20140311, senate debate - tuesday march 11, 2014 - 1:30 p.m. of absence tuesday, march 11, 2014...

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Leave of Absence Tuesday, March 11, 2014

SENATE

Tuesday, March 11, 2014

The Senate met at 1.30 p.m.

PRAYERS

[MR. PRESIDENT in the Chair]

LEAVE OF ABSENCE

Mr. President: Hon. Senators, I have granted leave of absence to Senators The

Hon. Ganga Singh and Gary Griffith, and Sen. James Lambert who are all out of the

country, and Sen. Camille Robinson-Regis who is ill.

SENATORS’ APPOINTMENT

Mr. President: Hon. Senators, I have received the following correspondence from

His Excellency the President, Anthony Thomas Aquinas Carmona SC, O.R.T.T.:

“THE CONSTITUTION OF THE REPUBLIC OF TRINIDAD AND TOBAGO

By His Excellency ANTHONY THOMAS AQUINAS

CARMONA, O.R.T.T., S.C., President and

Commander-in-Chief of the Armed Forces of

the Republic of Trinidad and Tobago.

/s/ Anthony Thomas Aquinas Carmona O.R.T.T. S.C.

President

TO: ARCHBISHOP BARBARA BURKE

WHEREAS Senator the Honourable Ganga Singh is incapable of

performing his duties as a Senator by reason of his absence from Trinidad and

Tobago:

NOW, THEREFORE, I, ANTHONY THOMAS AQUINAS CARMONA, President

as aforesaid, in exercise of the power vested in me by section 44(1)(a) and

section 44(4)(a) of the Constitution of the Republic of Trinidad and Tobago,

do hereby appoint you, BARBARA BURKE, to be temporarily a member of the

Senate, with effect from 11th March, 2014 and continuing during the absence

from Trinidad and Tobago of the said Senator the Honourable Ganga Singh.

Given under my Hand and the Seal of the

President of the Republic of Trinidad and

Tobago at the Office of the President, St.

Ann’s, this 11th day of March, 2014.”

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Senators’ Appointment Tuesday, March 11, 2014






/s/ Anthony Thomas Aquinas Carmona O.R.T.T. S.C.

President

TO: MR. NAZEEMOOL MOHAMMED

WHEREAS Senator the Honourable Gary Griffith is incapable of

performing his duties as a Senator by reason of his absence from Trinidad and

Tobago:

NOW, THEREFORE, I, ANTHONY THOMAS AQUINAS CARMONA, President

as aforesaid, in exercise of the power vested in me by section 44(1)(a) and

section 44(4)(a) of the Constitution of the Republic of Trinidad and Tobago,

do hereby appoint you, NAZEEMOOL MOHAMMED, to be temporarily a

member of the Senate, with effect from 11th March, 2014 and continuing

during the absence from Trinidad and Tobago of the said Senator the

Honourable Gary Griffith.










/s/ Anthony Thomas Aquinas Carmona O.R.T.T., S.C.

President

TO: WAYNE DANIEL STURGE

WHEREAS Senator the Honourable James Lambert, Vice-President of the

Senate, is incapable of performing his duties as a Senator by reason of his

absence from Trinidad and Tobago:

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Senators’ Appointment Tuesday, March 11, 2014

NOW, THEREFORE, I, ANTHONY THOMAS AQUINAS CARMONA, President as

aforesaid, in exercise of the power vested in me by section 44(1)(a) and section

44(4)(a) of the Constitution of the Republic of Trinidad and Tobago, do hereby

appoint you, WAYNE DANIEL STURGE, to be temporarily a member of the Senate,

with effect from 11th March, 2014 and continuing during the absence from

Trinidad and Tobago of the said Senator James Lambert.





OATH OF ALLEGIANCE

The following Senators took and subscribed the Oath of Allegiance as

required by law:

Abp. Barbara Burke, Nazeemool Mohammed and Wayne Daniel Sturge.

STANDING ORDERS INTERPRETATION

Mr. President: Hon. Senators, when we were last here, sitting on the last occasion,

a Standing Order question was raised. At that time, I maintained the position relative to

what we had done on previous occasions as to how the Standing Order should be

interpreted. I have since on further reflection, decided that the limits of that Standing

Order are somewhat more expansive than was first envisaged and as I have applied in

this Senate since this session began.

I, therefore, propose to circulate to Senators, a note relative to the Standing Orders

on those matters relating to the content and Standing Orders as they apply to Senators. I

hope, of course, that having reviewed those Standing Orders, we will conform to the

expectations of what the Senate will require of you in terms of adhering to the Standing

Orders.

I thank you.

ORAL ANSWERS TO QUESTIONS

The Minister of Justice (Sen. The Hon. Emmanuel George): Thank you very

much, Mr. President. The Government is prepared to answer questions Nos. 50, 51 and

56 on the Order Paper, and we are requesting the leave of this Senate to defer the other

questions on this Order Paper, which are quite numerous, for two weeks to enable the

Ministers to properly prepare their responses.

Thank you.

The following questions stood on the Order Paper:

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Oral Answers to Questions Tuesday, March 11, 2014

Road Improvement Fund

(Moneys Collected)

52. Could the hon. Minister of Works and Infrastructure inform this Senate on:

(i) the amount of moneys collected under the Road Improvement Fund for the

period July 2010 to present; and

(ii) the use that has been made by the Ministry of the said funds? [Sen. C.

Robinson-Regis]

Relocation of Government Offices

to the Borough of Chaguanas

57. A. Could the hon. Minister of Planning and Sustainable Development

indicate the study, the author and the date thereof, which underpins the

Government’s decision to remove three (3) Government Ministries and

other state institutions from the capital city to the Borough of Chaguanas?

B. What is the Government’s rationale for choosing Chaguanas for such

relocation?

C. Does the Government anticipate that any residents, businesses and

business persons in Port of Spain will be adversely affected by the

removal of these ministries and institutions out of their immediate

economic space, and if so what specific programme(s) will the

Government put in place to deal with such adverse effects? [Sen. C.

Robinson-Regis]

Production of Liquefied Natural Gas

(Details of)

58. A. Would the hon. Minister of Energy and Energy Affairs indicate what was this

country’s Liquefied Natural Gas (LNG) production for each of the years 2007 to

2013?

B. Is the Minister aware that the Central Bank reported a recent fall/drop by 16.5

per cent in such production? Does the Government accept this finding?

C. Would the Minister indicate what are the implications of this development on

the country’s prospects for economic growth in the current and next two fiscal

years?

D. What does the Government plan to do in response to this development?

[Sen. C. Robinson-Regis]

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T&TEC - Projects at Estate Trace

(Details of)

82. With regard to Estate Trace of the Cove compound, could the hon. Minister of

Public Utilities inform the Senate:

(i) whether T&TEC intends to adhere to Town and Country approval No.

T9K0165/2009 and remove the overhead infrastructure that was erected in the

tree buffer zone that is situated along the Trace;

(ii) if the answer to (i) is in the affirmative, when will this be done;

(iii) if the answer to (i) is in the negative, could the Minister please state the

reason(s) why not;

(iv) whether permission and approval was granted by the Town and Country

Planning Division to T&TEC for the erection of the light poles in the tree buffer

that is situated along the Trace; and

(iv) if the answer to (iv) is in the affirmative, what is the number of the Town and

Country approval document? [Sen. S. Cudjoe]

T&TEC – Processing Time

(Approval and Issuance of Generator Licenses)

83. A. Could the hon. Minister of Public Utilities inform the Senate what is the

stipulated processing time for the approval and issuance of generator licenses,

after applications have been made to T&TEC?

B. Could the Minister inform the Senate on the status of applications for generator

licenses made by EIDCOT on May 03, 2013 for three generators situated at the

Cove Eco Industrial Business Park in Tobago? [Sen. S. Cudjoe]

Trinidad and Tobago Electricity Company

(Resumption of Lease Arrangements)

84 Could the hon. Minister of Public Utilities inform this Senate when T&TEC intends

to resume negotiations on lease arrangements to formalize the Commission’s

residency at the Cove Eco Industries Business Park in Tobago? [Sen. S. Cudjoe]

Public Service

(Number of Contractors Employed)

85. Could the hon. Minister of Public Administration provide the Senate with the

total number of contract workers employed in the public service for the years

2010, 2011, 2012 and 2013? [Sen. Dr. L. Henry]

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Water and Sewerage Authority

(Number of Contract and Full-Time Employees)

86. Could the hon. Minister of the Environment and Water Resources say what is the

total number of contracts and full-time employees at the Water and Sewerage

Authority (WASA) for the years 2010, 2011, 2012 and 2013? [Sen. Dr. L. Henry]

Atrius

(Details of)

87. With regard to Atrius, could the hon. Minister of Finance and the Economy inform

the Senate:

(i) what is the status of Atrius;

(ii) what are the impediments to the transferring of the assets from CLICO to this

new entity; and

(iii) what activities has the Board of Directors of Atrius been engaged in and are

they being paid? [Sen. Dr. L. Henry]

Vehicle Management Corporation of Trinidad and Tobago

(Details of)

91. With respect to the Vehicle Management Corporation of Trinidad and Tobago,

could the hon. Minister of Transport please inform this Senate as to:

a) whether the CEO contract at VMCOTT was terminated by the new Chairman of

the Board;

b) if the answer to (a) is in the affirmative, on what basis was it done;

c) whether the Chief Operating Officer position at VMCOTT was an existing

position prior to 2010;

d) whether the Chairman of VMCOTT is an Executive Chairman; and

e) have the Managers at VMCOTT met the minimum qualifications for their

positions? [Sen. A. Singh]

Commercial Large Farms Programme

(Details of)

92. With respect to the Commercial Large Farms Programme (CLFP), could the hon.

Minister of Food Production kindly inform this Senate as to:

a) what is the status of each of the 12 commercial farms in Trinidad and Tobago;

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b) whether the CLFP is meeting its objectives within the supply side of the

Agricultural Sector and indicate with the relevant statistics; and

c) what commodities are being cultivated under this programme and where

are the goods being sold? [Sen. A. Singh]

National Agricultural Marketing and Development Corporation

(Details of)

93. With respect to the National Agricultural Marketing and Development

Corporation, would the hon. Minister of Food Production inform this Senate

as to:

a) what has been the total budgetary allocation to NAMDEVCO for the period

2010 to 2013;

b) what commodities and value added products are available from

NAMDEVCO and how many new export markets have been achieved for

the period 2010 to 2013;

c) whether NAMDEVCO prioritizes the marketing of local produce over

similar imported commodities; and

d) if the answer to (c) is yes, how is the prioritization done and what statistics

can be used for analysis? [Sen. A. Singh]

Colonial Life Insurance Company

(Current Status of the Sale Process)

94. Given the ruling by the Tribunal ordering the sale of CLICO’s 56.53 per cent

shareholding in Methanol Holdings Trinidad Limited (MHTL) to Consolidated

Energy (Trinidad and Tobago) Limited by January 31, 2014, could the hon.

Minister of Finance and the Economy inform this Senate of the current status

of the sale process? [Sen. D. Small]

Petrotrin Oil Spill

(Details of)

96. With respect to the oil spill incident in south-west Trinidad, could the hon.

Minister of Energy and Energy Affairs inform this Senate of any assessments

made by the Ministry of Energy and Energy Affairs and/or Petrotrin as it

relates to the following:

a) estimated volume of lost oil and/or oil products and the estimated amount

of such product(s) recovered to date;

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b) estimated costs of damage to Petrotrin’s oil field and related equipment to

date;

c) the total volume of COREXIT9500 and other dispersants used in the spill

control efforts to date;

d) estimated to date containment costs to stop or reduce further oil spillage

(e.g., efforts to cap wells, booms, dispersants, overtime, temporary

employment etc.);

e) economic damages, (total value and number of citizens), paid to affected

citizens to date;

f) fines imposed by regulatory agencies to date;

g) estimate of the scale of natural resource damage (beaches, mangroves etc.)

and the plans for remediation of the affected areas; and

h) estimate of natural resource remediation costs such that the affected areas

are returned to “pre-spill” condition? [Sen. D. Small]

Petrotrin Ultra-Low Sulphur Diesel Project

(Details of)

97. With respect to the Ultra-Low Sulphur Diesel project could the hon. Minister

of Energy and Energy Affairs inform this Senate as to:

a) what is the current completion status of the Petrotrin Ultra-Low Sulphur

Diesel Project;

b) what is the expected commissioning and start-up date;

c) what is the status of completion works by the EPC contractor;

d) what is the total expenditure on this project on a year by year basis from

2009 to present and the cumulative spend to date; and

e) what is the forecast expenditure to complete the plant and make it

operational? [Sen. D. Small]

Surveillance Bays

(Maintenance and Upkeep Contracts)

100. Could the hon. Minister of National Security inform this Senate on:

(a) the number of surveillance bays currently installed on the Solomon

Hochoy Highway and their exact locations;

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(b) whether a maintenance contract exists for routine upkeep and, if so, the

name of the contractor to whom such was awarded; and

(c) if the answer to (b) is in the affirmative the cost per month of the

contract? [Sen. D. Baldeo-Chadeesingh]

Speed Monitoring Devices

(Status of)

101. Could the hon. Minister of Transport inform the Senate of the status of the

introduction of speed monitoring devices, in particular radar speed guns, to

address the carnage on the nation’s roads? [Sen. D. Baldeo-Chadeesingh]

Questions, by leave, deferred.

Continued Medical Education

(Details of)

50. Sen. Dr. Victor Wheeler asked the hon. Minister of Health:

A. Could the Minister indicate whether it is the intention of the Council of the

Medical Board of Trinidad and Tobago to have continued medical

education become a requirement for the renewal of registration by doctors

in order to practice medicine?

B. If the answer to (A) is in the affirmative, could the Minister advise the

Senate when he expects this requirement to come into effect?

C. If the answer to (A) is in the affirmative, could the Minister indicate what

is the procedure required to institute such a requirement?

The Minister of Health (Hon. Dr. Fuad Khan): Mr. President, the answer to

question A is no. This is not a requirement under the Act as it is not tied to

registration. This provision is voluntary and not mandatory. To this end, section

20 of the Medical Board Act, Chap. 29:50 provides that one of the powers of the

council, the medical board, may make regulations or rules to establish:

“(j) …standards for continuous education and training of medical

practitioners;…”

Presently, the council is developing regulations for continued education of

medical practitioners. However, it must be reiterated that this is not a mandatory

requirement at this time.

Sen. Dr. Wheeler: Supplemental. But is it the intention for it to become

mandatory at some point in time in the future?

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Hon. Dr. F. Khan: At present, the regulations would be done by the Medical

Board of Trinidad and Tobago for registrations.

Sen. Dr. Wheeler: Sorry to persist, but further supplemental. In light of

developments in the health sector, do you think it should become mandatory that

continual medical education become a requirement for doctors to get continued

registration in Trinidad and Tobago?

Mr. President: Sorry, Senator. The Minister is free to answer the question if

he so wishes, but you are asking him for an opinion which the Standing Orders do

not permit.

Sen. Al-Rawi: Further supplemental. Thank you, hon. Minister. Hon.

Minister, would you be in a position to assist insofar as there may be a conflict

between the contracts by which doctors are employed with the regional health

authorities and the answer just given?

If I may explain just a bit. In the contracts that I have seen at the regional

health authorities, there is a requirement in there for some form of continued

education, is that contract born as a result of the Ministry’s direction, or it is born

as a result of the medical board’s direction?

Hon. Dr. F. Khan: Okay. The contracts at the regional health authority level,

those are contracts developed by the actual regional health authority and it is not

tied to registration. Registration is a different thing where one is allowed to

practice in the country of registration, and in the medical council that registration

is done in a specific manner as we speak. The continuing medical education is not

a requirement at this time, but it may be in the future.

Sen. Dr. Wheeler: Further supplemental. Minister, at present I am aware that

there is no council of the medical board, could you say when the new council will

be appointed and start functioning?

Hon. Dr. F. Khan: Cabinet has approved the council of the medical board

about a week ago. They should be getting their instruments this week.

1.45 p.m.

Scarborough General Hospital

(MRI and Cardiac Catheterization Laboratory)

51. Sen. Dr. Victor Wheeler asked the hon. Minister of Health:

With reference to the Scarborough General Hospital, Tobago, could the

Minister inform this Senate of:

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a) the status of the acquisition of a MRI to provide this service to Tobago residents;

b) the expected date of commissioning of the MRI Machine;

c) the status of the acquisition of a Cardiac Catheterization Laboratory and the

expected date of the commissioning of the Cardiac Catheterization Laboratory;

and

d) whether the Government has considered the Report of the Joint Select

Committee (Group 2) dated October 04, 2013 on the Commissioning Process

for the Hospital, and if so, to what extent have the findings and

recommendations been addressed?

The Minister of Health (Hon. Dr. Fuad Khan): Thank you. Question 51 asked

about the MRI acquisition in the Tobago residence. Mr. President, the tender and

evaluation for the design, supply and installation and commissioning of the MRI with

furniture, fittings and equipment is fully completed. Cabinet has also approved the

revised project budget.

The expected date of commissioning of the MRI machine: Mr. President, this

project involves the total design, supply, installation and commissioning of the MRI

imaging with furniture, fittings and equipment. The project construction is expected to

start in April 2014 with a planned six-month project duration. Expected date for

commissioning of the MRI hopefully is September 2014.

The status of the cardiac catheterization lab and the expected date of

commissioning, this tender and evaluation for the design, supply, installation and

commissioning of the cardiac catheterization lab with the furniture, fittings and

equipment is fully completed. The project construction is expected to start hopefully in

April 2014 with a planned six-month project duration. The expected date for

commissioning of the cardiac catheterization lab is also September 2014. Cabinet has

approved the revised project budget.

On part (d), while the Ministry of Health was not part of the discussions with the

Joint Select Committee, the Ministry has noted the findings and recommendations in

the report of the Joint Select Committee (Group 2) dated October 04, 2013. In that

connection, the Ministry provided significant support to the Tobago House of

Assembly and the Tobago Regional Health Authority in the commissioning process for

the new hospital. The Ministry’s representatives were members of the Policy Oversight

Committee for the new Scarborough hospital chaired by the Secretary of Health and

the Social Services Division, Tobago House Assembly. Additionally, the Ministry

assigned a team from its change management and health sector human resources units

to provide orientation, training and support during the commissioning process of the

hospital.

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Oral Answers to Questions Tuesday, March 11, 2014 [HON. DR. F. KHAN]

With regard to the recommendations relevant to the Ministry of Health,

namely the issue of one: the general shortages of pathologists and lab personnel in

Trinidad and Tobago, the Ministry of Health has established a human resources

committee for lab services which is currently reviewing and updating the

organizational structure of laboratories, and that of the job descriptions of the lab

staff, including the pathologists since pathology has been identified as a priority

area. There is also collaboration between the Ministry of Health and the Ministry

of Public Administration, the Scholarship and Training Division, towards the

awards of scholarships in pathology as a specialty area, and for interested persons

at the University of the West Indies, Mona Campus, and other external training

agencies. Thank you, Mr. President.

Sen. Dr. Wheeler: Thank you, Minister of Health. With respect to the MRI

machine, as your Ministry did provide some assistance to the RHA in terms of

staffing in the operation of the CT scan when it was acquired, is it the intention of

the Ministry to also provide support to the TRHA with respect to the operation of

the MRI machine, staffing and that sort of thing?

Hon. Dr. F. Khan: Thank you, Mr. President. The Ministry of Health is

always ready and willing and able to support the people of Tobago in their desire

for proper health care which they have not had for a while. Since coming into

office in the last three years, we were able to commission the Scarborough

hospital, and the deficiency in the design was that of an MRI machine and cath lab.

We will be willing, ready and able to assist the development of the MRI machine,

cath lab and other specialists that are desired and necessary for the fully

functioning of that.

Sen. Dr. Wheeler: Further supplemental. With respect to part (d) and the

recommendations from the Joint Select Committee, one of the recommendations

was to ensure that there is a medical director on the board of directors of the

TRHA. At present, there is no functioning board of directors. Are you in a position

to say when it is likely that the TRHA will have a functioning board?

Hon. Dr. F. Khan: It is unfortunate that the TRHA board is—as I said, the

names are supplied by the Tobago House of Assembly, and in doing so, it was a

bit tardy on their part. However, Cabinet has, with the assistance of the Minister

of Tobago Development, brought that forward, and we have passed the board—

the TRHA board. It has been passed in Cabinet approximately about four or five

weeks now, so the Tobago House of Assembly should be putting the board

together very soon, hopefully.

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Sen. Dr. Wheeler: Further supplemental. Would you be in a position to give a

date for that?

Hon. Dr. F. Khan: The Senator will understand that I try not to interfere in

Tobago affairs where that is concerned. That is the THA.

Sen. Al-Rawi: Further supplemental, Mr. President. Hon. Minister, are you in a

position to tell us what type of MRI machine has been approved for purchase in the

tender?

Hon. Dr. F. Khan: I think it is one of a nature that is of an internationally accepted

standard.

Sen. Al-Rawi: Thank you, hon. Minister, seeing that all machines are made

internationally anyway, I was wondering whether you were in a position to inform us

as to the type of suppliers. Is it Siemens, et cetera? Out of general interest.

Hon. Dr. F. Khan: The Minister of Health just assigns that responsibility to

NIPDEC as one of the special purpose companies, and hopes that they do their best to

provide a machine that is within, as they say, international best standards and one of the

top machines that is worldwide.

Sen. Al-Rawi: Further supplemental. Is that the same position with respect to the

cath lab?

Hon. Dr. F. Khan: That is also the same position with respect to the cath lab and

all other equipment that is being done under this Ministry of Health.

Sen. Al-Rawi: So it is proper to say then that NIPDEC is the procuring agency for

these particular items?

Hon. Dr. F. Khan: We found that NIPDEC has done a fantastic job in that manner,

and I must say yes, they are the procuring agency.

Sen. Al-Rawi: With respect to the issue of the coordination in answer to part (d),

the report coming out of the Joint Select Committee, there is a significant backlog in

terms of reports, is the hon. Minister in a position to describe what solutions coming out

of this recommendation have been put into effect? What mechanisms to provide

solutions have been put into effect?

