooram, CFA Society president Crystal Rodriguez Greaves and TTSE CEO Eva Mitchell.

The CFA Society of TT is the local chapter of the CFA Institute, an international association of finance and investment professionals.

Nicola Vickles, TTSE senior market operations officer, said the index will feature a tiered system that assesses risk relative to stock liquidity, lowering capital charges on high-liquidity stocks to reward quality holdings.

She said using TTSE market data, the index will help institutional investors make informed decisions while promoting a more competitive market environment.

Vickles referred to recent regulatory shifts resulting in increased capital charges for institutional investors, including a 20 per cent risk factor on quoted equities for insurance companies and a potential 16 per cent capital charge for broker-dealers on equities and collective investment schemes.

She said these requirements, part of new Insurance Capital Adequacy Regulations, have led institutional investors to reduce equity holdings, pushing down stock prices despite strong company fundamentals.

“International standards like the Basel Banking Requirements are best practices but don’t always fit our market,” Vickles said. “Our Liquidity Index reflects a tailored approach, encouraging listed companies to boost transparency and performance while fostering resilience in our unique market.”

TTSE said it is also in discussions with the TT Securities and Exchange Commission to ensure the project aligns with regulatory frameworks and supports all stakeholders.