Hon. Dr. F. Khan: When the Senator said backlog, there are backlogs in all

different departments. Was he referring to anything specific?

Sen. Al-Rawi: The radiology and other aspect reports and the specialist reports that

come out by way of referrals, they were to the backlog extent of somewhere close

to 10,000 at one point in the Group 2 investigations. Is the hon. Minister aware

within the parameters of part (d), of course, or is the hon. Minister in a position to

inform us as to what solutions have been put into effect with that?

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Hon. Dr. F. Khan: Sure. Unfortunately, that 10,000 backlog came about, I think,

between the years 2002 and 2010. So, however, the hon. Minister has put things into

place. What we are looking at is a sort of a telemedicine type programme with the PACS

system where we can now develop a programme where the images will be sent either

abroad or to different specialists or radiologists so they will read it as far as their

iPhone, or wherever it may be, rather than actually going to the actual place of interest,

so it will decrease that backlog. That is being put in place as we speak right now—the

PACS system.

Sen. Al-Rawi: Thank you, hon. Minister and that refers specifically to the 10,000

in the year 2012 and 2013. Right?

Hon. Dr. F. Khan: That refers to the backlog that was being done between years

2002—2010. What has happened between 2010—2013, we have taken care of that

load, in fact, by being proactive moving forward.

Sen. Al-Rawi: Hon. Minister, with respect to the appointment of the TRHA medical

board referred to in your answer a short while ago, is the hon. Minister in a position to

tell us whether that was as a result of the discussions passing between the THA and the

Prime Minister, as has been called upon on several occasions and has not happened?

Hon. Dr. F. Khan: It is another question, but the THA normally is the one who

supplies the names to the Prime Minister. If they do not supply the names, the board

cannot be designed. So, we are hoping that the next time the board has to be done, the

THA will send the names a little earlier so we could develop the process. [Desk

thumping]

Sen. Al-Rawi: Hon. Minister, the answer given a short while ago from which my

question now arises was that the Ministry of Tobago Development assisted and, as a

result, Cabinet has approved something. Is the hon. Minister saying that those names

were recommended by the Ministry of Tobago Development and not the THA?

Hon. Dr. F. Khan: What I said was that the Tobago House of Assembly sent the

names forward. However, it was a good thing that the Minister of Tobago

Development was around, he was able to expedite the process and, as a result of that,

we were able to get the board moving faster.

Sen. Al-Rawi: So the hon. Minister is saying that the THA did supply the names,

which is in contradiction to what you said earlier.

Hon. Dr. F. Khan: It is not contradiction. I never said that the Tobago

Development Minister supplied the names; I said he expedited the process of the names

sent by the Tobago House of Assembly. Thank God for him. [Desk thumping]

541


Sen. Cudjoe: Further supplemental. Minister, based on what has happened

and the problem of the Tobago House—[Interruption]

Mr. President: Senator, you cannot give a preamble to the question, you need

to present the question.

Sen. Cudjoe: Yes. Based on your previous answer, hon. Minister, who really

has authority over the Tobago Regional Health Authority, because this is under

the Minister of Tobago Development and the Tobago House of Assembly right

now? So, who really has authority for the Tobago Regional Health Authority?

Hon. Dr. F. Khan: A question that should be answered and put on the record.

It would be wise for the people of Tobago that the Tobago House of Assembly

and the Tobago Development Minister work in tandem for the health care of

Tobago. So to say who has the authority, that is a turf war. What I am trying to do

in Tobago is to allow the people of Tobago to get proper health care, and in doing

so, the Tobago House of Assembly and the Tobago Development Ministry must

work together to provide that.

Sen. Cudjoe: Okay. Based on the practice over the past 20 years of the THA

communicating directly with the Ministry of Health, how does this new

responsibility placed under the Minister of Tobago Development by this new

administration, how does that work?

Hon. Dr. F. Khan: No, we have not placed anything under the Tobago

Development Ministry; no, we have not. The names come directly from the Tobago

House of Assembly directly to the Cabinet, not to the Ministry of Health.

Sen. Cudjoe: So how did the—may I? Why is it necessary then for the Minister or

the Ministry of Tobago Development to get involved if this has been the practice? You

are contradicting yourself.

Hon. Dr. F. Khan: Yeah, because what was happening was that the names were

not coming forward, and the Minister of Tobago Development had to go and make sure

and shake the Tobago House of Assembly that you need to come forward. [Desk

thumping]

Sen. Cudjoe: Further supplemental. Minister, are you aware that since November

of last year, these names have been submitted, we are in March of this year?

Hon. Dr. F. Khan: It may have been formulated but not submitted.

Sen. Cudjoe: It was submitted, recheck your record. It was submitted in

November of last year.

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Hon. Dr. F. Khan: Unfortunately, it was submitted to the Ministry of Health.

Sen. Cudjoe: That had been the practice for the last 20 years.

Hon. Dr. F. Khan: No, that has never been the practice. So I had to indicate

that the Ministry of Health does not interfere in Tobago affairs, so they have to go

back to the Tobago House of Assembly which then took a very long time to send

it to the Cabinet. Thank God for the Tobago Development Minister, he was able

to expedite that process. [Desk thumping]

Mr. President: Sen. Al-Rawi, there is another question in the name of Sen.

Camille Robinson-Regis, I am not sure if you are going to take conduct of that

question.

Sen. Al-Rawi: Thank you, Mr. President. I did not realize that we were

moving on to that question. Hon. Minister, insofar as my colleague, Sen. Camille

Robinson-Regis, is not well today and not here, and this is a specific question in

her name, may I ask that it be deferred for one week if that is convenient? And

may I also, whilst I am on my legs, ask what the response time for the other

questions posed by the Opposition would be, including those that have been

deferred on successive occasions?

Sen. George: I did, when I spoke earlier, seek the leave of this Senate, Mr.

President, to defer the other questions in today’s Order Paper for two weeks to

allow for proper preparation of the responses.

2.00 p.m.

Sen. Al-Rawi: Mr. President, is the hon. Leader of Government Business—I

know he is acting in the Chair today, as I am equally—is he in a position to

indicate whether this question can be answered next week?

Mr. President: I think he has asked for two weeks deferral. I think we will

have to—I am sure that is a matter dealt with, with the substantive Leader of

Government Business when he made that application the last time. If, of course,

the Leader of Government Business has the answer, he may choose to answer but

I—[Interruption]

Sen. Al-Rawi: Mr. President, I am speaking about Question 56, not any other

question.

Mr. President: Oh, I see.

Sen. Al-Rawi: Yeah.

543


Sen. George: We are ready to answer that question today, Mr. President, but

if—[Interruption]

Sen. Ramlogan SC: No, no, no, man, “leh we” answer it and get it on. It is a

short answer, man.

Sen. George:—my colleague wants a delay of one week, a deferral of one

week—[Interruption]

Sen. Maharaj: “We ready, man.”

Sen. Ramlogan SC: “We like Bunji, you know, we ready.”

Sen. George: The Minister of Finance and the Economy is ready to answer.

Let us answer it. We want to answer it. [Desk thumping] “We ready” to answer

the question.

Sen. Al-Rawi: If the Government is ready to persist, I can assist them that

way, but I would have preferred for Mrs. Robinson-Regis to prosecute it but if we

wish to deal with it, Mr. President, I have no objection to that.

The Minister of Finance and the Economy (Sen. The Hon. Larry Howai):

Okay. Yeah.

Mr. President: Well, I will allow Sen. Al-Rawi to ask the question so that we

could do it formally.

Sen. Al-Rawi: Now that the wicked has been prepared, if I could run up to it

and pose Question No. 56 standing in the name of Camille Robinson-Regis—Sen.

Robinson-Regis to the hon. Minister of Finance and the Economy. [Desk

thumping]

Financial Intelligence Unit

(Detection of Money Laundering)

56. Sen. Faris Al-Rawi on behalf of Sen. Camille Robinson-Regis asked the hon.

Minister of Finance and the Economy:

A. Is the Minister aware that in the ongoing court matter in South Florida,

USA in the case of USA vs Oscar Sanchez, a local bank has been named by

the US prosecutor, as being implicated in a money-laundering transaction,

involving sums of US$375m; US$63m and US$31m?

B. Could the Minister indicate whether the Financial Intelligence Unit (FIU)

was in any way involved in the detection of this activity and the detection

of the offences in this matter?

544


C. Could the Minister further indicate whether a “suspicious transaction” was

reported to the FIU, with respect to this matter or any related matters?

D. If the answer to (b) and (c) are negative, would the Honourable Minister

say why not; and what action has been or is being taken by the FIU, to

correct the possible inefficiencies that led to its inability to detect and

monitor this particular activity?


Mr. President, the answer is relatively short, which is why we thought perhaps we

should answer it now.

It comes from the question itself. The matter is before the court and therefore

is sub judice and therefore it would be inappropriate for us to answer the question

at this time. In addition, Mr. President, section 22A of the FIU Act specifically

provides that the FIU cannot disclose to the Minister details of “a suspicious

transaction or…activity report…” [Desk thumping]

Sen. Al-Rawi: Mr. President, perhaps before I put my supplemental

questions, through you of course, could you provide some guidance as to whether

this sub judice affects the jurisdictional conflict between the United States and

Trinidad? Because this is a question posed as opposed—it is posed in relation to a

matter that is ongoing in the United States of America, not Trinidad and Tobago,

which I believe our Standing Orders refer to.

Mr. President: I heard the Minister to say something more than merely the

question of sub judice. He was saying that the matter was not appropriate for

disclosure to this House, if I may paraphrase what he said. And if that is the case,

then we have to accept the answer the Minister has given—sub judice or not sub

judice. He indicated that it is a matter that requires confidentiality, as it were, and

should not be disclosed at this House. I therefore fear perhaps that any

supplemental question might transgress that statement by the Minister, but of

course I do not know what question you are going to ask.

Sen. Al-Rawi: Thank you, Mr. President. I did not quite understand the hon.

Minister to say that there was an issue of confidence. What I did understand the

hon. Minister to say is that section 22A of the FIU Act prohibits the FIU informing

the Minister of that activity. But I did not hear from the Minister’s own lips an

issue other than sub judice, which I asked for clarification in respect of

jurisdictional conflicts between the United States and Trinidad. So perhaps the

hon. Minister could elucidate his point so that we may take it.

545


Mr. President: I will allow the Minister to do so, but that certainly is my

understanding of what he said.

Sen. The Hon. L. Howai: Certainly, Mr. President. I mean, this is a matter on

which we have received legal advice. I mean, I would defer to the Attorney

General for a further amplification on that matter but we have been advised that

the matter is before the court and therefore is sub judice. In any event, as I was

saying, in addition, the fact is that under section 22A specifically, the FIU cannot

disclose details of matters that are part of “a suspicious transaction or…activity

report…” to the Minister.

Sen. Al-Rawi: Supplemental, Mr. President. In the parameters of part A of the

question—whether the Minister is aware of an ongoing matter in the case of USA v

Oscar Sanchez, whether the Minister is aware of prosecution in a money-

laundering transaction. Is the Minister able to answer that? That does not depend

upon information coming from the FIU, as the Minister may be aware of it

otherwise.

Mr. President: Of course, I might point out to you the question of court

matters in the United States, I suspect, do not fall under the portfolio of the

Minister, and therefore by reason of that, this question cannot be put to him.

Sen. Al-Rawi: Mr. President, again, I have not heard the Minister say that.

What he has said is that he has received—[Interruption]

Mr. President: Sen. Al-Rawi, I am ruling. As the Presiding Officer, I am

ruling that matters—you can only ask questions to Ministers relative to matters

that fall within their portfolio. I am suggesting to you that proceedings in the

United States, I suspect, do not fall within the portfolio of the Minister for him to

answer that question. But my suspicions are that they would not fall within the

portfolio and therefore not the subject, the proper subject of a question.

Sen. Al-Rawi: Mr. President, I will always be guided by your ruling but you

have just said that you suspect that the Minister may be relying on that. Is it the

ruling that the question cannot be answered? Or is it the suspicion that the

Minister will say something else?

Mr. President: I will allow the Minister to answer for himself but, as

Presiding Officer, I take cognizance of the fact that I would be very surprised to

understand that matters that occur in the courts of the United States fall within the

parameters of the Minister’s portfolio. But I will let him answer for himself.

546


Sen. The Hon. L. Howai: Mr. President, you are quite right. This is a matter

which perhaps another Ministry might be in a better position to answer.

Sen. Al-Rawi: Thank you, Mr. President. I will be guided by that. And I

thank the hon. Minister for coming up with that well-prepared response. Thank

you.

SECURITIES (AMDT.) BILL, 2013

Order for second reading read.


Thank you, Mr. President. Mr. President, I beg to move:

“That a Bill to amend the Securities Act, 2012, be now read a second time.

Mr. President, the financial services sector is a major contributor to our economy.

Today the financial services sector contributes about 14 per cent of total GDP and the

consolidated assets of the sector, inclusive of the insurance companies—and I say this

in the broadest sense—are actually larger than the GDP of the country. It is therefore a

sector that needs to be properly regulated and which needs appropriate legislation and

appropriate enforcement capability and as a result we have quite a number of Acts that

govern the affairs of the sector including the Act which we are now taking through

Joint Select Committee, the Insurance Act, the Central Bank Act, the FIU Act, the FIA,

this Securities Act, there is a new credit union Bill which we are currently working on.

And there are a number of regulators in the industry that pay attention to the affairs of

the industry and how it is actually conducted.

Our vision for the sector is to see the sector continue to grow and to make an

even larger contribution to the economy. We also look for this sector to become

more well balanced than it is today, with better forward and backward linkages

within the sector. So, for example, we are looking at the possibility of further

developing our capital markets, as well as our money markets and the

introduction of new products and services particularly as it relates to things such

as derivative securities.

We are also looking at backward linkages within the industry, which would

include, like for example, our back office processing capability which is really a

nascent activity for the sector but which started over the past year and which, today,

contributes over 1,000 jobs to the economy. So we are looking for the continuing

development of the sector and it is therefore important that the legislative capability that

we have and the regulatory authorities are able to manage, not only the sectors that

exist today but the sector continue to evolve as we see the sector evolving.

547

Securities (Amdt.) Bill, 2013 Tuesday, March 11, 2014

We also see, in our vision for this sector, a larger role for the TTIFC, the

Trinidad and Tobago International Financial Centre, as it continues to roll out and

enlarge its capacity and to bring new investors into Trinidad and Tobago. At the

present time, we are working on a new Green Paper for the capital markets and

we have established four planning teams, made up of local industry experts, to

plan the next stage of development of this capital markets industry.

Simultaneously, we are looking at the entire regulatory capability of the sector

and, in particular, we have recently started some work on looking at the options as

it relates to whether we should have a single regulator here in Trinidad and

Tobago and we have found that in many jurisdictions, particularly where they

relate to small economies, that a single regulator does have some advantages. It is

a matter that we are still considering. We have not yet made any decision but we

have started the process of fully examining the possibility of maybe introducing a

new regulatory framework into Trinidad and Tobago.

Of course, with that, Mr. President, we also need to ensure that there are

stronger enforcement mechanisms throughout the industry. So, we see the

industry continuing to grow. We see the industry expanding. We see the industry

becoming more diversified and we see our regulatory capability and infrastructure

continuing to evolve as the industry continues to grow.

The amendments which we are bringing forward today, Mr. President, arose

out of a commitment which we made sometime ago in this honourable Senate and

in fact imposed, we think, an obligation on us by our fellow parliamentarians, to

undertake a further review of the SIA, 2012. And this was a commitment which

we made in December, 2012 when the legislation was passed. And we did give, at

that time, a commitment that we would bring the revisions to the legislation to

this honourable Senate within six months.

We, in fact, gave two updates to this Senate. One on March 26, which was

provided by the hon. Sen. Ganga Singh, which provided an update on the progress

being made. And there was a further update which I, myself, gave on June 25, of

the progress which was being made in honouring this commitment which we had

made to the Senate. By the time the draft had been prepared, of course the House

was ready to go on the long break over the July and August period. And in light of

the fact that immediately thereafter we were going into the budget and into the

subsequent debate, we decided to leave some additional time for the market actors

to make further comments on the legislation, as it had been developed.

548

Securities (Amdt.) Bill, 2013 Tuesday, March 11, 2014 [SEN. THE HON. L. HOWAI]

And therefore, I would like to thank the market participants, who even up to

yesterday, in fact, were providing us with further suggestions for amendments to

the legislation. And this is such a complicated piece of legislation, Mr. President,

that, you know, as you look at it, every time you look at it, there are things that

you think perhaps you could fine-tune a little more to make it much more relevant

and much more insightful in terms of how it expresses the challenges that we face

and the initiatives that we will take to manage these challenges in the industry as a

whole.

So, we have in fact received comments from a number of stakeholders and I

would like to thank the Trinidad and Tobago Stock Exchange, the Home

Mortgage Bank, The American Chamber of Commerce, a number of listed

companies, as well as the Independent Senators themselves because I believe, Mr.

President, that you, yourself would have reminded Members of the Senate to

submit their comments for consideration, which in fact we did receive.

So, I would like to thank everyone for the contributions which they have made

to the many amendments which we are putting forward today. In fact, Mr.

President, there is something like about 68 amendments here and I am sure by the

time my colleague is completed, on the other side, it would probably be 100

amendments that we will have to consider. But, the thing is that, again as I say, it

is a very complex piece of legislation and it requires very insightful evaluation on

an ongoing basis as we go along.

2.15 p.m.

The time over the past year was used to study the effectiveness and

shortcomings of what we have, and I think that what we are proposing today will

result in a much more robust piece of legislation than existed previously.

It is not my intention to go through the Bill clause by clause, Mr. President,

but basically to express the general intent and to highlight a few of the major

amendments which we are proposing. We know that this legislation is crucial to

bringing sound and effective regulation to the industry but, very importantly, what

it does is it increases the confidence which market actors have in the industry as a

whole.

For those of us who are familiar with the industry and with the sector, we will

recognize that in the financial services industry, the only asset you have is really

confidence. If you do not have confidence, every other asset almost dissipates

almost immediately. So it is actutely important that there is confidence in the

sector, and also a confidence that is not just an amorphous sense of confidence,

549


but a confidence that there is integrity in the processes that take place within the

sector; that there is the confidence that there will continue to be growth and

continue to be development of the sector and, therefore, that the sector will

continue to be relevant to the economic needs of our society.

So these amendments which we are proposing, Mr. President, will further

strengthen the Securities Act; will provide clarity; will streamline processes and

procedures; will make it more user-friendly; and it will simultaneously tighten

certain lacunas or loopholes that we had within the existing legislation. We have

also used the opportunity, Mr. President, to lay the by-laws which are an integral

part of this piece of legislation.

Mr. President, as the Senate would be aware, this legislation was passed with

the three-fifths support of both Houses, and we look again this time for continued

support of the other Benches for these amendments as we move forward. It was

proclaimed on December 28, 2012, and it was instrumental in ensuring that

Trinidad and Tobago became a full signatory to the International Organization of

Securities Commission—IOSCO Multilateral Memorandum of Understanding

(MMOU) in June of 2013.

Being on the A list of IOSCO, as we are now, signals that the country is

committed to ensuring sound securities regulations. It also signals that we are

capable, able and willing to share information with foreign regulators as it deals

with the issue of ensuring compliance with rules and regulations on a global basis.

It enhances the international reputation and credibility of Trinidad and Tobago

and our market and it increases investor confidence in the market for our

securities.

The Trinidad and Tobago Securities and Exchange Commission is now a

member of IOSCO’s Growth and Emerging Markets Committee, and the

commission also sits on the steering committee of the Growth and Emerging

Markets Committee of IOSCO, a very prestigious position and one that recognizes

Trinidad and Tobago’s critical position in the English-speaking Caribbean as a

financial centre and as an economic powerhouse.

We are one of five commissions in the Caribbean—if you include El Salvador—

which would be Bahamas, Bermuda, the Cayman Islands and ourselves as well as El

Salvador. Now, as a result of the legislation that we have in place, we are in a position

to compete effectively for new business from investors because we have shown and

demonstrated quite comprehensively that we are in a position to provide the kind of

regulatory control and regulatory environment that international investors seek.

550


As I said, Mr. President, the core of the Act is a promotion of regulatory

cooperation, and apart from being able to cooperate with regulators in other

jurisdictions, the Securities and Exchange Commission has moved to tighten the

loop internally here in Trinidad and Tobago with the recent signing of an MOU

between the Central Bank and the SEC in January of this year, and another MOU

which will be signed shortly with the FIU. So this will enhance the disclosure

obligations and strengthen the regulatory framework, foster transparency and

facilitate an increase in the SEC’s enforcement powers.

This Act also places great emphasis on prosecuting market misconduct and

manipulation, which is absolutely important for ensuring that there is confidence

in the market. And as I am dealing with the issue of, perhaps, potential market

misconduct and manipulation, I would say that while the Ministry of Finance and

the Economy has no say in what the SEC does, I am aware that the SEC is paying

attention to the recent First Citizens IPO. So that where the SEC has the power to

bring criminal charges, and where it has much broader enforcement power, it will

certainly seek to bring that to bear in dealing with this particular matter.

As I say, Mr. President, the SEC acts entirely independently—entirely

independently of the Ministry of Finance and the Economy—but it is about doing

its works to ensure that there is no market misconduct or market manipulation. In

that regard, Mr. President, I should also indicate that I had requested an audit by

PricewaterhouseCoopers on this matter, and I expect that that report should be

available shortly within the next couple of weeks.

Mr. President, this legislation is part of a wide-ranging and comprehensive

framework of measures which the Government has taken to reform, upgrade and

modernize the regulatory rules and practices of this ever evolving securities

industry, especially, Mr. President, as it is important as we develop our own

capital markets, as I have said and, eventually, move to developing a derivatives

market, it is important in avoiding financial shocks and financial crises.

Trinidad and Tobago is no stranger to financial crises of different types. In the

early 1980s, Senators of this honourable Senate would probably recall the

challenges we faced with the non-bank financial institutions which collapsed—

Summit, SWAIT, a number of non-bank financial institutions which collapsed in

the 1980s and then in the early ’80s—and then we had also the failure of the

indigenous banks starting with the Cooperative Bank around the middle of the

1980s, followed by the Workers Bank in 1989 and then the need to pull all of the

indigenous banks together in 1993. So we have had to deal with the issue of

failure.

551


BCCI itself, which was part of a global network, failed somewhere around the

late 1980s early 1990s, and we did have one of their branches here in Trinidad

and Tobago. We, of course, had the Clico and HCU matter, and we have had a

number of other challenges which we have had to deal with as an economy and as

a society. I think, by and large, as a nation, we have been able so far to manage

these crises reasonably well. But as they say, prevention is always better than

cure, Mr. President, and, therefore, the ideal situation is that we did not have these

types of challenges to start with, but having had them, that we have managed

them as well as we have.

What we have experienced here in Trinidad and Tobago with the financial

services sector, Mr. President, is no different to what has happened in other parts

of the world. Senators would recall the Latin American debt crisis in the early

1980s; the savings and loan debacle in the United States where practically all the

savings and loans fell apart in the late 1980s early 1990s; the Asian debt crisis

where practically all of the countries in South-East Asia experienced significant

difficulties; the Mexican and Argentinian debt crisis where Argentina defaulted

on its debt.

I always remember the case of myself trying to sell paper when I was in another

place in the international markets, going into a meeting to invite investors to purchase

paper issued by the bank, and going in just as the Argentinians were coming out and

explaining to the investors why they could not be repaid on the paper that they had

invested in Argentina. The thing about it is that, of course, all these European investors

think Trinidad and Tobago is just part of Latin America until you explain it to them. So

it was a little challenge, and this tends to be a global phenomenon. It is something that

affects once you have had a bad experience in one place you tend to extend it wider

than the specific jurisdiction where you have had difficulties. And, of course, Mr.

President, you will be aware of the global financial crisis of 2008, which resulted in

almost a meltdown of the entire global economy.

And, of course, there have been challenges by various market actors, for example,

Stanford, Madoff—here in Trinidad and Tobago we have had a few similar types of

incidents over the years, and we have been able, as I said, to manage them well and,

presumably, over time we will be able to strengthen our legislative capability to ensure

that not only do we have to manage, but we will be able to prevent. I should say that we

are currently in the process of developing a more robust financial sector management

programme with several of the various actors, which will ensure that we are able to

very early identify potential problems and take appropriate remedial action much

earlier.

552


So, Mr. President, I think as the financial sector stands now—“knock

wood”—we are in a reasonably good place and we are moving quite rapidly to

bring the various pieces of legislation that are so important to ensuring that we

continue to have a position of envy among all of the economies in the Caribbean.

Mr. President, over the past few years—and, perhaps, this goes back to the

late 1990s—our financial sectors continue to grow and to expand and,

particularly, the last five years its growth has really accelerated. We are one of six

countries within the Caribbean with developed stock markets and publicly listed

companies. The others are Barbados, Bahamas, Bermuda, Cayman Islands and

Jamaica, but the Trinidad and Tobago market is by far the largest and most active

in a number of trades when compared with markets in the English-speaking

Caribbean.

And while we have shown growth in our market consistently and, particularly,

over the last two years, both Jamaica and Barbados have declined and, therefore,

there remains opportunities for us to consider how we may wish to grow our own

stock market by way of perhaps encouraging cross listings or doing other things

that would allow us, perhaps, to have a more Caribbean stock market; one that

perhaps would have lower overheads and a greater degree of efficiency.

2.30 p.m.

If I were to look at one segment of the market for example, the debt securities

market, Mr. President, has grown from $4.9 billion to $15.6 billion in the last five

years; a growth rate of over 300 per cent. The market cap of the stock exchange

has grown from $71 billion in 2009 to $110 billion as at September last year. The

market for securitized instruments has also grown from $2 billion to $3 billion

over the same period. The number of registrants now stands at 328. If we use the

baseline year of 1997, the size of the regulated capital market stood at $23 billion

at that time, this represented 65 per cent of GDP. As at July last year, the value of

the regulated market was $281 billion, representing 169 per cent of nominal GDP.

In 1997, funds under management, mainly mutual funds, which were the

largest component at that time, amounted to $3.3 billion. By June of last year this

figure had grown to $43 billion, an increase of over 1,000 per cent. Moreover,

there were only three mutual funds registered with the commission in 1997. This

figure stood at 64 as at June last year. On establishment of the commission in

1997, which is what I am using as the baseline, the establishment of the

commission, the stock market composite was 213.3. At August 31 last year it was

1,123, or a growth of 400 per cent.

553


Market capitalization of the stock exchange stood at $19 billion in 1997, and

today it is $110 billion, as I said earlier. The level of activity in terms of trades in

the secondary market for Government bonds has also picked up markedly with

183 trades during this year, last fiscal year, at a value of $2.2 billion versus a total

of 84 trades with a value of $1 billion the year before. So what these numbers

show, Mr. President, is that there has been a huge growth, an explosive growth, an

exponential growth in the capital market activity, in the financial sector activity.

I did not go into details of the banking sector, but the banking sector has

reflected the same kind of growth over the period. So in fact we have a very

significant, a very large, a very dynamic, a very sophisticated market, and

therefore one which requires appropriate control, appropriate regulation, which

will ensure that it encourages growth, encourages diversification, encourages

greater sophistication of the market, but at the same time facilitates and

strengthens regulatory control so that there is no malfeasance, no manipulation

and no misconduct within the market.

Mr. President, this piece of legislation, as I looked at it, I realized that in a

sense it reaches out to every sector. Every organization that is involved in the

capital markets in some way interact via this piece of legislation. So in a sense it

is almost like a glue that holds the entire industry together, and that is why it is so

important that we pay attention to the amendments that are being proposed and to

the changes that need to be brought to bear to this legislation, because if the glue

comes loose we are likely to have some very serious consequences for our

economy, for our society and for future generations.

The legislation that we have before us is well thought out. It is a consolidated

piece of legislation, and it represents an attempt to bring to this House and to our

country as a whole, legislation that is practical, fair and equitable. Mr. President,

as I said, the amendments proposed, we essentially coordinated effort on the part

of the Trinidad and Tobago Securities and Exchange Commission, but it also

included input from a number of market actors who, as I said, have been very

instrumental in helping us to get to this stage.

I would like now to turn to the amendments and the specific amendments. I do

not intend to go through all of the amendments, but I would like to deal with what

I regard as some of the hefty amendments, the more weighty amendments, and

leave the rest for perhaps further discussion at the committee stage. So we have

made a number of amendments, Mr. President, and perhaps I can start with the

ones that affect or come out of the definition section of the Bill.

554


The first one had to do with the approved foreign issuer, and this was

recommended to us by—a change is recommended by the market and by certain

market actors. The amendment which we are making today would allow us to

widen the net of potential issuers who may be eligible to be approved foreign

issuers by removing section 4(1)(d). This means that they will still be required to

be approved. These approved issuers will still be required to register with the

commission, but they can use here in Trinidad and Tobago disclosure documents

that are prepared in their home jurisdiction provided that in their jurisdiction, the

level of control and regulation is equivalent to that here in Trinidad and Tobago or

higher.

So what it does is it removes a restriction, allows us to invite new players into

the market with a minimum of inconvenience, but at the same time retains a

requirement for them still to register with the commission, and therefore we still

have some oversight of whatever changes are being—or whatever is being issued

in the market.

The second definitional change we made was in section 4(1), and this was

really to identify which branch offices of registrants need to be registered, in

accordance with section 56(6) of the Act. So what we sought to do is to exclude

those offices which only dealt with administrative functions and which did not

conduct securities activities, so it made the process of registration a lot easier. So,

for example, the recent initiative which we have put in place for back office

processing operations, for example, that would be excluded from needing to be

registered as part of this arrangement. And as I said, this was one of the

recommendations that came to us from those market actors who had started to put

back office processing arrangements in place and recognized that the broadness of

the Act actually captured some of those offices, and there was no need to have

those offices having to be registered with the Securities and Exchange

Commission.

Another definitional change we made, Mr. President, related to the definition

of “limited offerings”. In the legislation as exists now we had Government, we

did not distinguish, or the way I should put it is that private issuers did not need—

that is people who would be issuing securities, it is fewer than 35 persons—were

given an exemption from the requirement to register that security, but

Government entities were not considered a private issuer. So if we had a

Government entity which was doing an issue which was a private issue to say 20

sophisticated investors, they had to register, whereas someone else who in the

private sector who was doing an issue to 30 investors did not need to register.

555


So what we sought to do was to include the term “government entity” in the

definition, and to provide that Government entities offering securities to fewer

than 35 persons would be granted an exemption from the requirement to register

that security. In addition, part (b) of this definition was inserted to ensure that

issuers who want to avail themselves of the limited offering exemption build in

appropriate restrictions in the legal document as it is related to those securities. In

addition, we put in a new part (d), which we have now introduced into the

legislation to ensure that issuers who want to avail themselves of the limited

offering exemption are made aware that they cannot offer the security to the

general public. So we have put that in as another clause which we will see in the

information which we have provided to the Senate.

We have also, Mr. President, included a new definition or an expanded

definition of market actor in section 4(1), and in doing so what we sought to do is

to ensure that as many people were captured who interact with the market, as far

as the SEC is concerned, in order to ensure access to information that is in their

possession that may be needed in the event of an investigation. So what we have

said is that there are certain market actors who, based on the definition as it stood,

may have been excluded and therefore did not necessarily need to register with

the commission, but they provide important services to market participants. We

thought that it was important in that instance, that where they are providing such

information and such services to market participants that the SEC should be able to

access information that is in their possession as part of an investigation that might

be ongoing, and therefore we have included that change.

We have also looked at sections 4, 5 and 6, where we found the definitions to

be too broad and captured more than we expected them to capture. So what we

have done is tried to tighten up that definition which in essence required all

persons regardless of where they were located or based, who provided any

investment, advisory or brokerage services to a person in Trinidad and Tobago to

be registered with the commission to do so. So we have therefore made some

changes to perhaps make that less broad than it is in the legislation.

Perhaps the best way to explain it is, if for example you had, let us say, a

company sent its employees here in Trinidad and Tobago to work for six months

with a branch office here in Trinidad and Tobago, and while they were working

here and resident here, their broker in the United States called them and say,

“Well, look, sell this share and buy this share”, in effect it turned out to be some

kind of advisory services and they had to be registered here, whereas that was not

the intention. I mean, if you are here on holiday, if you are here just on a short

556


vacation and your broker called you, it should not be against the law for you to

answer the phone and tell the broker, well, no—your own broker in the United

States, and to say, “Well, look, I agree with you. You should sell those shares and

buy these additional shares in the US market.” I am not talking about in the

Trinidad market.

So we recognize the fact that this may have been a bit broader than we had

contemplated initially, and therefore what we sought to do was to try to limit the

application of that section, so it became more relevant to the industry and more

practical in terms of its implementation.

2.45 p.m.

Mr. President, there is, however, a further amendment here, which I would

want to take at the committee stage, that would allow foreign brokers, dealers,

advisors and underwriters, or their equivalent, to solicit and effect transactions

with existing registrants or certain foreign persons. Again, what that is, there are

people who access US-dollar investments in the United States, but through a local

broker and, in fact, the local broker simply provides an electronic service that

allows you to access investments overseas. It requires therefore the international

broker, the party in whichever jurisdiction it was, to also register with the SEC.

We recognized that based on what is happening in the market and the services

that are being offered, that we needed to make an amendment to address that

particular issue, which was becoming a difficulty in terms of continuing business

in that particular area. So we have made a change which we would want to

introduce at the committee stage of this Bill. It is not in the legislation—in the

changes to the legislation that you have before you.

A further change we have made, Mr. President, is that the term “review” in

section 6(e) of the Act was inserted to measure and evaluate risk exposure in the

securities industry, in order to clarify that the commission can conduct reviews of

its registrants or self-regulatory organizations. So this was a change that we made

in order to clarify what we think is an existing power that the SEC has, but which

perhaps needed additional clarification in order to make it very clear.

I come now, Mr. President, to a change in the legislation which relates to the

commission, that Independent Senators were very strong about at the time when

the legislation was debated in December of 2012, and that relates to the selection

of commissioners as well as the appointment of the deputy chairman of the

commission. The first is we made a minor change, which is to say—the current

Act says that we will ensure that an officer of the Ministry of Finance and the

557


Economy is one of the persons appointed to the commission. We have just made a

small amendment to that—it is small but important—it is a senior officer and not

just any officer of the Ministry of Finance and the Economy.

We have gone on also to amend the section to say that the President and not

the Minister is responsible for appointing the deputy chairman of the commission.

So the hon. Senators on that side have denuded me of some of my authority, but I

think I could live with that. [Laughter] So we are moving to make that change to

the President to make that particular appointment.

There was also another amendment, again with respect to commissioners, that

members of the Independent Bench were very strong on, and that related to what

qualifies one to be a commissioner. We have therefore broadened the

prerequisites, having regard to the points that were made by the Independent

Bench. We have brought in therefore the request which has been made by the

Independent Bench, and we have put three amendments in there: one is to restrict

who could be a commissioner, one is an individual registrant.

So if you happen to be working for a market registrant, you can no longer be a

member of the commission. In fact, I had one resignation recently as a result of a

commissioner going to a market registrant, which was a voluntary thing on the

part of the individual, but, of course, we thought it should now be made explicit in

the legislation. It should not be left to a voluntary effort on the part of the

individual. Secondly, an individual who was a senior officer of a company which

was wound up or placed in receivership in the last 10 years, and an individual

who was a senior officer of a regulated entity, where that entity’s regulation was

revoked—so all of those are additional changes which we have made and which

we have taken on board as a result of the comments made by the Independent

Bench.

We also needed to clarify—and the feedback here is from the market—some

of the market actors had come to us and said that we needed to address what

constituted a material pecuniary or proprietary interest in a registrant, where that

interest is held by a commissioner. It is clarified as one holding 10 per cent or

more of the equity or voting securities of a registrant; except that what we did is

reduce it to 5 per cent in the case of a reporting issuer, because the reporting

issuers tend to have much larger capital bases, much greater degrees and levels of

influence, and we thought that perhaps in that case we should make the hurdle a

little more restrictive as far as reporting issuers were concerned. So we have made

those changes as far as section 11 of the Act is concerned.

558


We also thought that we needed to deal with section 18, which deals with

where a commissioner declares an interest in a matter that is before the

commission. We have introduced—I call it a slight change in the wording, but

sometimes a slight change in the wording is a big change in the meaning—

[Laughter]—where a commissioner declares an interest in a matter that is before

the commission, what we have done is put in new wording to clarify exactly how

the section would work. We say of course that the person must recuse himself, but

the change in the wording is an important part of what we need to pay attention to

as we deal with the issue in the committee stage of the Bill.

Another issue that came up was the time line for the annual commission report

to be laid in Parliament. It was pointed out to us by the Independent Bench that

we said the Minister had to lay the annual report, but we did not say when he had

to lay it. We therefore thought that we should regularize that by stating explicitly

that the Minister had three months within which to lay the report in Parliament,

once he had received it. So it means, therefore, it is something that we will have a

look again at as we get to the committee stage.

We also dealt with an issue of availability of documents to the public under

section 33. I think, Mr. President, this is one that I am sure we will have some

further discussion on. What we tried to do here is to make the legislation

consistent with the Freedom of Information Act. At present, only documents filed

explicitly with the commission can be made available for public inspection. We

are also looking to allow the commission to keep private or confidential private

information which is provided to it in confidence. There is always a very fine line

when you are dealing with keeping information from the public domain and,

therefore, it is a matter that did exercise our thinking for quite some time before

we came down on the side of the particular changes that we are proposing in these

amendments here.

We have added another condition that the commission can use to exempt

certain documents from disclosure, and that is where the disclosure of the

document would be exempt under the Freedom of Information Act. The intention

here in dealing with these is to allow the Securities and Exchange Commission to

have access to information which would facilitate it in allowing it to prosecute, to

clear up malfeasance, to identify and go after wherever there may be any kind of

wrongdoing in the industry, and to allow market actors to come forward and

provide this information to the Securities and Exchange Commission in private,

and for the commission to keep some of that information, as well as the identities

of individuals under some level of confidence and confidentiality.

559


Therefore, the issue, of course, is that again there is the question of the

delicate balance it needs to be arrived at, but we are of the view that this

amendment tries to find the right balance as far as that is concerned.

We have also made some minor changes in terms of things, for example, like

the number of forms that are utilized by the commission. There is a change that

crops up in a number of different spots. I will not speak to it; it was just simply to

change from where we say prescribed form to say, “in such form as the

Commission may determine”. It is really intended to give the commission a

certain amount of flexibility in terms of the number of forms, the type of forms,

the kinds of disclosures that are requested and the format in which the information

is provided to the SEC.

Section 46, Mr. President, is also an area where we thought it was important

for us to make some changes. We have included a time line of 30 days for

publication of a notice of disciplinary action against a member or an employee of

a member. We have also worded the amendment in such a way to ensure that the

publication takes place only after the alleged wrongdoing has been proven. What

we tried to do is to put in a caveat and put in something to perhaps protect the

interest of members of the public, and in a sense to not expose persons to the

public glare unless we are very clear that there is reason to do so. [Interruption]

Mr. President: Minister, just drawing to your attention that you have 10 more

minutes.

Sen. The Hon. L. Howai: Thank you, Mr. President.

Section 48 also is an area where we have made a change, and we propose to

make a further change in committee. I will not go into it at this stage; I will leave

the discussion further for when we get to the committee stage of the Bill.

Section 49 we have also made some changes, as we thought that the term

“market actor” was too broad in this section, and captures persons who are not

registered with the commission in any capacity. We, therefore, have made a

change to include only persons who are required to be registered under the Act.

We think that this will allow a greater degree of equity and fairness to persons

who are potentially individuals that the SEC may wish to prosecute.

We have also made a further change, Mr. President, in section 51 where we

have extended the time, and this is a request that came to us from various listed

companies who deal with registrants, particularly foreign registrants, and they

therefore asked for an extension of the time. Right now the period of time that we

560


have is 30 days, and the request was made that we change that to a longer period

of time, and we have therefore made the change to 90 days instead of 30 days,

which would allow the registrants, particularly foreign registrants, who could

function in the local market as a broker, dealer or investment advisor. We have

heard the comments of the market participants, particularly the listed companies,

and we have made a change as suggested and recommended by them.

Under section 54 of the legislation, financial institutions or a registrant who

becomes a substantial shareholder, a time frame of one month is placed to inform

the commission of such in writing. Section 54(9) was also added to provide for

notification of the commission, where the shareholding of a substantial

shareholder changes by 5 per cent or more. So we have put that in as a change to

the legislation.

3.00 p.m.

We have also amended section 61 to clarify to whom the limited offering

exemption would work and also how the process for utilizing the exemption

would work.

Section 64 is amended to clarify the operation of any material change in

reports made to the commission by the issuer. This would only be allowed where

the issuer can convince the commission that the change is in the public interest,

So there will be a requirement for that to be proven. And there is another section

where we deal with things that are in the public interest or contrary to public

interest and we will speak to that at a later stage.

There is another change that we made in terms of auditors, just to allow

foreign auditors, people who are recognized in foreign jurisdictions as auditors, to

also audit documents which are presented here in Trinidad and Tobago.

We have also broadened section 69(2)—this came from the Independent

Bench—to ensure that an approved foreign issuer is no longer exempt from filing

material documents as per section 69(1), if 20 per cent of his voting shares is

domiciled in Trinidad and Tobago. So we have made that change as was

recommended by the Independent Bench.

We have also made some other changes relating to definitions of financial assets in

section 72 which you would be aware of and, of course, we have also made a change

here to trading in asset-backed securities, section 73, requiring that an asset-backed

security to be prospectus exempted if it has an approved rating or if a risk disclosure

statement has been filed. So those are some changes that we have made.

561


There is a change in section 74 to allow what we call market reads. What has

happened is that the existing legislation—it is normal where securities are being

underwritten or arranged, for example, that the underwriters will be able to do a

market read which allows them to go out into the market and gauge the appetite of

the market for a specific, a particular investment.

So the way the legislation was worded could have restricted or could be

interpreted as restricting the market reads and so on. So therefore, we have

amended this particular section, section 74, to allow for that type of activity to

take place by reading of the wording. The wording, of course, does not refer to

market reads, but the way it is worded is intended to ensure that underwriters can

go out and gauge the interests of potential investors in a particular security

without breaching the legislation.

In section 89 it appeared that the way the section was written, that the commission

could only review the books, records and documents required to be kept under section

87. So we have made an amendment to that to spell out exactly that—in fact, it includes

all documents.

We have also made an important amendment to section 98 to take account of the

relevant investment experience of the client. Sometimes brokers, broker dealers when

they are selling investments to clients, they do not take into account the level of

experience. So we specifically and expressly stated now that they must take into

account the level of sophistication of the buyer on the other side in providing the level

of advice and how they actually provide that advice.

We have made an exception to insider trading in section 104, and I think that is

something that I need to draw to your attention. And basically the exception relates to

persons who are involved in employee stock option plans and, therefore, in a sense,

have access to information that the normal market would not have. We have identified

those persons, and what we have done is, the way that the Act was, it allowed—the

way the wording is, it restricts the ability to do trades to where both particular instances

apply. Now what we have done is replaced it with the word “or”, and what this does is

it creates two options or two opportunities where the person may be in a position to

trade in the security as an insider.

Section 136 deals also with persons connected to the issuer. We thought it was a

little broad as it stood now. So what we have done is that we have narrowed down the

definition there.

Sen. Prescott SC: Mr. President, may I just seek by way of expansion or

clarification. If you could refer us to clauses 50 and 51 dealing with section 109 and

112, please.

562


Sen. The Hon. L. Howai: Sorry, what?

Hon. Senator: Fifty and 51.

Sen. Prescott SC: Clauses 50 and 51, dealing with sections 109 and 112. And I

wonder whether you would care, at this point, to tell us what is the thinking behind

those changes?

Sen. The Hon. L. Howai: Clauses 50 and 51. [Crosstalk] Hold on. Hold on.

Fifty—am I going over my time?

Mr. President: I will certainly allow you some injury time to deal with that. I did

not mean that in any pejorative sense. [Laughter] Not that you injured the Minister.

Sen. The Hon. L. Howai: It does feel like injury time, Mr. President.

Mr. President: In fair play we certainly would allow you some period of time

additional.

Sen. Prescott SC: We could deal with it later. I just thought that now might have

been a good time.

Sen. The Hon. L. Howai: Okay. Actually this deals with the issue of persons who

may be exempt from registration or the SRO.

Sen. Prescott SC: Minister, may I suggest that we could probably deal with it in the

committee session.

Sen. The Hon. L. Howai: Okay. Sure. Yeah.

Sen. Prescott SC: Thank you very much.

Sen. The Hon. L. Howai: All right. The section 139, we made an amendment

there. These came in from market participants in the event that there are several

underwriters to an issue to reflect the liability specific to the underwriters’ share or

portion of the total distribution of the securities.

So what we were saying is that if you were underwriting 10 per cent of the issue,

that you should only be responsible for 10 per cent of the liability arising from any

particular action as far as that is concerned. Then, of course, the publication of the by-

laws, section 148, the Act clarifies in more detail by the by-law making power of the

Minister who acts on the recommendation of the commission and clarifies the order,

making powers of the commission.

Mr. President, there are a number of other areas that are in the legislation that we

have made changes to that perhaps we would have liked to perhaps clarify some

more, but I am sure that we could take those in the committee stage of the

legislation.

563


I think, just in wrapping up, I would like to say, Mr. President, that again, this

piece of legislation is an extremely complex piece of legislation. It affects a

number of areas of business within the sector. This is a piece of legislation that

impacts on—touches nearly every other piece of legislation in the industry

because at some stage we go into it, every actor, whether you are an insurance

company, whether you are a pension plan, whether you are a trust company, a

merchant bank, whether you are a bank, you know, whether you are a brokerage

house, whatever it is, you are going to at some stage interact with the market and

your conduct in operating with the market, will fall under this piece of legislation.

So it is very, very important and it is something that we need to spend some time

on to make sure that we get it right at the committee stage. I think we need to ensure

that this is very good law because it will impact the entire economy. The financial

services sector is a sector that facilitates the levels of activity that take place in all other

sectors of the society and therefore, it becomes almost like a lynchpin, an axis around

which all the other sectors revolve. And we want to be very sure that we have the right

things in place, the right kind of legislation, the right kind of capabilities in terms of

enforcement that will ensure the continued growth and development of this particular

sector, and that Trinidad and Tobago remains an important part of the financial services

industry in the region and it retains its place as the leading financial services economy

in the English-speaking Caribbean.

Mr. President, I beg to move. Thank you very much. [Desk thumping]

Mr. President: Hon. Senators, who wish to joint, at this stage, may do so; join in

the debate. But of course, before I do that, I will put the question.

Question proposed.

Sen. Dr. Lester Henry: Thank you, Mr. President, for allowing me to start off the

Opposition’s response to this amendment to the Securities (Amdt.) Bill. As the Minister

pointed out, it is a very complex and very involved piece of legislation that was in the

process of being formed for many, many years under the PNM and subsequently under

the current Government. So the Bill has been in some existence, in some shape or form,

for quite a while and has had a very long gestation period. So therefore, we have no

problem understanding the importance and the value of the Bill in terms of helping to

develop and protect our financial services sector.

We also can agree with the Minister that some aspects of the Bill touch on almost

every aspect of the financial system and that, you know, financial growth and

development are very important to the country. But it is quite interesting that, of

course, the Bill was rushed through somewhat, that is one of the reasons we find

564

Securities (Amdt.) Bill, 2013 Tuesday, March 11, 2014 [SEN. DR. HENRY]

ourselves having to make all these amendments so quickly in order to meet the

IOSCO requirement. And once again, the Opposition cooperated with the

Government and helped; got the Bill through a joint select committee and in fact,

helping significantly in inputs into the final product in order to meet the deadline

that we were told we were faced with.

So sometimes I feel it is quite annoying to hear when Members of the

Government jump up continuously and say, all we do is oppose for opposing sake

and we never support anything the Government brings. And you know it is a lie

and you keep repeating it over and over.

Mr. President: You cannot attribute lies to any party inside of here.

Sen. Dr. L. Henry: I apologize.

Mr. President: You will have to withdraw the remark.

Sen. Dr. L. Henry: You know it is an untruth. Sorry. I withdraw. Right.

So it is quite disheartening and also, the Minister ended on a very narrow note

in terms of outlining specifics, changes to the legislation, but he started off very

broadly. He waxed very warmly about the international environment and financial

crises and boasted that our financial system was basically sound and he had some

glowing comments to make. But once again, the Members of the Government say

all these things and they act as though it just fell from the sky. Many of them do

not have the humility to understand that they inherited a very solid system [Desk

thumping] in terms of our macroeconomic fundamentals in this country. Even

today, after three-and-a-half going on to four years, they fail to give credit and to

understand what was done and what they inherited.

Remember, back in 2010 when they came in screaming about how bad everything

was in the country, we warned them about, you know, well if you cry too much wolf,

eventually a wolf will show up at some point. And one of the first debates—in fact, the

first debate in the Senate back in 2010 talked about the state of the economy which they

have subsequently boasted about after that embarrassing debate, because they started

off saying that everything was so bad, everything was so bad, and then eventually had

egg on their face. Because the stability of the financial system and most of what they

can boast about now, in spite of the Clico debacle and so on, was, all of that, which

they found when they came in, in terms of our low debt, that is why they can borrow so

much, including funds from China, an A-rating by the international credit-rating

agencies; solid, over $9 billion in the Heritage and Stabilisation Fund, all of this was

before May 2010, and very solid foreign exchange reserves as I mentioned.

565


3.15 p.m.

So we understand that the importance of sound indicators and having a solid

financial system. As I said, the Minister waxed very warmly about all of this.

Also, because of the fact that the Clico debacle and also the HCU happened under

our watch, we are fully aware of the regulatory weaknesses that helped make

those things happen, that contributed to those things, and hopefully we will be

able, if not under this Government, the next PNM Government, next year, will be

able to [Desk thumping] put things in place to avoid this.

Of course, the Minister also mentioned some things that kind of bothered me a

bit in terms of, I know there are some elements in the financial system, some

players who favour the move towards a single regulator. I am resolutely opposed

to that, and I do not think that given what we had experienced, I do not think it

would work in our system and I am in no way in favour of it. In many

jurisdictions, whereas the Minister pointed out, it has shown some benefits, in

some others they have gone back to separating out the regulators because of

significant problems in the single regulator. Then we have the thorny problem,

how do you move towards that? We have had the situation where the Central

Bank has been touted to be the regulator of the credit unions for, probably, more

than 10 years now, it still has not happened. So, what I am saying is that that may

be an idea that will just remain an idea because our system is difficult to move

towards that in our type of system.

And the Minister talked about bringing the financial system up-to-date and

modernizing, upgrading and so on, but I also want to warn the Minister that sometimes

if you are not too sophisticated it could actually pay off, because one of the things that

we did not have on our financial landscape, that helped protect us from some of the

worst effects of the financial crisis which the Minister mentioned. Things like

derivatives and short selling and all those other fancy financial products that were out

there on the international market in the big financial markets, had no place here and, to

a large extent, we did not feel the full brunt in a direct way, of the financial crisis

because our market did not attract a lot of foreign capital. In fact, most Caribbean

markets do not attract a lot of portfolio investment. We attract foreign-direct

investment, but not so much portfolio investment, and in a way we do not have what

we call “hot money flows” to these types of economy. If we did have a lot of “hot

money flows”, we would have been in significant trouble.

So, what I am saying is that, yes, we are all in favour of developing and

modernizing the financial architecture of the country, but you have to be careful that

you do not create opportunities to expose yourself to those types of development

566


where you make yourself so attractive to investors as far as portfolio investment

and you end up having these crises, because, as we have seen in country after

country where you had a rapid development inflow of capital investing in stocks

and shares, as I said, portfolio investment, and that could soon be reversed in an

instant and leave your country in quite a bit of a mess.

Let me just give this example in terms of how we, sometimes, not being as

sophisticated could pay off. As the Minister was saying, he mentioned the

Heritage and Stabilisation Fund. Now, one of the things about that was during the

year of the crises in 2009, it turned out that one of the best sovereign funds of that

year turned out to be the Trinidad and Tobago Heritage and Stabilisation Fund in

terms of performance. Many of you may not know that. And part of the reason for

that, is that we did not have a very sophisticated investment strategy, so we were

not involved in all of the things that went bust, and we maintained a fairly average

rate of return, and because everybody else lost so much, we ended up looking

quite good. So, that is the point I am making, that, yes, it is all good to rush for

sophistication, but if you are not careful that could come back to haunt you.

So, in terms of structured development of our financial sector we are all in

favour of it and we hope that the financial sector could become part of the engine

of growth of the country rather than a hindrance to growth of the country, and it is

not always clear which one it is. As a matter of fact, I teach this on a regular basis

at the university. So, yes, in terms of the impact of the financial sector and our

overall development the reviews are mixed at best. I know that many in the

financial system may not like it when I say that but that is what the empirical

evidence shows.

So, in terms of the other issues I want to raise, importantly the Minister said

the only real thing that matters in the financial system is confidence, and he was

very, very sure to emphasize the importance of confidence. Then he actually went

on to mention the word “integrity” in the financial system, how important that

was. So, I was wondering if the Minister thought we would forget about the FCB

issue that just happened under his watch where we have this situation where two

of the bank’s leading executives ended up owning thousands of shares of the IPO

that were issued.

I want to submit, Mr. President, that this is a very significant and serious issue

and I do not think it should be forgotten, swept aside or even downplayed in any

significant way. When we have such practices taking place before our very eyes it

undermines the same issue that the Minister went to great pains to point out about

confidence and integrity. If you have people behaving in such a manner and, not

567


only that, they are left in their position. They are still there. The CEO is still there,

and from all information the manager of risk is still employed at the bank. Look at

the striking allocation of shares that came out in the FCB financials.

If you look at directors/senior officers of the bank, and the names and number

of ordinary shares are listed: Nyree Alfonso, 5,000 shares—I would not call the

exact figure—Anil Seeterram, 4,100; Cindy Bhagwandeen, 1,609—these are

shares of the bank that these directors owned—Shobee Jacelon, 2,372; and

Anthony Mohammed, 3,897; Vishnu K. Musai, 5,422; John Tanyan, 3,135; Larry

Nath, 215,000 shares as a director; Sharon Christopher, 23,000; Jason Julien,

5,000—this is from the report. It is public information—H. Philip Rahaman,

659,588 shares—as documented and made out there in the public—Shiva Manraj,

20,000; and one or two other directors with really relatively insignificant

shareholdings.

So, are we to believe then that these two directors of the bank were so astute or so

much smarter than everybody else, had access to all of these resources to obtain such

large proportion of shares of an IPO of the bank? Now, this issue raises several

significant questions, questions of propriety, questions of appropriateness and, of

course, insider trading as the Minister ended, towards the end of his presentation,

mentioned, because, as we know, there is a certain allocation of shares that were made

available to employees of the bank. We are told that each employee was supposed to

get up to about 5,000 worth of shares, so how did these two employees who happened

to be directors of the bank end up with so much?

So, obviously, Mr. President, during the offering there were employees who would

not have taken up the 5,000 limit that they were entitled to for various reasons, either

they were not interested or they could not get the financing, whatever. So, there were

shares that were not taken up. So, obviously there would have been excess shares that

were not taken up by the employees. One of the key questions is, was this information

made known to the other employees of the bank and was it made known to the public?

Now, the point is that this particular gentleman who is just a normal employee of the

bank, well, of course, and a director, the manager of risk, somehow was able to come

up with the financial resources to buy over 600,000 shares. Of course, this raises a lot

of questions in terms of where does a regular employee get this kind of money from to

make such purchases? [Interruption]

Now, think about this properly. This is the manager of risk for the bank, so,

whenever this person decides now at the first opportunity I will sell, because,

obviously after the IPO the price went up. Now, if you are the manager of risk of a

bank and you sell at the first opportunity, what signal does that send to the public?

568


Is it not quite logical for the public to say, well, wait, if you are the manager of

risk and you are selling at the first opportunity, should we not follow suit? Would

that not adversely affect the stability of the institution? Did any of the people

involved think about this? And, of course, when you have such—normally it is

not unusual anywhere in the world for employees and so on to have share

ownership. We know that. So, I am not trying to say that that in itself constitutes

anything illegal or unusual, but usually there are provisions for how these shares

can be disposed of and, of course, notwithstanding the fact that the shares—the

question resolving how the shares were supposed to be gotten by this individual in

the first place, how did he obtain these shares?

My understanding, Mr. President, is that there was not supposed to be anyone

fronting for anybody else. The employees were supposed to buy the shares in their own

name for themselves and not as agents for anyone else, so are we to conclude that this

particular manager acted as an agent for some friend or family who provided the funds

to make the purchases, and, in such a case, how could this person remain on the job?

This is a public company.

And not only that, but the media is focusing on the risk manager, but the CEO did

the same thing. So you cannot have one stroke for one person and another stroke for

another one. The CEO did the same thing, it is just a small amount of shares. Right?

3.30 p.m.

So what I am saying is that, you talked about confidence in the system and integrity

of the financial system, and the bank in itself, which could be, as the Minister himself

would know, probably better than anyone else here because he was CEO of the bank,

that you interfere with the public perception of a bank and you could end up in real

trouble. We do not need to give you a lesson on that, you should know that. And

furthermore, if no action follows, it shows that you are condoning such behaviour. So

whether it turns out to be illegal, we do not care about the legality of it, it is the

perception and the impact on the confidence of the institution that it could have and you

must not try to run or hide from that.

Now, in terms of the—another aspect that I would like to move to now, I may

come back to that FCB in a bit, I want to raise the issue concerning this change,

although the Minister said that it was probably there already, I am not sure what he

really meant by that because in the Explanatory Note, when it comes down to clause 5

it says it:

“...would amend section 7 of the Act. This amendment would include the

addition of a new…”

569


“function of the Commission to assess, measure and evaluate risk exposure in

the securities industry.”

And further down, it reads:

“Clause 5 would amend section 7 of the Act. This amendment would include

the addition of a new power...to monitor the risk exposure of registrants and

self-regulatory organizations and to take measures to protect the interest of

investors, clients, members and securities industry where necessary.”

Now on paper, that sounds very good. There is nothing that seems

objectionable to give the SEC more powers and so on. But one of the issues we

have had in terms of regulatory failure in the country over the past decade is the

fact that our regulatory institutions have tended to be understaffed, poorly staffed

and also starved of resources. It is one of the issues that needs urgent attention. So

giving the SEC this additional task—the first problem I have is, is the Minister

committing to provide the kind of staffing, the expertise and the people, with the

right level of training and status, to be able to carry out these functions properly?

Because, traditionally, as we know, the SEC has been pretty much in a state of flux

with a relatively high turnover of staff for a regulatory body, right.

Hon. Senator: We will deal with it now.

Sen. Dr. L. Henry: You have dealt with it? So, well, maybe in your wrapping

up and so on, you could explain exactly what you mean by, “you dealt with it”,

because—[Interruption]

Sen. Al-Rawi: What brand he is using too. [Laughter]

Sen. Dr. L. Henry: Well yeah, the CEO is just one individual, but the

functions that you are listing here in terms of evaluating risk and so on, are not

exactly—[Interruption]

Hon. Senator: Are you talking about the securities initiation?

Sen. Dr. L. Henry: Yes.

Hon. Senator: Thank you.

Sen. Dr. L. Henry: Yes, yes, I know that you hired Wayne. So what I am

saying is that, but that is just one individual, that is not an end all, you now start.

In other words, you have to find the right, competent, technically qualified people

in order to make this thing work if you are serious about what you are saying in

terms of implementation of this legislation, because as I have said repeatedly, in

various debates, Mr. President, I use the cricketing term, “you cannot set a field

570


for bad bowling”. And very often you could make the best legislation, and if you

have the wrong people or you do not have the people in place to carry out—to

implement, then you might as well just forget it, “yuh spinning top in mud”. We

know that this Government has a propensity to put the wrong people in the wrong

places, [Desk thumping] and your track record of hiring unqualified or even

disqualified people is impeccable. [Desk thumping] The thing is that—I will not

mention the false papers you know, it might be a bit too explosive, but seriously

that is the track record of the Government of the day, and if you keep doing that

all of this will come to naught.

Now, on a different note, Mr. President, I also want to raise a matter of

concern that I hope the Minister might address or deal with at some point, and that

is the issue of—concerning the same point in terms of monitoring risk and so on,

of the actors who come under this Bill, the brokerage houses and so on. Now, one

of the problems by emphasizing the fact that the SEC will now have this power,

you run into the potential conflict with the Central Bank, and then secondly, if the

SEC finds out that a brokerage firm is too highly exposed, the note says it will take

action. Well what action can you take even under this amended legislation? What

can the SEC do if it actually finds that a particular brokerage house is not

conforming to the best practices in terms of risk and so on? What can they

actually do?

Now, I have seen enough, perhaps, of what might be available, but I think

what we have existing today in Trinidad and Tobago is very much short of a

length in terms of what we can actually do to manage those types of potential

crises. Now, also, one of the problems—well another problem with this particular

approach and emphasizing this role, this new role as the note says, of the SEC, is

that in our system a significant portion of the brokerage houses are owned by

commercial banks and we have some independent operations, you know,

Caribbean Stockbrokers, Sheppard Securities, Bourse Securities which I am sure

most of you are familiar with, especially on the Independent Bench—[Laughter]

so you have independent brokerage houses, but a significant portion wise: FCB

Investment Services, Republic services, Scotia investments, AIC, are already

owned, partly or wholly owned by financial institutions that are already regulated,

such as the commercial banks.

So, how is this going to work in practice if the SEC goes in there and sees

something, let us say, at a brokerage house that is owned by a commercial bank,

how would you actually even be able to evaluate whether they are too risky in

terms of what they are practising? It is a difficult thing. How would you set a rule

571


to say well okay, are we treating the brokerage house as a complete separate

entity from the commercial bank that owns it? Okay. So it could either lead to

potential conflict in terms of the Central Bank or it could just be that the SEC

continues what has been the norm now, just doing nothing in terms of evaluating

risk, you just back off, and even though they have the power given in this

legislation, they may not actually do anything because they will say, okay, that

will come under the Central Bank. But, perhaps, only try to apply the scrutiny to

the independent brokerage houses.

And speaking of that, there is another variation in terms of where I have a

concern in terms of protecting the stability of the financial system, Mr. President.

Because what we have right now with the brokerage houses and so on, is that a lot

of brokerage houses offer brokerage accounts and not enough custodial accounts.

So, now, there is a significant reason why I mention this, in that, if funds into a

brokerage account and public funds, people, ordinary investors, the broker can engage

in trade using that money. In pure custodial accounts, the custodian generally does not

trade, it just acts as a protector manager of those funds, right, and what we have a

preponderance of in our local market is more brokerage accounts. Okay. There might

be consideration or you might want to give consideration to the idea of encouraging

more custodial accounts especially for our big entities like NIB, Unit Trust and so on,

our big collective investment schemes or what people call mutual funds in a way. So

what we have, the brokerage accounts imbalance, tends to create a much more risky

situation. So what we have is that in the event if a brokerage house fails, it is very

difficult to access who actually has ownership of the assets.

Now, I am open to get any clarification as to—[Interruption]

Sen. Ramkhelawan: I will clarify for you.

Sen. Dr. L. Henry: What? I am sure you would, but I am making my point that in

terms of the risk involved, our system could be better protected given the further

development of more custodial accounts rather than brokerage accounts. Now, if you

look at what happened with MF Global, the Minister mentioned global financial crisis,

this is precisely what happened, when the accounts are supposed to be separate in the

brokerage accounts, but once the firm gets into trouble they grab everything and

everybody gets cleaned up. That is what had happened with the MF Global, you could

go and check it.

So what I am saying is that, we should be encouraging more custodial accounts

rather than just simply brokerage accounts. And quite clearly, in the event that a

Ministry or the SEC or whoever the regulator happens to be, intervenes in a

572


brokerage house, let us say, that has been overexposed, too highly leveraged and

runs into all kinds of problems, how do you decide who gets the assets of that

brokerage house? There is a matter in England where they try to deal with this

situation where they set up an entity to handle investment firms and brokerage

houses because they realize there were specific problems for those as opposed to

normal banks.

So I would suggest that the Minister take a look at that and see, because in the

end what we are talking about is avoiding a potential crisis down the road and

enhancing the stability of our system. Because my understanding is that the way

the system is set up now, a lot of our big funds have their money tied up in

brokerage accounts to a large extent, as opposed to custodial accounts. And the

indication in the large parts of the world—and my colleague at the back could

disagree if he wants, I am sure he will in fact, but I stand my ground in terms of

the point I am making, okay, because I am putting myself in the shoes of the

Minister of Finance in terms of protecting the stability—[Interruption]

Sen. Al-Rawi: Soon, soon.

Sen. Cudjoe: All right. [Desk thumping]

Sen. Dr. L. Henry:—of the financial system. [Desk thumping]

Sen. Al-Rawi: Very soon, very soon.

3.45 p.m.

Sen. Dr. L. Henry: So my perspective, Mr. President, is the overall stability

of the financial system. So if this issue in terms of switching to custodial funds

rather than brokerage funds is critical in terms of enhancing the overall stability of

the financial system, I am all in favour of it and I make no apologies for that.

Now, one of the things that I understand happens with some of the brokerage

houses—the other people involved could speak for themselves. For example,

when there is a bond sale, like the bond issued by the Government—the Citibank

bond recently—there is a certain minimum that you could buy into that bond if

the bond issue was over US $550 million. So if investors now want to buy into

that bond, you could buy in I think the minimum of somewhere about US

$200,000. To buy into that bond they set a minimum.

Now, as far as my understanding is, some brokerage houses will offer local

investors something below that US $10,000/$20,000 to buy in to that bond and

they will pool all this money. There will be a commingling of funds of all kinds of

573


different investors to reach up to that $200,000 minimum, and therefore, they will

all share in whatever interest is received from that. Nothing wrong with that. But

the problem is, if something goes wrong with either the bond or the investment

house or the brokerage house, sorry, it is very difficult to allocate who gets what

in the final analysis. If you have to reimburse everyone, it is quite difficult if not

impossible. So it creates a very risky situation for those smaller investors who are

buying into something, a larger share of a big pie. Okay?

So what I am saying is that these issues have to be considered in terms of

protecting the stability of the financial system. We have not had a particular crisis

in that area yet, but we do not have to wait till a crisis emerges before we address

these issues, and once we are fully aware of it, as I have been made aware, it is a

major concern that we should not ignore the issue. We should take proactive steps

in order to encourage—like I said, some of our major institutions have their

money tied up in brokerage accounts rather than strictly custodial accounts and

this creates a potentially risky situation for some of our more prominent financial

institutions and also individual investors.

So I hope despite the silence and objections coming from behind, you take my

point very seriously and at least—[Interruption]

Sen. Maharaj: Objections come from behind?

Sen. Dr. L. Henry: Do not start me up on you, you know. You were not

invited to Los Iros? You get leave out? I know you would not know what I am

talking about. Ask your ministerial colleagues.

Now, Mr. President, there are a few other things. Those were my main issues

for today. Since there is every likelihood that we will go before a committee, I

will not spend too much time just like the Minister on the specifics, details of each

objection to every clause and so on, but just to raise one or two issues in terms of

what the Minister talked about.

One of the concerns I have is in terms of the disclosure of public information

by the SEC. The Minister mentioned that there was some concern and it occupied

their deliberations for some time, and I also want to add my concern to that as

well because for things to work properly, there needs to be a level of

transparency, and the essence of the SEC is supposed to be providing information

to the public to safeguard the public against unscrupulous or questionable

wheeling and dealing. In fact, that is the number one reason for their existence. So

if you put exemptions in place where people could say, well no, this is sensitive

and you cannot put this out and we go overboard with that, then the whole

574


existence of the SEC would be basically useless because this is a society—sorry,

Mr. President—where people think everything is confidential you know, and we

accept that as a norm. People are very unwilling to disclose information. In fact,

even public information or information that should be public. So, everybody

always argues that they have a case for hiding something.

So when you go into a situation where you could say, well okay, this entity is

supposed to give if a trade takes places, certain bond issues, certain person is

under scrutiny or being investigated and so on, the public is not supposed to know

anything about this. In fact, I think the Minister made a comment that you would

go public only after the wrongdoing is proven, and I was kind of confused by that.

I mean, what is proof? At what point does the person actually say, well okay?

Unless they come out and say, “Yes, I did it.” How does the SEC really establish

proof that is good enough for public consumption? I have some serious concerns

about that. In terms of people seeking exemptions to say well this might affect my

company in a negative way or whatever, well then that is the whole point of the

SEC. If it is bad information, you put it out there so you will know not to do it

again. If every time a company gets into trouble and they could apply for an

exemption and say, “Well okay, no this will affect our operations and might be

negative, adverse and might affect our share price or something, so keep it quiet,

that is the exact antithesis of what the SEC is supposed to be about.

So we have to be very extremely careful. I am not happy with this idea of

something being proven because, I mean, if a man gets arrested for a crime his name is

in the papers before he is even proven guilty or innocent. Is that not the norm?

[Crosstalk] But seriously, Mr. President, the idea of making information public is

central to the existence of the SEC. In fact, my understanding is that the spirit of the SEC

and SECs in general is that virtually anything that comes in there should be public, and

then you say, well okay, the principle is that all the information should be made public

but there might be certain exemptions that you could entertain, but those exemptions

must be very few and kept at an absolute minimum because what you would have is

people hiding information and the SEC being complicit in the hiding of information that

could affect people’s investment decision and their whole wealth and savings.

I am happy to hear that the Minister said they deliberated on it for a long time, but

the final outcome, I am not sure that I fully understand if that was the best way to deal

with it. I guess it will come up in the committee stage and so on.

But also, take for example an issue raised in the Business Guardian just a little

while ago, probably about a month or two months ago, where a large conglomerate

engaged in the buyout of an operation up the islands—I think it was St. Lucia—

575


and the editor of the Business Guardian was complaining that the price of the

transaction was not made public. I believe it was, yes, Anthony Wilson. He wrote

one or at least two articles on this complaining that it was the duty of the SEC to

make this public and there was some resistance apparently to this. Therefore, the

reason for the article and the complaints that you had a company making an

acquisition and the public was just told this company acquired this other

company—[Interruption]

Mr. President: Hon. Senators, the speaking time of the hon. Senator has

expired.

Motion made: That the hon. Senator’s speaking time be extended by 15

minutes. [Sen. F. Al-Rawi]

Question put and agreed to.

Sen. Dr. L. Henry: [Desk thumping] Thank you colleagues and especially to

Devant Maharaj for the desk thumping. [Crosstalk] So as I was saying, thank you

for the extension, Mr. President. I will wrap up shortly. But the price of the share

was not disclosed so the public was left to guess whether this could have a

material impact on the operations of the said company.

Now again, I have a serious problem with that, in that I think that you should

make the figure public and let the public decide whether it is material or not. Why

would you want to hide the price of a transaction when that is supposed to be—

well, the price is the clearest market signal you could send. That is what all of

economics and business teach us. So when you make an appeal to hide the price

of a transaction, then to me you might even be doing yourself a disservice. That

may not be even a wise decision for the company because very often, by non-

disclosure you create speculation. In fact, when people say we are a rumour

society, it all comes down to the fact that we do not disclose information.

Once you do not disclose information, you encourage rumour-mongering, and

some of the rumours could be very destabilizing. So it might be better, and in

most cases it is better to give the information to put the price of the transaction out

there. Now some people may argue, well, that it is up to the firm, if the firm has

billions of dollars in assets and it buys something for $2, why should it have to

disclose some for the $2? That is peanuts. But in terms of a major acquisition of

another entity—especially the average investor may not have access to the

financials of that entity that was acquired, so how do we know that could not have

a negative impact on the company doing the acquisition that is based in Trinidad

and Tobago.

576


As we all know, many of our local banks went up the islands buying up

branches and expanding and so on and ended up taking a lot of licks and we do

not want to find ourselves in that otherwise because many of our—you know

there was a rapid expansion of RBC, Republic Bank sorry, and then RBTT before it

was taken back by the Canadians, opening branches or buying branches all up the

islands, all over the place, and many of these things turned out to be lemons. So

whereas it looked good and it sounded good, you could advertise that you have

branches in 13 countries across the Caribbean, most of them were losing money

and the profit centre remained Trinidad and Tobago. The operation is right here. I

am sure the Minister is fully aware of this. So therefore, in terms of the disclosure

part, I think we must be strong on that and insist that the SEC has to keep its

exemptions in terms of what it does not disclose to an absolute minimum.

4.00 p.m.

Now, of course, there is another point I will mention quickly in terms of the

non-bank firms that come under the SEC. When we talk about risk and so on, are

we moving towards the Basel risk-weighted capital approach or do we want to

maintain the strict limits, like what we had before of five billion, nine billion and

so on? How are we going to deal with that? I think these are issues that need to be

properly ventilated, and I am sure, given the tendencies of the Minister, he will be

amenable to discussing them and putting something forward that we could all live

with.

With those few words, Mr. President, I thank you very much. [Desk thumping]

Sen. Subhas Ramkhelawan: Thank you, Mr. President, for giving me the

opportunity to speak on this Securities (Amdt.) Bill, 2013. It has been long in

coming since on December 19, and towards the end of the year 2012, we passed

legislation, the Securities Act in this House, and that piece of legislation, with all

its 171 clauses, was passed without any amendment. The reason for that is

because the Government of the day, at that time, made a strong and compelling

case, and the case was that if we do not pass the legislation before the end of the

year 2012, we would find ourselves—and this was a word that was often used in

the past two or three years—“blacklisted”, and being good Senators, as we all are

and we were at the time, we did not want our country to find itself blacklisted.

As a result, it was negotiated at the time that the Government would bring

back to the Senate, and indeed the other place, for consideration, all of the various

amendments that had been put on the table at that point in time, and the

undertaking was given at that time that those amendments would be brought back

577


to the Senate within six months. That was by June 30, 2013. So said, so not done.

And so we had a situation where we did have an update in March 2013, and we

did have another update thereafter, and here we are today, in March 2014, with

these various amendments. Now, this is not a complaint but this is a factual

representation of a situation which has come about.

Let us look now at what is on the table with regard to the amendments. We now

have in a piece of legislation, 171 sections. We now have a Securities (Amdt.) Bill,

2013 with some 68 clauses, but these 68 clauses do not represent in each case a single

amendment for each clause. For example, if you take section 4 of the Securities Act,

2012, what we have are amendments which aggregate more than seven but just that one

section 4 which constitutes or is part of clause 3 of this piece of legislation of this Bill.

So, I myself have lost count as to the exact number of amendments that are there to be

considered. What I can tell you is that it is no less than 68; I cannot tell you how many

more there are in this piece of legislation. So, it is critically important that we do not

rush headlong into passing this piece of legislation without carefully considering in

each case what are the amendments that are being put forward and the long-term

implications for us in terms of this piece of legislation.

Let me start by saying that the securities legislation is really a part of a trilogy of

legislation, as the hon. Minister said, that will comprise the basic infrastructure for

financial legislation for our country going forward if we are to take the average time

span that exists between one major adjustment to a piece of legislation to the next

major adjustment. I would have to say that it would be another 14 years before we see

another set of serious amendments to this legislation. In the case of insurance—and I

will speak to the trilogy, which is financial institutions—banks and non-banks—

securities—what used to be called securities companies because the legislation excised

the term “securities companies” and started to deal with three areas: one, broker-

dealers; two, investment advisers and three, underwriters; and the term “securities

companies” was then excised from the legislation as it moved to the 2012 Act.

The third part of this infrastructure, if we can call it the three-legged stool, the third

part of this trilogy, is insurance legislation. Insurance legislation is not 14 years but

something like 34 years since any major amendments, since any repeal of that

legislation were to take place, because that Insurance Act, if my memory serves me

right, is 1980. So, there is much to be done in terms of modernizing. You take the

Financial Institutions Act, 1993, updated in 2008. You take the Securities Act, 1995,

updated in 2012. You are taking, as part of the trilogy, the insurance legislation, 1990,

being updated, one can only surmise, and it is up to the Minister of Finance and

the Economy, sometime in 2014. These are the three major pieces of legislation.

578

Securities (Amdt.) Bill, 2013 Tuesday, March 11, 2014 [SEN. RAMKHELAWAN]

They are all very complicated pieces of legislation, and I choose today, as I

start to lay the infrastructure for the understanding of our citizens, to spend the

most time with regard to the Securities (Amdt.) Bill, but I will touch to some

extent on what has been laid in this Senate, the Insurance Bill, and what comes

out of the Financial Institutions Act, which was passed in 2008 but touches very

directly on these pieces of legislation.

Now, let me at this point declare my interest in these matters, first, as

Chairman of the Trinidad and Tobago Stock Exchange which is a self-regulatory

organization under the ambit of the Trinidad and Tobago Securities and Exchange

Commission, which is the regulatory oversight authority under the Securities Act,

2012; also, as managing director of a particular securities institution, broker-

dealer, investment adviser and underwriter. So, I do have some level of

experience, Mr. President, in having something of a very close to 360-degree

viewpoint of what this piece of legislation means for the industry, and how it fits

into the overall frame of things in terms of other pieces of legislation.

What are we seeking to achieve from a policy perspective and how does that

translate into the clauses that we need to put in to make this piece of legislation

work even better? Well, it is, I think, something of consensus that we, as a nation,

are seeking to build a regional capital market. If you are seeking to build a

regional capital market, there must be arrangements in place in terms of the

infrastructure for flows into the country via portfolio, and for flows out of the

country in terms of that traffic. So, two-way traffic: inbound, investors wanting to

come and invest portfolio investment in Trinidad, not foreign direct investment.

They want to buy shares, they want to buy bonds, they might want to use here as a

conduit to raise money, not necessarily money coming from Trinidad and Tobago,

but money coming through Trinidad and Tobago to those areas—important aspect

for a regional capital market.

Then, we have stifled to some extent and suffered many of our citizens by not

creating, as quickly as we should, the infrastructure to allow our average citizen to be

able to invest in many parts of the world. By that, I mean that you have a holder of

funds in Trinidad and Tobago holding US dollars but only being able to benefit from

local banking rates of a quarter of 1 per cent, while there is out there, in terms of the

same, or even better, levels of creditworthiness. You have the ability, if you chose to go

out longer, to get better rates of return. It is important for any policymaker, for any

government, that is clear in its mind and claims that it does not have any foreign

exchange issues, to be able to build infrastructure that will allow that two-way traffic. It

is not good enough, it is not sufficient, to allow for traffic to come into Trinidad and

579


Tobago, but not to allow your own citizens to have the opportunity to invest anywhere

in the world as they wish to do. I will make this point and I will reinforce the point that

I have made before.

Sen. Ramlogan SC: Well said, well said!

Sen. S. Ramkhelawan: My colleague, the Attorney General, agrees with me and

this is probably the first or second time he has done that, so I have to recognize him.

Now, I think it is critically important that we do not make our citizens feel—the

ordinary citizen I am speaking about—feel that he or she is living in a fishbowl and the

only opportunity he or she has to invest in a portfolio is in Trinidad and Tobago. That is

not acceptable if we are building a modern economy and a modern capital market, and

if it is not acceptable, we need to build that infrastructure. It is to the credit of the

current Minister of Finance and the Economy that he is looking along those lines, and I

actually do congratulate him. [Desk thumping] Now, he has talked the talk and, of

course, we are going to push him to walk the walk.

4.15 p.m.

The ordinary citizen is not sure how he is going to be able to invest outside

and therefore we have to help that ordinary citizen because gone are the days

when we say yes we need to conserve foreign exchange. When an ordinary

citizen, who already has his US dollars in the local banking system, invests

outside, you do not lose any foreign exchange. That is lesson one. That foreign

exchange stays with you. It stays in the hands of your investor, whether it is

placed here in the local bank or outside.

Point number two, when you give a trader foreign exchange and he is a trader

in shoes, he buys shoes. He goes to the Central Bank and says okay, well I am a local

trader; I need money to buy shoes. So he takes so much of hard currency, buys shoes

abroad; pays for them in hard currency—US dollars. He comes back and sells those

shoes; he receives Trinidad and Tobago dollars because he is selling into the local

market. He goes back to the Central Bank: I have Trinidad and Tobago dollars and I

need hard currency to do that.

So it is, in a sense a cycle, some might argue, a vicious cycle, where what is

happening is that foreign exchange is being drawn out of the system for the supply of

needed goods, but the investor portfolio is quite different. He takes his US dollars, he

invests them outside, he gets a return, whether it is by dividend, or income on bonds,

and that stays with him in US dollars—very significant difference in terms of the

philosophy.

580


We need to encourage our investors to go out there and find good investments.

That is the moral of the story, Mr. President. We need to encourage them to see

the world in a more open way. Now, that does not mean, as Sen. Henry would

have mentioned, if you were out there in 2008 you would feel the brunt of being

out there. But just last week we had the great lesson, that you cannot “play mas

and fraid powder”. You have to be out there. You have to take risks in order to get

return and there are people who are willing to take the risk to get return but they

do not have the infrastructure. They cannot go out there. They do not have the

facilitators to do that.

And this piece of legislation, in part, will help to do some of those things that

we wanted to do and will help to encourage the ordinary investor to do that, which

is not necessarily for the very sophisticated high net worth individuals because

they know how to do it already. I wanted to speak to this point because I think it

is elemental and it is critical for us, as a nation, building the sophistication of our

citizenry to not feel that they are in some fishbowl where they must only invest in

Trinidad and Tobago.

The sophistication of a nation is actually judged by where the citizens invest.

The quality of the capital markets in which we operate is judged by where our

citizens invest. And very often we have had a trunk line of foreign direct

investment only into this country but not a trunk line of portfolio investment

heading out of the country. That is one of the points that I want to make.

The second point is the question of risk. One was investment on return, the

second point is a question of risk and related to risk are the two notions of capital

adequacy and liquidity. Let me deal with capital adequacy. And I go back to the

trilogy of legislation that are important for the infrastructure—financial

infrastructure of this country.

In the Financial Institutions Act, 2008, there is clear and specific provision in

the main body of the legislation that any person wishing to engage in the business

of banking or the business of a financial nature is required to have minimum—

minimum capital of $15 million. And the legislation also makes provision for

appropriate levels of capital, as the size of a business—of a financial business—as

the size of its assets grows.

So, as the size of the asset grows to a billion, to two billions, et cetera, et

cetera, the requirement for capital is measured—and it is set out in the regulations

of the Financial Institutions Act what that mix would be. Generally, the frame is

that for every—you can have assets of $8 for every $1 of capital. Sorry, you can

581


have—it is an eight to one relationship. The point is that you must have minimum

capital for risk that you take on your balance sheet as a principal, and your capital

must grow in terms of the additional risk that you take as your assets grow.

In the Insurance Bill, which has been placed before us, the same reasoning

takes place. In the 1980 Act there was provision for, I believe, $3 million in

minimum capital and there was no provision for the requirement of higher capital

levels relative to the asset risk that that institution or insurance institutions were

taking. And of course that led, in part, to the debacle that was Clico and that led to

the undercapitalization of a number of the small insurance companies, so that on

paper they may actually be able to write insurance but they are unable to pay

insurance. And that is one of the things that, I believe, we in the Senate are setting

out to do, to ensure that apart from minimum capital, there is adequate capital to

pay relative to the size of an organization’s or an institution’s book—an insurance

institution.

So, in the insurance legislation, Mr. President, in the Bill, the minimum

capital now is $15 million. Once you are acting as principal; once you are taking

on balance sheet risk, the minimum capital is $15 million. Come to the Securities

Act, 2012 and the Securities (Amdt.) Bill, 2013 and we have a situation where no

real provision has been made for minimum capital in terms of these entities acting

as principal. Let me get it clear—the Attorney General is here and I am sure he

will correct me as we go along.

In the case of these players—authorized players—broker-dealers, their

minimum capital requirement for agency functions, as opposed to principal, hon.

Attorney General, is $6 million. I have no argument with that, as long as you are

undertaking agency arrangements, by all means if you wish to put $6 million, that

is fine. But you want to play with the big boys, on the one hand but, on the other

hand, “yuh doh want to put up yuh money”. There is something inconsistent with

that. You want to play with citizens’ money but you “doh” want to put up your

own money to ensure that the citizens are properly paid and covered.

And so I want to make a very strong case. And the strong case is before this

piece of legislation, this draft legislation is passed, that we put into it that the

minimum capital will be $15 million, in the body of the legislation, for persons

who are broker-dealers, investment advisers or underwriters, in accordance with

the Securities Act, 2012. They must have minimum capital of $15 million if they

are doing business of a financial nature. And I come back to the trilogy because I

think it is very important to make it clear what I am saying.

582


In the 2012 Act, in Part 2 of the Third Schedule, provision—this is—sorry,

this is the Financial Institutions Act, 2008 I am speaking to, Mr. President. In the

Financial Institutions Act, 2008, certain exemptions have been given to players

under the Securities Act, 2012. And these are that they can undertake certain

business of a financial nature, first being the business of repurchase agreements.

Now repurchase agreements really are about raising money—this is a company—

broker-dealers acting as principals. They own assets. So they own $100 million.

They have $100 million in bonds and so on. And they want to raise financing

against those assets.

Simple transaction—so they raise financing against those assets. They

actually—in our system they are borrowing to finance those assets that they hold.

These are repurchase agreements in the form that we know it in Trinidad and

Tobago. That is the first area in terms of doing business of a financial nature,

where you are taking funding to acquire certain financial assets in the security

space.

The second area which is another exemption for securities for broker-dealers

and the like to undertake business of a financial nature without falling afoul of the

Financial Institutions Act, lending and borrowing against securities—meaning—

this is the other side of the equation now—if such a firm was to lend anyone, any

person, against the securities that those persons hold—in the normal scheme of

things you might know of it as margining in other jurisdictions, Mr. President, but

if you were to lend against these securities as defined in the Securities Act, 2012,

then you are exempt from the question of doing business of a financial nature

under the Financial Institutions Act.

But these are all areas which, I repeat, make these firms act as principals, not

as agents. We are not selling for Mr. X or buying for Mr. X. We are actually

taking risks on our books and once you are doing that business, there is a

necessity for you to have capital. So what is good for the goose must also be good

for the gander.

If insurance companies take on certain amounts of risks, the first position is

that they must have a minimum of $15 million in capital to take risks on their

books, as principals. If banks and non-financial institutions take that same level of

risks, the first position is they must have $15 million, minimum, in capital, in

order to engage in that business. Why is it going to be different for securities

companies if they are part of the trilogy?

583


So I make the case again, I make the case to the hon. Minister, let us not leave

this to the by-laws for some subsidiary institution to determine. Let the Senate

make that decision. Let the Senate, the lawmakers, insist that as a starting

position, if you want to take on the risk of a principal in our financial jurisdiction,

the minimum capital must be $15 million.

I am going to come back to that, hon. Minister of Finance and the Economy,

because it is one area that I feel very strongly that we should not allow to be

swept under the carpet because we do so at our own peril.

I come back now to some of the other areas—[Interruption]

Mr. President: Senator, I do not know if perhaps you consider this an

appropriate time to suspend before you go on to another point. It is up to you. You

decide. Hon. Senators, it is now 04:29:40, and I propose that we take the tea break

at this time and resume at 5.00 p.m. This Senate now stands suspended until 5.00

p.m.

4.30 p.m.: Sitting suspended.

5.00 p.m.: Sitting resumed.

CONDOLENCES

(MRS. CORINNE BAPTISTE-MC KNIGHT)

Mr. President: Hon. Senators, I propose now to make an opportunity to pay

tribute to former Senator Corinne Baptiste-Mc Knight who recently passed away.

Leader of Government Business?

The Minister of Justice (Sen. The Hon. Emmanuel Gorge): Thank you

very much, Mr. President. Sen. Bhoe Tewarie will speak on behalf of the

Government Senators.

The Minister of Planning and Sustainable Development (Sen. The Hon.

Dr. Bhoendradatt Tewarie): Thank you very much, Mr. President.

Mr. President, permit me to express, on behalf of the Government of Trinidad

and Tobago, our deepest sympathies on the passing of former Independent

Senator, Mrs. Corinne Baptiste-Mc Knight.

Her strength as a woman, as well as a debater, within these parliamentary

chambers was often tested, but Mrs. Corinne Baptiste-Mc Knight, hon. Senator,

always came through with flying colours. She had a prolonged battle with colon

cancer which came to an end at 6.00 a.m. on March 07, 2014 at the age of 73. We

584

Condolences Tuesday, March 11, 2014 [SEN. THE HON. DR. B. TEWARIE]

mourn her passing and offer condolences to all her loved ones, but we are well

aware that Senator Mrs. Baptiste-Mc Knight leaves behind a legacy of

accomplishments in both the foreign service and the public service.

After she graduated from the University of the West Indies in Mona, Jamaica

and the London School of Economics and Political Studies, she taught at the

secondary school level for a period of just a year. After her teaching career, she

joined the foreign service in 1963 and during her tenure there she served in

various overseas missions. She was eventually appointed as the Ambassador to

the United States of America, as permanent representative to the Organization of

American States and as Ambassador to Mexico. She served this country very well

then and she served this country very well throughout her long career.

Prior to entering into retirement, Mrs. Baptiste-Mc Knight served as Permanent

Secretary in the Office of the Prime Minister. As a retiree, she still found the zeal to

continue her hard work on the National Commission for UNESCO, on the Board of the

Elections and Boundaries Commission and on the Mediation Board.

She was appointed to the Senate in 2007 as an Independent Senator of the Ninth

Parliament of the Republic of Trinidad and Tobago where she remained until August

2013. Former President, His Excellency George Maxwell Richards, who appointed her

to the Senate described her as a tower of strength when he appointed her. I concur with

this view of His Excellency.

Mr. President, within her time, as an Independent Senator, Mrs. Baptiste-Mc

Knight contributed to several debates; to be exact, she contributed to the debate on

more than 50 bills and on 15 motions. Sen. Mc Knight never slept during a debate, no

matter how late; and no one slept during her contributions. [Desk thumping] She

debated cleverly, provided reasoned arguments and could be pointedly witty. She

contributed and served on a number of parliamentary committees such as the Public

Accounts Committee and the Executive Committee of the Commonwealth

Parliamentary Association. She also chaired one of the departmental joint select

committees with oversight of government ministries, statutory authorities and state

enterprises.

She earned a reputation to be a no-nonsense and straightforward speaker, admired

for her thorough preparation for debates. Her passing occurred one day before

International Women’s Day 2014 which was observed worldwide on Saturday, March

08, 2014. This year’s global theme was Inspiring Change and, certainly, the life and

legacy of Mrs. Corinne Baptiste-Mc Knight serves as a motivational source and as a

good example of women’s advancement.

585

Condolences Tuesday, March 11, 2014

I would like to take this opportunity to call on the young people of our country

to use her life story to inspire change in their own lives. Let her strength, both in

and out of the workplace, motivate those who are young to succeed in their

studies and even in their workplace. Let her patriotic spirit fuel their ability, your

ability, to fly the flag of Trinidad and Tobago high, both at home and abroad.

I remember her during the 50th anniversary celebrations and how many of the

free concerts—most of them held in Port of Spain at NAPA—she attended; and

how happy she always was to see so many people attending what she called free

concerts in Trinidad and Tobago for the Independence celebrations.

Mr. President, Sen. Corinne Baptiste-Mc Knight was truly a woman of

strength; future generations are encouraged to follow in her inspiring footsteps.

With this stated, on behalf of the Leader of Government Business in the

Senate and on behalf of the Government and the people of the Republic of

Trinidad and Tobago, I wish to express our sincerest condolences to her friends

and family. She will be sorely missed in the country at large. May she rest in

peace.

Sen. Faris Al-Rawi: Thank you, Mr. President.

I rise humbled, this evening, not to eulogize Sen. Corinne Avril Elizabeth

Baptiste-Mc Knight, but instead to celebrate her life, in part, by the reflection

which I wish to share with hon. Senators and the nation as a whole.

To say that I was honoured to serve in this Senate with her would be an

understatement of the century. To say that I was humbled by her wit, her wisdom,

her patience and her incredible sense of humor would also be understatements as

well. This country is a darker place without Corinne Avril Elizabeth Baptiste-Mc

Knight.

She served this country and its people with distinction. She filled this Senate,

in the time that I shared with her—and certainly in the Ninth Parliament, in the

time that she served then—with intelligent contributions, with gusto and with

dedication which knew no measure. It was always a very special privilege to

speak before she spoke in the Senate—the arrangement of our Benches being such

as they are, where Government speaks first, Opposition second and Independent

third—because bet your bottom dollar, she would have, if she spoke before me,

removed all content from my debate. She was completely prepared for every bill

and even bills that were thick in the law.

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Condolences Tuesday, March 11, 2014 [SEN. AL-RAWI]

In reflecting upon the very bill that we have this evening in this Parliament,

that is the amendment to the Securities Act, she contributed on December 19,

2012 and in ending her contribution, she had this to say:

“So my plea, in return, Mr. President, is warm up the coffee, let us look at the

amendments and see if we could make this a Bill that would really…”—

work—“and truly protect the investors because my impression is, after

listening—I think more attentively than some of my colleagues on that side—

to what has been going on here, that this Bill is not offering the protection that

it purports to do.”

That was a small snippet into the kind of dedication that she demonstrated

whatever hour of night or day that we sat here doing the people’s work, you can

be sure that she was ready to participate.

Corinne Baptiste-Mc Knight left us far too soon; 73 is after all, for some, the

new 53 and she wore that well. She had a very quick battle with cancer—as it

returned to her having fought and been in remission for years—and she was

admitted to hospital on two occasions, first at the St. Clair medical facility and

secondly at the Westshore medical facility. I got news of her admission to

Westshore a couple of weeks ago and I immediately went to visit her, and lying

there in that bed was someone with all the hallmarks of being in charge. She was

transferred across to the Vitas House for the last couple of weeks that she spent

with us on earth and I am absolutely sure that as many of us that could, visited her.

When you went to the log book that was there at the entrance to Vitas House, I think I

saw probably every name on the Independent Bench there and a whole list of people

going to visit bed 12. I do recall visiting her on bed 12 and I saw the image of, again, a

very much in-control person, very witty and laughing and under the whole difficulties

that she experienced, she managed to always portray her strength. There is one

memory, in particular, that I wish to share with those opposite, in particular.

I do recall telling her of my displeasure that the blanket colour of choice that she

lay on, on that particular afternoon was yellow and she laughed and she said, “Don’t be

so wicked, young man, yellow is a beautiful colour and all of us have part and parcel to

this country” but she was quick on the draw with her humour always.

I wish to say, on behalf of friends, supporters and well-wishers of Corinne Baptiste-

Mc Knight, I wish to say to those who cared for her in particular, a very special thanks

and, in particular, especially to the Vitas House, to the very dedicated persons that

treat all patients admitted there, for free, I wish to say a sincere and heartfelt

thanks.

587


I wish to offer condolences, in particular to Corinne’s relatives, her brothers

and sister, who have always been at her side and whom she has always reflected

upon. I know that our country has lost a very strong daughter, someone who has

distinguished herself in every way possible as a citizen, as a person and as a true good

spirit. I wish to say that I would certainly miss her dearly, but I would more particularly

remember her excellence and hope to achieve, even if it is one-tenth of her patience and

measure in my lifetime.

I thank you, Mr. President.

Sen. Subhas Ramkhelawan: Mr. President, it is with deep sadness that I rise to

pay tribute to a former Senator, the late Corinne Baptiste-Mc Knight.

She was, of course, a member of the Independent Bench and together, we joined

the Senate in December 2007. I was No. 5 on the Bench and she was No. 6 and at

every point in time we moved, Corinne remained next to me on my left side. So, we

spent all time in the Senate, when she was here, we spent all our time together and we

shared a lot of memories in terms of the Senate itself.

5.15 p.m.

One of the great things about Corinne was that she was a lexicon. There was no

word—many of which I did not know of—that I could come up with for which she did

not know the meaning of that word. So I did not really need to look at thesauruses, and

I did not need to trouble the attendants in the Parliament to get for me one of these very

fat dictionaries, I always refered to Corinne, and it was very clear to me what the

meaning of that word was. And so, it was often that Sen. George had to be corrected

that “hubris” and “hibris” meant actually the same thing and other words, of course, but

that was the measure of Corinne that she understood these things. She had a very, very,

wide vocabulary.

And beyond this, matters with regard to diplomacy and matters with regard to

international relations, you could not ask for a better companion on your left side to be

able to give you advice. That was the measure of Corinne, having served all across the

world in our most important, shall I say, embassies, and she had that breadth of

understanding. So in her, we have missed someone or we will miss someone with that

kind of knowledge base and, indeed, wisdom, and we will sorely miss that, not only in

the Senate as she had already departed the Senate, but in the country Trinidad and

Tobago.

But beyond this she was, to me, an exceptionally committed servant of Trinidad

and Tobago. At a time when there was no need for her to continue to serve, she did; at

a time when there were some who believed that the role of an Independent

588

Condolences Tuesday, March 11, 2014 [SEN. RAMKHELAWAN]

Senator was not necessarily to take any particular position, she did; and she made

her position very, very clear in a very feisty way. So that she was one of the

gladiators on the Independent Bench, and no one could miss that, certainly those

on the Government Benches would never miss that. I say this in terms of the

Government Benches because we served in the 2007 Parliament, and when the

change took place and there was another administration in government, it was the

same kind of responsiveness and sharpness that Corinne provided in this Senate,

so we will miss her.

And on behalf of the Independent Bench, I want to extend my deepest

condolences to her family and to her friends and to all of those who were close to

her even at the time of coming close to the end. As Sen. Al-Rawi said, she

remained feisty and she remained very, very clear and cogent. And so, to Corinne,

wherever you are, we wish you God speed and may you rest in peace. I thank you,

Mr. President.

Mr. President: Hon. Senators, I wish to join with the Senators who preceded

me in paying tribute to former Senator, Corinne Baptiste-Mc Knight. One can

easily say that Sen. Mc Knight did yeoman service for this country and, therefore,

was someone that we in this country need to emulate, and would be better for

having emulated the likes of Sen. Corinne Baptiste-Mc Knight.

Her sterling contributions in the Senate and her contributions as a chairperson

of many committees meant that the service that we received here in the Senate

from her will stand as part of her legacy, and no doubt her abilities as a Senator

were bolstered by the fact that she had diplomatic experience and experience as a

public servant, and she brought those things to bear with her attention to the

details, knowing that the devil is in the details. There is nobody like Senator

Baptiste-Mc Knight who could get down into the details and bring it in a way

forward to us to ensure that we got it right, and so we have a lot to be thankful for

former Sen. Corinne Baptiste-Mc Knight.

Perhaps what is less known about Sen. Baptiste-Mc Knight is that she was not

simply a Senator, a diplomat, a career public servant, but she was also an

electrician and a plumber. [Laughter] Sen. Baptiste-Mc Knight fondly told me of

the times when in her advanced years, she decided that she needed to know about

what it takes to deal with her own electrical problems and, therefore, she pursued

courses at the John S. Donaldson Technical Institute and qualified as an

electrician. So that it is a whole sphere of influence that she had as part of here

background that she brought to bear.

589


So she was a woman of many parts. She was a person who had lots of experiences

and, certainly, as mentioned, to be with Corinne Baptiste-Mc Knight was a moment of

joy. I spent a lot of time, not too long ago—last year, she was at the Inter-Parliamentary

Union Conference with us in Curacao, and that meant that beyond the carrying out of

our duties, we had moments to socialize and you learnt something about the person, the

individual and, therefore, she was a woman of sterling qualities who demonstrated she

not only had gladiatorial capabilities that she demonstrated in the Senate, but she had a

heart of gold. And so to Sen. Baptiste-Mc Knight, we wish that she may rest in peace,

but we also wish to extend to her family and friends the good wishes of this Senate,

which I will ask the Clerk to write to her family and friends, making known our

condolences and the tributes paid to her in this Senate.

We would like now to stand for a minute of silence in honour of Sen. Baptiste-Mc

Knight.

The Senate stood.


Mr. President: Hon. Senators, before we took the tea break, Sen. Ramkhelawan

was on his legs, and by my calculations he has another 16 minutes of original speaking

time. Sen. Ramkhelawan. [Desk thumping]

Sen. S. Ramkhelawan: Thank you, Mr. President. Before we left for tea, I had

made a couple points, one with regard to the question of Trinidad and Tobago’s role in

its establishment as a regional capital market; the setting out of the infrastructure for our

citizens to be able to invest abroad while, at the same time, having external investors

invest internally in Trinidad and Tobago.

We spoke also about the question of the minimum capital that ought to be applied

across the three major pieces of financial legislation: insurance, banks and non-banks

and, in addition to them, broker-dealers and other players under the Securities Act,

2012 in their capacity as principal, and I was moving to the question, and had gone

beyond the question of capital adequacy, and I wanted to speak to a matter that the hon.

Minister of Finance and the Economy raised, which was from a policy perspective, the

question of a single regulator, and how that fits into the trilogy of major pieces of

financial legislation, and what may be necessary to do in this Securities (Amdt.) Bill to

ensure that the matter of a single regulator is, indeed, promoted.

The first question really is: should we have a single regulator? And the hon.

Minister of Finance and the Economy, in his budget submission, the national budget

submission, made the case that we should fully consider this question before we

590


move forward. Should we have a single regulator rather than fragmented

regulators? And the answer to me is yes. It is yes because what you do not wish to

have is a situation where participants—financial players and providers in the

market—can easily slip away from the oversight of regulatory authorities by dint

only of the fact that “we are not regulated”—“we” meaning the financial

provider—by you the Central Bank, so why are you coming to ask us any

questions”, or “we are not regulated by you the SEC, we are regulated by the

Central Bank, so why are you coming to ask us any questions.”

And so, that was the modus operandi which allowed some of our players to be

able to escape the overarching authority as it was then; the rather segmented

authorities of different regulators. So I am a strong supporter of the notion of a

single regulator. I am also a strong supporter that the single regulator really

should be embedded in the Central Bank, very much in line with what is

happening or what has happened in Singapore, in the Cayman Islands, and already

taking place in terms of the Republic of Ireland.

We have heard here today—Sen. Dr. Henry raised the point—that the SEC has

become something of a turnstile. The hon. Minister would have mentioned that that is

being taken care of, but having a CEO, a newly installed CEO—and, by the way, that

position of CEO was vacant for more than two years. When I say vacant—if my

memory serves me right—you had actors, but you had no permanent CEO at the SEC for

a very long time. Part of it is quite true; part of it might be because of the question of

the financial support that ought to be there.

Well, I do not think you have any of those problems with a Central Bank because

in our jurisdiction, the Central Bank remits only the surplus profits that it would make

into the Consolidated Fund. It does not go cap in hand to the Government to say, “I

need money to run the business of the Central Bank.” I think it is best placed there, and

I want to encourage the Minister to push ahead in establishing a single regulator; one,

so that there will be no need to have to put into law necessarily the sharing of

information. If you have one regulator, the information is already in one pool, and if

you have information in one pool, financial providers who may be miscreant in some

form or the other cannot escape the long reach of that single regulator while they may

be able to escape the reach of segmented, fragmented regulators

5.30 p.m.

The question is, well, what is the extent of legislative changes that may be required

to achieve this goal? To me the answer is that, as applies in the gold standard of the

Singapore system, you really need to change commission to the delegated

591


authority which could then be the Central Bank in the legislation. In all of this

legislation there is an entire part which speaks to the commission and much of

that can be easily adjusted to rather than commission, to the deemed authority,

and that deemed authority could be the Central Bank.

So I support the idea because I think that it is very important given our recent

experience, given the damage that has been done to our economy by the failure of

one of the largest financial insurance companies; that it is important—that we

cannot afford to have a second debacle like this for the next ten years. If you do

not want to have a debacle, the first line of defence is proper oversight and

regulation, and then from there the question of enforcement needs to kick in. Very

often we create laws. We have seen it happen. We in the Senate create and make

good laws, and then the challenge is enforcement of those laws. That is where the

major chasm, the lacuna lies. It lies in the enforcement, but if you do not have

laws and you do not have enforcement, you really have two big holes in terms of

the system.

So single regulator, yes, and I support the notion, and I will come back now to

this trilogy of legislation. I support the notion of consolidated supervision—

meaning that the regulator must have the power to look at the institution that is

being supervised, and any subsidiary of that institution, any affiliate of that

institution on its own, rather than having to seek to get that information from

some other place or some other authority.

Now, Mr. President, that is already embedded. The notion of consolidated

supervision is already embedded in the Financial Institutions Act, and it is already

drafted in the Insurance Bill, but it is the particular clauses that are nowhere to be

seen in the securities legislation. I can tell you a part of the reason for that. Part of

the reason for that is that it was anticipated that banking groups may have

insurance companies as subsidiaries, that banking groups may have broker-dealers

as subsidiaries.

It was anticipated that insurance companies may have banks as subsidiaries

and have broker-dealers as subsidiaries, but nobody countenanced in terms of

drafters of regulation and legislation in this country, that one day these small

broker-dealers, embryonic in their development, could and would want to have as

their subsidiaries a bank or an insurance company. And it is a lacuna in the

thinking, because if you do not have that, you then will not be able to close the

loop in terms of consolidated supervision for broker-dealers.

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It is the same challenge in the thinking that applies to a broker-dealer acting as

a principal, not having the same minimum capital requirements as an insurance

company and as a bank, and not having the same capital adequacy type of rules as

an insurance company or a bank. We need to correct that, because what has

happened in terms of international practice all across the world is that you have

these broker-dealers, these securities companies owning banks and owning

insurance companies. Some of the largest groups in the world would be seen as

securities companies.

So I think at this point in time when we are modernizing legislation, we

cannot allow this particular matter to slip. The point: consolidated supervision for

banks, as is already in place, and non-banks, consolidated supervision for

insurance companies, as is already in the draft legislation that is being considered,

and to put in for those securities companies or those broker-dealers who may be

parent of a bank or an insurance company, the same level of consolidated

supervision. So anything that is owned by them, whether it is part of a financial

grouping or part of non-financial activities, the regulator must have the capacity

and the authority to look down, look through and look across, and that is an

important part of policy, failing which we are leaving ourselves open some years

down the road when it has gone out of our memory, what happened to us in 2009.

We may lose the ball as far as that is concerned.

So that is the matter of consolidated supervision that I wanted to bring to the

attention of the hon. Minister. I want to turn to a point made by Sen. Henry, with regard

to brokerage accounts versus custodial accounts. Sen. Henry made the point that we

should be encouraging custodial accounts rather than brokerage accounts that exist

today because it creates a danger for large holders of assets, and I believe he mentioned

the NIB, because they were in danger or some form of danger in his own mind that the

assets were being held by a brokerage company.

I want to, with the greatest of respect, correct Sen. Henry, because within the frame

of the Trinidad and Tobago Stock Exchange, of which I have the honour to be

Chairman, there is a subsidiary called the Trinidad and Tobago Central Depository

which provides a certain sort of custodial oversight, and large institutions have the

capacity to go and set up their own accounts where they control all of their own assets.

When any asset has to be sold it comes out of the institutional account under the control

of that institution to go into a brokerage account for trading.

So I do not think that Sen. Henry ought to be too concerned about that, and I am

sure he will be grateful for the correction and the elucidation that has been provided to

him this afternoon. [Laughter] And, certainly, if he needs more of that, my not

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being an expert on the matter, I will be happy to refer him to those who are.

[Interruption] But there is no danger of that. Yes, we will need to move to a next

level of international best practice with regard to separating brokerage and

custodial type accounts in the retail sector, but in the institutional sector you can

actually establish your own account and ring fence and control your own accounts

once you choose to so do.

I want to turn now to some of the matters raised by the Minister of Finance

and the Economy, just a few of them, just a few, and the Minister of Finance and

the Economy raised the role of foreign registrants, approved foreign issuers.

Foreign registrants—he raised the matter in the original Act, the Securities Act,

2012—are able to register in Trinidad and Tobago for a period of 30 days. He

wants to bring to this honourable Senate an extension of the period of registration

in any one year from 30 days to 90 days. There are two aspects I would like—

[Interruption]

Mr. President: Senator, before you go further—the speaking time of the hon.

Sen. Ramkhelawan has expired.

Motion made: That the hon. Senator’s speaking time be extended by 15

minutes. [Hon. E. George]


Mr. President: Sen. Ramkhelawan. [Desk thumping]

Sen. S. Ramkhelawan: Thank you. Thank you to my colleagues. I wanted to

really raise two points. The first is that no broker-dealer registered in Trinidad and

Tobago can take it upon himself to go to another jurisdiction, in particular the US,

and conduct any business without being registered. I want to know, secondly,

whether there is some reciprocity in terms of moving from 30 days to 90 days,

whether there is some reciprocity in the other jurisdictions.

The hon. Minister would know that now we have in place a memorandum of

understanding with a vast range of designated jurisdictions. We are a signatory—

the Minister mentioned that—so if we are going to allow for registration for 30

days or 90 days as the case may be, I think a prior condition should be that we be

allowed the same access or equivalent access in the jurisdictions which wish to

establish themselves here for the same number of days. That is the only thing that

I will ask, because essentially what we are trying to do is establish a level playing

field in which we position ourselves as a regional capital market. To do that we

must have two things: we must provide access to external players coming in here,

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inbound traffic, but we must also have access to our providers going out there,

and if that condition is not properly satisfied then I would have some level of

objection to this being one-way traffic. Let us not get caught in the trap.

I know that the Minister has listened to a number of people, but now he is here

to listen to his fellow parliamentarians because it is about getting the right mix

and the right balance. So I am sure he has been very well lobbied because he has

insisted that he has listened to everybody. It is now time to listen to your fellow

Senators to make sure that not only the interest of the foreign players are satisfied,

but the interest of the local players are satisfied, that the protection of the investor

is satisfied. [Desk thumping] All of these factors must be meshed properly, and

once we get that right we are going to have a piece of legislation that we can pass

very easily, very quickly, all 68 clauses, plus the amendments that the Minister

may want to bring at a later stage.

So I am not against it, I am for it, but I am for it on the basis of reciprocity and

the establishment of a level playing field which we have the framework already to

put in place. There is no need for us to get agitated. There is no need for us to get

lopsided in our thinking. Let us get a balanced approach to going forward as far as

that is concerned.

The Minister spoke to the question of a new Green Paper, and I was fortunate

many years ago, having been in this business for some 30 years, I was fortunate to

be summoned to join the committee that established that first Green Paper on the

financial services sector, and this was circa 2002. Part of the unrolling or the

reconstruction of the sector included what we are talking about today, Mr.

President, the new legislation for financial institutions, banks and non-banks,

insurance, securities, changes to credit union legislation, all of these things, and

now as we go forward we still have to get in place the credit union legislation. We

still have to get in place amendments to pension legislation. Those are two

important building blocks in ensuring that the financial system remains cohesive

and is well guarded by the regulators.

5.45 p.m.

But then there are other areas that have to be resolved, and I suppose the new

Green Paper will address a number of these areas, and I have shared that in my

own discussion with the hon. Minister. One, we need to put in place mutual fund

legislation that will treat with mutual funds as companies that have shares that can

be redeemed, and where the tax framework is a level playing field, whether the

legal structure is a Unit Trust or whether it is a mutual fund company.

595


We need to update our venture capital legislation and regulation because, by all

measures, that particular area has failed, and failed somewhat miserably in terms of

being able to attract venture capital. So there is need for some sort of tax

incentivization, I would imagine, just as the Minister is seeking to provide some tax

incentivization for SMEs, small to medium size enterprises, to cause them or to

encourage them or to incentivize them to list on the Trinidad and Tobago Stock

Exchange—all laudable in terms of the initiatives that have to be taken.

So I applaud his thinking in terms of moving towards a Green Paper, and I look

forward to his early establishment of that committee to get that Green Paper going.

The question of limited offering which the hon. Minister raised, which is under

section 4 of the existing legislation—I will just use it as an example, because I do not

want to go into minutia of all the amendments in the 68 clauses that have to be

addressed by us. But I am concerned that if you are going—what this is about, Mr.

President, is there is a particular allowance for what you call “limited offerings” which

are exempt from the necessity of a prospectus. In the business it is called the “35 or

under rule”. What it means is that if there are 35 or less participants in an offering, it

does not require a prospectus, it does not require the same sort of what is called

“receipting” by the SEC, and it can go ahead. The SEC would look at it and, say, “Okay,

you can go ahead; we take note.”

What is being suggested is the expansion, as in the original Act, for which I would

have liked to see some amendments. What is being suggested is that, apart from the

private issue of Government to be put in there—but I would like to see us amend that

piece of legislation, because what it does is create an open-ended addition to the

number of players beyond 35, because it says 35 participants. But that can include in an

issuer, senior officers of the issuer, employees of the issuer, former employees of the

issuer and former senior officers.

Let us take for example any issuer. Most of the large issuers might have

4,000/5,000 employees and may have had 15,000/20,000 former employees probably

alive at this point in time. What the Minister is doing or has done is the Minister has

taken that 35 and under rule and made it 35 and under plus another 12,000 or 13,000,

give or take one or two persons. It just does not make sense. If you have a 35 and under

rule, keep it to a 35 and under rule, and if you want to compromise, just take out former

employees and former senior officers. I think the Minister has been swayed by the

lobby, by the lobbyists, but what you would do is kill the intent of a limited offering,

because when you look at the register you would see potentially 14,035 persons. I do

not think that that was the intent, hon. Minister, and it is something that you may

want to look at as you go on.

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I applaud the move with regard to approved foreign issuers. I think it makes good

sense and it contributes to the question of developing a regional capital market.

Mr. President, there is much more that I would like to say, but I know that the sands

of time are running against me, and that I will make that additional contribution at

committee stage. I believe that a discussion is taking place about the establishment of a

Senate select committee, and I wait to hear from the Leader of Government Business

how this shapes up, because I think it is actually the best way to go. With 68 clauses

and more than 68 amendments, it will not be possible for us to efficiently carry out that

exercise as a whole committee of the Senate.

With these thoughts and ideas, I thank you for giving me the time, Mr. President.

The Minister of Planning and Sustainable Development (Sen. The Hon. Dr.

Bhoendradatt Tewarie): Mr. President, thank you very much.

When we debated the Bill which is being amended here today, it was in a sense a

kind of uncertain time in the Senate in terms of perspectives on the Bill, and there was a

very strong feeling that other things needed to be done with the Bill than had been

done. The Government was in a situation where it was facing a time constraint, in order

to meet international obligations and in order to have this country classified on the A list

of an international registry.

In that situation, the Senate in its wisdom facilitated the passage of the 2012 Bill,

which we are now amending, in order to first of all accommodate the needs of the

country, Trinidad and Tobago, in the international financial system. At the same time,

provisions were made by the Government to come with an amended Bill, and to go

through a process of scrutiny that would allow for a Bill that would give comfort to the

Senate and the Houses of Parliament. The Senate had in fact done the best we could in

terms of the passage of a Bill.

It is in that spirit that we come here today. I remember on that occasion, because of

the nature of the discussion prior to the evolution of debate, at that time I closed my

own contribution by saying:

“So, all these things taken into account...”—and I quote from my recorded

contribution in Hansard of that year—“let us have a reasonable Senate

compromise. Mr. President, through you: one, let us pass the Bill; two, we circulate

all the amendments; and three, we give a commitment that within six months we

come back with the legislation as passed—together with a consideration of the

amendments after due study, and with the regulations as well—to both Houses of

Parliament.”

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That Securities Bill of 2012, which we are amending today,

“An Act to provide protection to investors from unfair, improper or fraudulent

practices; foster fair and efficient securities markets and confidence in the securities

industry in Trinidad and Tobago; to reduce systemic risk, to repeal and replace the

Securities Industry Act, Chap. 83:02 and for other related matters”

was indeed passed in the House of Representatives and then in the Senate here, after the

debate on December 17, 2012, and 19, 2012. Act No. 17 of 2012 was assented to on

December 24, 2012, and proclaimed by the President on December 28, 2012.

The hon. Leader of Government Business, Sen. The Hon. Ganga Singh, gave a

formal commitment in the Senate to bring back to the Senate within six months, and to

revisit the relevant bye-laws and amendments as appropriate, from the date of

proclamation, and in addition gave a further undertaking that he would provide the

honourable Senate with an update of the progress of the matters mentioned before, within

three months of proclamation.

The hon. President of the Senate also stated on that occasion, that comments made as

reported in the Hansard would be circulated with a reminder that Members of the Senate

are entitled to submit for consideration by the Government further amendments, therefore

suggesting that the Bill could be later amended, and we went through the process as we

committed.

Sen. Ramkhelawan in his contribution in a way rapped us on the knuckles for being

later than six months, and that is reasonable, but I think he knows, as well as all hon.

Senators know, that it was not from ill-intent, that we had every intention of meeting our

commitment. We made a report at the end of three months, that is to say the Leader of

Government Business in the House did that in March, and then we had a report by the Hon.

Minister of Finance and the Economy in June, when in fact we were due to amend the Bill,

and since then the work had gone on in the background to get us to this particular stage.

There are many things that can be said about this Bill, the fact that we are amending

today and the fact that the hon. Minister of Finance and the Economy I think his disposition

is, in fact, to have the committee do its work in a way that would satisfy the Senate. Having

said that, I think my approach in the debate today will be a little different, in the sense that I

am not here to defend any existing amendment attached to the 2012 Bill, in this 2013

version.

The position I am going to take in a context in which as a Senate we are trying to

address the Bill, is to take into account some of the comments that have been made by hon.

Senators and to identify some of the clauses in the Bill, which really make a substantial

difference and really take into account some of the issues that were raised during the

course of the debate of the 2012 Bill.

598

Securities (Amdt.) Bill, 2013 Tuesday, March 11, 2014 [SEN. THE HON. DR. B. TEWARIE]

In that Bill I remember saying that a lot depends on where you are coming

from in the debate on the Bill.

6.00 p.m.

If you were sitting on the board of a financial institution, you would come to the

Bill with a certain disposition. If you were a consumer, a citizen in search of services

and wanted the protection for the services that you bought, you would look at the Bill

in a different way. In fact, if you were a major player, a financial house, so to speak,

offering securities to the citizens and playing, you would have a different perspective. I

also said that there were two ways that one could address the business of legislation for

the financial sector in a context in which we have known significant global crisis in the

financial sector. You could take a very strong approach and say that, given what had

happened in the financial sector, including in our own country within recent times, one

had to take a very strong conservative approach to the management of the financial

system, and, as a consequence, you had to have very strong laws for the business of

governance and management of the system.

But I also indicated that there was another way of looking at things, which is that

one had the view that in a democratic society that if you had to err on the side of being

either draconian or being more lenient, the democratic tendency was to take into

account the draconian measure but retreat from it and take an approach that was much

more in keeping with democratic tradition and the rights of individuals in a legal

system. And all of these things were explored during that occasion, and I think it is

important to bear them in mind as we go forward, because the amendments, no doubt,

will take into account those kinds of issues as we go forward with the Bill.

But I do want to take this opportunity to compliment Sen. Ramkhelawan on his

contribution here today, because he made the contribution of a person who, as he

claims may not be an expert in the conventional sense of an expert, but he really is a

knowledgeable practitioner in the field. And he used the experience of being a

practitioner and at the same time being a spectator in relation to what had transpired in

the world system over many years and in Trinidad and Tobago and the region over the

last several years, to bring some really important insight to his contribution. He said

many things and I would not say all of them, but I will mention seven things that he

said that were very important.

The first thing is that he talked about the financial legislation trilogy. He talked

about the securities amendment, the Insurance Bill and the Financial Institutions Act,

and he talked about the extent to which these things interplayed with each other,

interconnected with each other and formed, in a sense, a legislative framework

599


within which the issues in the financial sector and the institutions of the financial

sector had to be regarded. And I think that there is a lot of merit in that and I think

it is something we also need to bear in mind as we go forward with this particular

piece of legislation.

He said that we need to encourage investors to invest outside, and he saw that as

signs of a sophisticated economy, and that was very different from the position of Sen.

Dr. Lester Henry, who said that the sophistication can sometimes come back to hurt

you and to haunt you. And there is truth in both positions, because we have seen it. In

an interconnected financial system, when something happens in one place it inevitably

connects and impacts on another, and that is Sen. Dr. Henry’s point of view. But Sen.

Ramkhelawan pointed out that you do not want your country in an interconnected and

global economy to be a fishbowl, and you do not want your investors to be inward

looking, and you do not want your development strategy to be inward looking only.

And I think there is a lot of merit in taking into account the fact that when you legislate,

you need to take into account, in designing your own financial system, the fact that in a

context of individual freedom, in an interconnected global economy you want to have

your citizens have the capacity to invest in the global reality that is the financial sector

today.

The third thing that he said and this is also very important. He raised the

question of capital adequacy. And I must say that all my sentiments are with him

on this, which is that the days of taking the view that the way to riches is with

other people’s money should be left behind. After all that we have now learnt

over a hundred years of financial arrangements in the world system, and

especially over the last 20 years or so in the financial system, and I mentioned 20

or 30 years, because when the hon. Minister of Finance and the Economy spoke,

he mentioned the Asian crisis, he mentioned the Argentinian crisis, he mentioned

the Mexican crisis.

There was a time when all of those issues were regarded as regional crises. It

is only when the regional crisis came to the United States and came to Europe that

that became a global crisis. And I think it is important—and the Minister of

Finance and the Economy mentioned those—to understand that the crises that he

alluded to evolving over 20 years or so, 25 years or so, in various countries and

ultimately culminating in 2008 and 2009 in the global financial crisis, is that those

were crises that were created both by Government in the first instance, like in the

Mexican crisis, and there were crises that were created by the private sector as

indeed, the global crisis was in the United States and Europe and indeed, in some

of the countries in Asia during the Asia crisis.

600


So, the Argentinian crisis was a Government crisis. But the Asian crisis was a

private sector crisis, and the global financial crisis was a major private sector

crisis and, therefore, what it has also taught us is that when we are dealing with

this business of regulation, it cannot be Government versus private sector, it

cannot be private sector versus Government; it has to be a governance system that

will protect citizens, because at the end of the day in the financial crisis, even if

financial institutions collapse, even if governments collapse, it is the people who

have the savings depleted, it is the people who have the jobs and lose them, it is

the people who have the homes and lose them that ultimately feel the brunt of

what seems like a big crisis in the daily headlines of papers all over the world.

Therefore, we need to take that into account also. The fact that what we are

protecting is a system, but we are protecting a system not for the sake of a system,

we are protecting a system so that our citizens can have peace, they can have

justice, they can have the opportunity for making a livelihood and for investing

and making a living, so to speak, and creating the conditions for their own

economic prosperity and success. So this capital adequacy thing is an important

matter and I think it is something that we should take into account seriously,

because if people are willing to invest their money with you, you should be able

and willing to invest your money in yourself.

The fourth issue that he raised is the issue of a single regulator, and I would

like to link that with something else that he raised which is important. He raised

the single regulator together with the issue of consolidated supervision. And the

issue of the single regulator, he argued, was important because what it did was

that it put a single regulator in a context in which a pool of funds in the system

and the information about this could be known by an entity with oversight for the

whole system. And he raised the issue of consolidated system to say any section

of that system also needed to have similar oversight. So, the interlocking elements

of a sub-entity within the system had to be taken into account in such a way that

you could not look at one without looking at the whole, and therefore, he called

for this integrated kind of oversight system. And I think it is something that merits

consideration and is a serious issue and we need to understand the significance of

that and take it into account as we go to the amendment stage.

He also raised the issue that laws are not enough, that enforcement is key, and

I want to say that Trinidad and Tobago is a constant and living example of it. I do

not want to use examples within my own Ministry, it is not appropriate for this

debate, and I do not want to use examples outside of the financial sector in other

parts of the country, in other aspects of life in the country to make the point, but I

601


think the point is very, very pertinent. It is one thing to have laws, the other thing

is to govern and part of governing is enforcement. Therefore, you cannot have

strong laws with weak systems of governance and weak systems of enforcement,

and I want to take that as a serious point and we need to address it here.

And the final issue that he raised, which is important, is the issue of

reciprocity for foreign registrants, and this is a very important issue. The issue

here is not foreign or local, the issue here is reciprocity. If you have a world

system in which there is world trade and services are also part of world trade and

an important and growing part, and the financial sector is the grease that makes it

possible for the rest of the economic system to go, then the principle of

reciprocity is important. If people can come and trade here in services then our

people should be able to go and trade in other countries in the same way, under

the same terms and conditions, according to the laws of that country, just as when

they come here they must trade on the basis of the laws of our country.

I support that principle. I think it is a matter—and the reason that I raised

these seven issues, and not everything that he raised, is because I feel the seven

issues that he raised can be taken into account—some of them—as we look at the

business of the amendments, at the stage at which we address them, whereas other

things can be taken into account as we address the amendments. We know there is

a reserve; there is a leave in the context of other things that he has raised.

So, I want to commend him on his contribution. I thought it was very much to

the point. There was no politics in his contribution. [Laughter] The closest he got

to politics was when he chastised us for not bringing the Bill here six months

afterwards, but I do not think it was meant with any mean spiritedness, I think he

knew that it was just a matter of getting everything in order to bring it here, and

we have it now, but the reason why I say that there was no politics in it, is not

because there is anything wrong with politics, but because he dedicated his

contribution to raising issues that were very important for dealing with a strong

and well-regulated financial sector and securities sector in the country, and I

commend him for that.

I want to say a bit about the financial system globally. I would not be very

long. But I want to say, we have had all of these crises and we have mentioned

some of them, the hon. Minister of Finance and the Economy mentioned some,

and what we—the world in a sense in a fundamental way continues to be in a state

of uncertainty.

602


I was looking at a story presented by the BBC the other morning, I think. I

cannot remember what morning it was, it might have been a Sunday if it was a

morning. And they were talking about the economy of China and in talking about

the economy of China, of course, it went to the, as I said the grease of the entire

economic system, the management of finance, and the extent—everybody talks

about the extent to which other countries have borrowed from China, but the

significance of this story is the fact that this story was focusing on the extent to

which China had used a loan system internally to leverage the entire double digit

development process that has taken place within the last decade and a half or so in

China.

6.15 p.m.

Secondly, the extent to which the Chinese banking system was connected to

European and other banking systems in the global system and the delicate balance

that is required to keep the global economy at—what can I say?—I do not think

you can use the word “equilibrium” in this instance. I do not think it is a good

word, but in a certain kind of poise I would say, to keep the system going and I

think it is important to remember that.

It is also important to remember that when the global financial crisis came, the

most recent one in 2008, the country that was largely untouched in the world was

Canada and it is important to understand that. The reason why Canada was able to

survive, is because decades before it had taken the decision to basically take a

conservative approach to the management of its financial sector and I think there

are some lessons for us here as well as far as that is concerned.

Therefore, as we look towards addressing our own financial sector and

especially the security system here, the Minister of Finance and the Economy

took the opportunity to point out the growth in this particular sector, the securities

sector, to actually show what had happened over the last several years. I think that

we now must understand that we have something to protect at home, but we need

to protect it in the context of a global system in which one thing happening in one

place can affect another place in the most unpredictable kinds of ways, and I think

it is important to do that as we get to the point of bringing this Bill to completion

and fruition.

I just want to mention a couple of things in the Bill itself. They may have been

mentioned before, but I just want to mention them because I think these parts of

the Bill are important. I think it is important to note that in addition to its

functions, traditional/conventional functions—because this Bill is predated by

603


other Bills which outline those things—the securities commission will also be

responsible for assessing, measuring and evaluating risk exposure in the securities

industry, and risk and the management of risk is one of the biggest issues in the

financial sector and the securities sector. I want to point out as well, that the

commission will have the power to monitor the risk exposure of registrants and

self-regulatory organizations, take measures to protect the interests of investors,

clients, members and the securities industry where necessary. In addition to its

effective role, it has a custodial role in all of this and I think it is important to

understand that as well.

Mr. President: Minister, before you proceed, perhaps I could call on the

Leader of Government Business.

PROCEDURAL MOTION

The Minister of Justice (Sen. The Hon. Emmanuel George): Mr. President,

thank you very much. In accordance with Standing Order 9(8), I beg to move that

this Senate do sit until the conclusion of the business at hand.



Sen. The Hon. Dr. B. Tewarie: Thank you very much, Mr. President. The

third point I want to make that comes directly from the amendments in the Bill, is

that the representative from the Ministry of Finance and the Economy serving on

the commission will be mandated to be a senior officer. So that is actually

designated. So, the Government representation will be at a certain level. The Bill

will mandate that the President, rather than the Minister, appoint another

commissioner to be his deputy chairman. The Minister of Finance and the

Economy alluded to this when he made his presentation, and he said some of the

powers had been taken from him—he said it in a jocular manner—but he does not

mind that. But during the last debate, the issue of the extent to which the

securities commission should be extricated from direct political control was in

fact raised, and I remember that matter was also raised at the committee stage

when the 2012 Bill was being prepared, and therefore, what this means is that the

decision has been taken really to depoliticize any kind of connection. This is

important though because I have to make this point as I have made elsewhere.

One has to assume that the Government of any country and certainly the

Government of Trinidad and Tobago, regardless of who the Government is, acts

with due care and consideration and attention to its responsibilities and

604


obligations for governing the country well, and therefore, you cannot look at a

Minister simply as a political figure. A political process gets a Minister there, but

a Minister once he gets there, cannot be viewed purely in a political light, and this

is regardless of administration. It is important to understand that you cannot look

to a Minister of Finance and the Economy and see him only in a political

dimension.

Having said that, something like the securities commission which governs the

entire system and really should be, in a sense, devoid of any taint whatsoever of

political interference, deserves to have that kind of sense of autonomy, sense of

independence, and I think that that is a positive element in the Bill.

Fifth: All members serving as commissioners must possess degrees or

professional qualifications and have a minimum of five years’ post-graduation

experience in various fields as described in the Act. I think this is also an

important thing because it sets standards for who can be a commissioner.

Sixth: A person or commissioner cannot be appointed or continue as a

commissioner if they are—and then they set down the terms and conditions. I will not

mention if there are registrants who have served as a senior officer of a company which

had been wound up in court or the company was placed in receivership, a senior officer

of a former registrant or self-regulatory organization, and what it does again is try to

protect the system. The process for delisting security will now involve paying a

prescribed fee, the securities exchange, filing with the commissioner a concise

statement of the substance and purpose of the proposal.

Then eighth: Senior officers will be accountable for the actions of their employees

in addition. They will be subject to any penalties listed under the Act. Again, this is

important because it means that responsibility must reside at the top where it should be.

A prescribed fee will now be required—not that important. Time limits for the

transitional provisions and new registration will be increased to two years from one

year. Registrations for persons outlined under 53(1) will be valid for two years, again,

rather than one year so that you do not have the ritual of registration every year.

The Bill now mandates that a substantial shareholder notify the commission in

writing within one month of any change of 5 per cent or more of the total issued capital

of the registrant. I think that is important, so signal flags are raised. Registrants will be

mandated to take into account their clients’ investment experience prior to

recommending trade in security. Again, obligation on the part of the registrant; and

Fourteen: Investigations as well in proceedings involving statements under

oath will be conducted in camera and that is consistent with the Securities

605


Industry Act of 1995. So what it means is that these will be private, but clear

investigations that are not in the public glare.

I mentioned just these and Sen. Ramkhelawan mentioned there are over 81

amendments. I just picked out the meaning of some of the amendments that make

a perceptive difference, a qualitative difference in the strength and purpose of the

Bill, and I think it is important to recognize that what is being attempted here is to

have a governance system and a regulatory system that actually protect the

consumer, strengthen the responsibility of all the participants in the industry and

give regulatory powers and jurisdiction to the securities commission, including

the authority to make an assessment of the risk involved in granting the freedom

of anyone to act in this particular field of endeavour which can involve a fair

amount of risk.

Mr. President, that is as much as I have to say today. I think the debate so far

has been very, very constructive and I am happy to make my contribution to the

Bill. I am sure the hon. Minister of Finance and the Economy will indicate how he

intends to proceed with this and I know that he will proceed in such a manner as

to give the Senate comfort, that at the end of the day this will be a Bill that will be

the best possible Bill that we can create at this point in time for good governance

in the securities industry by the Parliament of Trinidad and Tobago.

I thank you very much. [Desk thumping]

Sen. Shamfa Cudjoe: Thank you, Mr. President, thank you colleagues.

Thank you for the opportunity to make a short contribution in this debate on this

piece of legislation. Now, there are two things that pique my interest here today.

Now, earlier in the debate the Minister of Finance and the Economy, Sen. The

Hon. Howai, mentioned that he launched an investigation into the controversial

FCB matter of which we are all aware where the FCB manager allegedly purchased

$14 million in shares.

Now, Mr. President, this matter was also raised by Sen. Dr. Henry and it

brings to the fore the whole issue of effective enforcement. This is my first

contribution to a securities Bill or any piece of legislation that relates to securities.

I kind of try to stay clear from this because I am not very knowledgeable in the

area, but there was just one area that had me asking many questions and had me

curious, and it is the ability of the commission to actually enforce effectively.

Mr. President, when I speak about effective enforcement, I am referring to the

SEC’s ability to both effect compliance with the current rules and regulations and

its ability to supervise and to inspect, its ability to bring action against a person or

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Securities (Amdt.) Bill, 2013 Tuesday, March 11, 2014 [SEN. CUDJOE]

an entity that would have violated the current rules and regulations. Now, the

mere fact that as the legislation stands today or as our situation stands today, that

a Minister or the Minister has to launch an investigation into this whole FCB

matter, it raises the point or it brings to the fore the whole issue of our—it says

two things. The fact that we have a securities commission that either, one, does

not have the ability or the authority to investigate this matter and to prosecute this

matter successfully; or, two, a securities commission that has some of this power,

some of these powers, or some of this authority, but is somewhat shy of executing

or exercising this power that we have to rely on a Minister to move.

I remember looking at the newspaper reports and the media reports and

wondering, okay, what body is going to protect the interest of the public in this

matter? We waited and waited and then the Minister—I see in today’s newspaper

that the Minister recently had a meeting with the union and he spoke to launching

this investigation, and in his presentation today he mentioned that. But, Mr.

President, this tells us that we have a serious issue. It reflects the weakness of the

enforcement powers of the securities commission and it highlights the weakness

of enforcement powers within the current legislation.

I am glad that there are parts of the legislation that speak towards

improving—some of the amendments speak towards improving the enforcement

powers. But we sort of mentioned enforcement in passing, and I want to highlight

that this whole case has highlighted, not just our weakness, but some kind of

handicap or some disability in the current legislation and the current commission

to exercise, or to execute, an effective supervision and enforcement programme.

6.30 p.m.

Now, Mr. President, as we try to amend this legislation today, there are certain

points I would like to see us place some focus on. Some of the points that I would

like to see us do some work on or improve the commission’s ability, as it relates

to enforcement, treating with the following matters: a comprehensive

investigative power to enter premises, to collect information or to compel

testimony from an individual. Sen. Dr. Tewarie would have just mentioned that. I

would like to see that stated clearly in the legislation. I want to see the

commission being granted the ability to impose administrative sanctions, to

penalize regulated bodies that do not comply with the current rules, and to even

impose disciplinary action in cases that are similar to the FCB scenario or where

anybody, person or entity tries to violate the regulations and so on.

607


So, one important part of ensuring that we execute an effective enforcement

and supervision programme is making sure that the personnel or the security body

has the necessary human resources, technical resources and financial resources to

execute their functions properly. Mr. President, the absence of these resources

would hinder the credibility and effectiveness of the securities commission, and

that is something we do not want to gamble with. Because, at the end of the day, I

do not think our problem is creating, developing or making legislation. We have a

wide range of legislation that treats with issues of this nature, and I think that we

can sit and make laws today, tomorrow, next week, we have the ability to make

good law, but at the end of the day, what is good law without proper

enforcement?

So, we must do whatever is necessary to strengthen the commission’s powers

and bring the commission up to—give it the kind of weight, the kind of power and

the kind of authority that it needs so that it can operate somewhat independently

and proactively rather than having the population sit and wait for these functions

to be executed by a Minister or sometimes the criminal authorities like the police

who sometimes are not well trained in these areas. The securities commission was

established for a specific reason, to treat with these very unique situations, and I

think we must do all within our power to ensure that they have the necessary

resources. Mr. President, we are found wanting in the area of enforcement and I

think it is something that we must treat with properly and that is pretty much my

concern.

I have another final concern, which I hope Sen. Al-Rawi, Sen. Prescott SC or

Sen. Vieira, somebody who has some kind of knowledge as to how the judicial

system works as it relates to cases of this nature, but I want to state on the record

that a supportive judicial system or supportive judicial environment is a pre-

condition to the effectiveness of this legislation and making things happen,

bringing this thing to life. The current position of our Judiciary system speaks to

one that is very slow and kind of relaxed as it relates to bringing people to justice,

and a speedy judicial system or judiciary system that is able to arbitrate these

disputes and impose sanctions in a reasonable manner, and in a timely fashion,

would be very critical to bringing this legislation to life in the way that we would

like to see it operate. So, I would like to see some work done in that regard.

Because, if we shy away from doing that now, we would find ourselves at the

end of the year, or at some time, rushing back to the Parliament trying to fulfil

these mandates for some kind of international body to avoid being blacklisted. We

know what our problems are for the most part. Most of the other speakers would

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Securities (Amdt.) Bill, 2013 Tuesday, March 11, 2014 [SEN. CUDJOE]

have spoken to the whole issue of enforcement so we know what our problems are

so we need to do whatever is necessary to treat with them rather than wait for

some international body to call us to say that we are going to be blacklisted, and

we rush and make some kind of legislation that we are unable to implement.

So, I think we are singing from the same hymn book, or from the same chorus

sheet, and we know what we ought to do. I think you have got the support of the

Opposition and, Mr. President, with those very few words, we support this piece

of legislation and I sincerely thank you. [Desk thumping]

Sen. Helen Drayton: Thank you, Mr. President. I open by thanking the

Minister of Finance and the Economy for bringing these amendments as

promised. In the past, we have had promises which remained and still remain

unfulfilled, so I want to thank you, Sen. Howai, you certainly have set what I

think is a welcomed new standard. [Desk thumping] I also want to commend the

Joint Select Committee for the excellent work done on this Bill. Indeed, it is a

very complex Bill and I thank them for taking into consideration the points I had

raised.

Now, when the Bill was debated in 2012, I thought that it was technically sound on

administration but certainly weak on facilitating good governance. Back then, we had

before us, as we have now, a law that is designed to protect the investor and yet, in

many ways, it fell short of doing just that. I am pleased to say that this amended Bill, I

think it is a vast improvement, although there are still several issues.

But, before I go into those one or two concerns, I want to comment very briefly on

the issue of capitalization raised by Sen. Ramkhelawan and further reinforced by Sen.

Tewarie. Certainly, while I would always be on the side of more capitalization rather

than less, we need to consider the basic structure of the securities market, and what is

most desirable for fulfilling the objective of the Bill, which is protection of the investor

and, of course, industry growth. So, while $15 million minimum capital is

recommended by Sen. Ramkhelawan and certainly with the greatest respect for his

knowledge of the market, we need to ensure that the smaller and viable and strong

players are not driven out of the market leaving it dominated by a few large brokerage

companies that are subsidiaries of banks and large institutions.

I would further drill that down by quoting quickly what I said in my contribution in

December 2012. The matter certainly needs distillation—further distillation—and I am

sure that a select committee will serve that purpose, and more so, because of the

incestuous nature of the securities market. This is what I said and I will read very

quickly:

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“This is a good time as any to suggest once again that serious consideration be

given to the demutualization of the stock exchange, which is the institution at

the core of securities trading. Here we have proposed legislation which is

designed to build confidence in the capital markets and, I would hope, to

develop the market as a consequence…

The board of the stock exchange is made up primarily of whom? They are the

very market players described in the Bill.”—and the large players—“They are

the brokers, they are the issuers, and they are the underwriters. I know there

are three independent members on the…stock exchange. This is so because

historically the stock exchange is a self-regulatory body. However,”—the

belief is—“…consistent with the objective of this Bill, which is to protect

investors, which is to build confidence…These very market players who sit on

the board…are also employees of the large issuers—the banks…”

We have recent situations that we need to be cognizant of as we discuss this Bill,

and also to put on the table for when a select committee meets. Now:

“Demutualization typically opens up the stock exchange to public ownership

and the removal of limits on access to the exchange.

…this statement”—certainly was—“not meant…to question the integrity of

the excellent professionals who sit on the board. The reality is that this is

a…small market with players who account for a substantial part of our

GDP…as a very small and incestuous marketplace—the securities industry is

vulnerable to many uncomplementary nuances and also to manipulation.”

So, as we discuss the matter of capitalization, I would like to put that on the table.

Now, a major issue I have with the amended Bill and I have to admit it is not a

recommendation that I had put forward in my notes to the Joint Select Committee

nor did I mention it in my contribution in December. But certainly, the

Government and Parliament must demonstrate that we have learnt lessons from

the debacle of the financial crash of 2007, and also our own financial disasters of

Clico and HCU. As I mentioned earlier, now we have a recent development that

we need to factor in.

The Securities (Amdt.) Bill should include a whistle-blowing clause and I

have therefore circulated an amendment or I have prepared one to be circulated

and I assume that just now it will be sent around. Basically, what this amendment

states is that an employee of the State, a public authority, the Securities and

Exchange Commission, the Trinidad and Tobago Stock Exchange, a market actor

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Securities (Amdt.) Bill, 2013 Tuesday, March 11, 2014 [SEN. DRAYTON]

or anybody who in good faith has any information, knowledge of any other party

who intends to breach this law, or has breached the law, they would have an

option of bringing it to the attention of the Securities and Exchange Commission

or the Integrity Commission if that person is an employee of the SEC.

Now, I know that it is not a very strong clause in the context of whistle-

blowing but it certainly is a start, and it is a direct replication of what is already in

the Integrity in Public Life Act.

6.45 p.m.

I also want to put that statement in the context of the recent development.

And, Mr. President, I will not dwell on it. I know that an investigation is taking

place with respect to the First Citizens matter but I certainly was struck by

statements made, and I think it is by First Citizens, in the press, that the employee

who had acquired in excess of 500,000 shares had done nothing illegal. I found

the statements surprising and that the bank had not awaited until a full

investigation is completed.

I want to suggest to the bank, I want to suggest to the investigators, that they

reflect on section 6(f) of this very Securities Act, which states the major function

of the SEC is to:

“protect the integrity of the securities market against any abuses arising from

market manipulating practices, insider trading, conflicts of interest, and other

unfair and improper practices;”

So that the potential abuses that struck me had to do with conflict of interest, and

unfair and improper practices. And let me explain why. First, public offer was

oversubscribed and the average person did not have access to the number of

shares they wanted, but the employee was able to acquire half a million shares,

and by any yardstick, there is something that rings unfair about that.

Now, there is another aspect of the matter which worries me because it is

probably outside the remit of the SEC since it involves an employer and an

employee. Let us reflect on the financing. The employee could have had two

sources; either his own sources, which means that he was good for over $12

million; or he was financed by a financial institution. But, in accordance with

bank practices, and I know it is a practice, it is a policy of First Citizens, as indeed

it is with all banks in this country, it is that an employee who intends to borrow

from another financial institution must disclose it to the employer, and the

purposes of which.

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Now, assuming the employee had financing and he had disclosed it to the

employer, for the purpose of acquisition of the shares, what was the responsibility

of the employer regarding the number of shares given the heavy demand by ordinary

citizens? What was the responsibility of First Citizens Bank? Now, another option of

course is that the employee could have purchased on behalf of someone else, in which

case it certainly deepens the issue of the ethical considerations and a possible source of

conflict of interest with respect to the FIA Act.

So, I trust that the Minister of Finance and the Economy, the Commissioners of the

SEC and First Citizens Bank understand that this is not just a matter of an employee

acquiring 500,000 shares and he may not have done anything illegal, but there is a

serious issue of governance. Now, First Citizens is a bank that prides itself on high

ethical standards, a bank’s trade, as the Minister mentioned, is not deposits and loans, it

is not the legal status it has, it is a trade in confidence.

And hence if the bank was aware of the employee’s intention to purchase, given the

heavy demand, what was its moral obligation to the rest of the public and all of its

customers who wanted shares that they could not get and who gives it the real franchise

to operate? Now, we must bear in mind that First Citizens was not only the issuer; it

was First Citizens that allocated the shares. And given the fact that the employee is a

senior risk manager, and therefore a professional who would normally advise its

employer on things like credit and operational risks, the question of ethics is

compounded.

So, for the bank to give the public the impression, before examining the full

implications and the ethical aspect of the transaction, that the employee did nothing

wrong and everything is okay, I was surprised. And further Sen. Dr. Tewarie and Sen.

Ramkhelawan drove home the issue of enforcement of laws. And I have said before,

and I want to submit, yes we must enforce laws but for a bank, in particular, we must

remember the law is a minimum standard. [Desk thumping] The law is a minimum

standard.

There is something called integrity; there is something called ethics. What is

unethical is not necessarily illegal. I have said that before. And a bank trades on

confidence. So I will call on the shareholders to demand an explanation from First

Citizens Bank, in the name of all investors, all of its customers and the public of

Trinidad and Tobago.

Now, I have included the Integrity Commission in this amendment in that any

member of the public can lodge a complaint against any person in public life and any

person who is exercising a public function. Now, this is provided that the

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complaint is based on evidence that supports a breach of offence under the

Integrity in Public Life Act, or Prevention of Corruption Act. The members of the

board of the SEC are persons in public life, they are therefore subject to the

provisions of the Integrity in Public Life Act—although I am not sure that they

are required to file.

In any event, I feel that employees of the Securities and Exchange Commission, if

there is a serious issue and they need to bring it to the attention of someone, I think that

the Integrity Commission provides that avenue. So the whole question of who will

guard the guards?—it is just one other layer. You know I always draw the reference,

bring it down to your own home. You know, if a burglar is casing your home, and the

burglar’s intent is to burglarize your home, and he is casing your home for some time, it

is more than likely at some point in time he will get in. So you do things to make it as

difficult as possible for that burglar to get into your house. So that you might put a

padlock on the gate—certainly, the gate is not sufficiently high that he cannot jump

over, but forcing him to climb over the gate increases the chance that he will be seen;

he will be detected.

So that, the whistle-blowing element, it is just one more and I am mindful that we

need to have laws that balance the need to protect the investor. We must balance the

need to empower the SEC. We must balance the need for friendliness of doing business.

So yes it is a complex law and there is a lot of balancing that we have to do. So one

does not want to make it more complex than it is but I feel that the whistle-blowing

element is important and that follows on one or two other recommendations that I have.

There is one other matter I want to mention, Mr. President, because it goes to

the heart of confidence of the whole financial sector because right in the middle of

the investigation into First Citizens, we read in the Sunday newspaper, if it is true,

that a person who was at the helm of Clico’s brokerage company, an advisor to

Clico, is now advisor to the Governor of the Central Bank. [Desk thumping] Now

this was the same person severed by the Minister of Finance and the Economy

from CMMB when its operations were transferred to First Citizens and now

reincarnates as an advisor to none other than the chief of the Central Bank. I am sure

that the Minister had no hand in this. But in the Governor’s consideration, what was

more important, the expertise of this consultant, or inspiring confidence? [Desk

thumping]

So you see, Mr. President, what we are saying here, we cannot legislate for

everything, but the people who we have put to guard the guards, we expect that they

would exercise judgment and we would expect that they would examine the moral

and ethical implications of their decisions, for which the law simply cannot cover.

613


Let me move on to section 10(7) which allows the President, on advice of the

Minister, to appoint up to three Commissioners for one year. That is fine because

it is understandable, from time to time, the SEC, depending on market

circumstances, it may very well need to bring in other expertise at the level of

governance. That is fine. However, the minimum standards already established by

the law should be maintained and the amended Bill, as it is, does not state that.

So the minimum standards are a degree or professional qualifications and five

years post graduate experience. So anyone you want to bring in ad hoc should

have the minimum standard at the level of governance as already established in

the law. And certainly if you are bringing in anybody at that level, you are

looking for a certain amount of specialist expertise. So specialist by virtue of that

alone implies the person ought to have a certain minimum standard and years of

experience.

The other thing that was very good about the amendments, it said that in

11(3):

“…the Commission may also make all documents or instruments which are

expressly required to be filed…”—it may post that on its website.

But I observed it did not say when. If it is posting it from the point of view of

disclosure, transparency then, and for information to investors, then we should not

leave it open, that it could do so in two years’ time, if it so chooses.

And there is one area which is clause 25 of the Bill that continues to bother

me. It leaves full discretion on the part of the SEC with respect to disclosure of

warnings and reprimands, although many of the offences listed in the particular

section of the law are serious. For instance, failure to maintain capitalization;

conviction for an offence involving fraud; and prosecution by the very SEC for the

breach of the Act.

So, Mr. President, this leads me back to the weaknesses of governance in the

law and the prospect that serious offences by market players could remain

unknown to investors given the incestuous nature of the securities market. So I

have said before, information is the key to investor decision. We cannot make

laws for everything to protect the investor but the one thing that protects an

investor is information—investor beware. So that if a market player is convicted

for fraud and that market player is a broker, I want to know if my broker is

convicted for fraud. That should not be left to the discretion of the SEC. [Desk

thumping]

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That must be specifically stated in law. Now, if you do not want to put all the

offences, some of them are minor and you do not want to have some public notice

against someone who—it is just a minor offence of, you know, oversight in filing

something. But conviction for fraud, not having sufficient funds, breaching the

FIA or breaching the SEC law? The investor has—insider trading—right to know

and that must not be at the discretion of the SEC.

7.00 p.m.

Finally, given what happened—the financial crash, when you think of cases

such as Enron or the failures, the dots-coms, Clico and HCU. Now, clause 30,

section 65 of the law is excellent because it makes reference to the fact that the

auditors must be members of ICATT because professionals, self-regulatory bodies

can sanction individuals.

I want to suggest, we need to explore it. It may or may not be that we cannot

do it, I do not know, but we need to discuss it. As it stands, if an accountant is not

a member of ICATT, there is no self-regulatory body to sanction him for

professional misconduct. I bring that in because if it is a publicly listed company,

then I want to know that, as an investor in a publicly listed company, there are

qualified accountants who operate within a certain code of conduct and I think

there are lessons there with respect to HCU.

With that, Mr. President, I thank you. [Desk thumping]

Sen. Dr. Dhanayshar Mahabir: Thank you very much, Mr. President.

I am grateful for this opportunity to contribute to this particular Bill. This is,

in fact, a very timely Bill and it is really very good of the Government—despite

the delays they have explained the reasons of—to seek to amend the Securities

Act at this particular time, if only because of recent developments and also

because the industry itself is changing at a very fast pace and it is, of course

timely that we should have the amendments which are before us. So, the

Government is to be commended for this.

The securities industry, Mr. President, is a very interesting one because what

we have seen over time is that it has grown in tandem with the growth of the real

economy and this particular type of activity which we have seen escalating in the

last century was, to a large extent, responsible for creating the capital needs of a

number of enterprises in the real economy by providing relatively low-cost

financing through the sale of their equity so that they will be able to finance new

investments as opposed to bank and bond financing.

615


What this meant, Mr. President, is that while there was a dilution of

ownership, the fact is that 50 per cent of $1,000—which is equal to $500—is

greater than 100 per cent of $200. So that many enterprises found it in their

interest, instead of remaining small and relying on debt financing, to sell a portion

of their equity, use the cheap funds to grow their businesses so that despite the

dilution of ownership, the overall wealth of the owners grew and expanded.

So that our type of economy is very much reliant and dependent on a very

well-functioning security industry. One is hard pressed, Mr. President, to find

countries around the world which do not have a stock exchange or a securities

industry. I am speaking about the developing world, Mexico and Brazil, in our

part of the world and in the Far East you have a very thriving exchange in India,

in the Middle East places like Egypt, South Africa and so on. In fact, it might very

well be that there may be just a handful of countries without an active securities

market. There are major benefits to this particular securities market, as in fact, we

have seen the growth of this industry with the growth of the economy.

What we have also seen, regrettably, is that there has been a growth of this

industry together with the growth of a number of new types professionals in the

field. It was the case where this industry was populated by people trained in

finance and over the last two decades, what we have seen is that people who were

trained, not in finance, but in fields as diverse as mathematics, physics and the

natural and physical sciences, themselves got into the financial industry and they

began to create securities which were not based on real property.

Mr. President, these securities were really securities which were derived from

securities which existed some distance prior. So, we had seen in the industry a

movement away from a company producing consumer goods, capital goods, good

such as aircraft, et cetera, selling equity on the market to raise capital, to a

situation where there were some new instruments; instruments which were

derived from existing assets. These were the derivative securities, these derivative

securities created by the mathematicians in the investment community.

The problem with these derivative securities is that many people did not

understand them; they were complex instruments. There were mortgage backed

securities which were responsible for a tremendous amount of the financial

calamity that we saw in 2008. We have seen a number of various instruments—

collateralized debt, we call them. We have seen credit default swaps. All of these

were very strange; very interesting complex instruments; people in the industry

did not understand them. Trinidad and Tobago, together with a great deal of

developing countries were fortunate to have really escaped the lure of having to

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Securities (Amdt.) Bill, 2013 Tuesday, March 11, 2014 [SEN. DR. MAHABIR]

invest in these securities which only a handful of people understood. People

pretended to understand and we had major investment houses collapsing; Lehman

Brothers, Citibank, City Corp. These companies collapsed because their investors

did not fully understand what they were buying and the risks involved.

This I call, Mr. President, a type of fraud on steroids. This is a nuclear type of fraud.

It is a fraud which occurs when, in fact, you have a lot of practitioners playing games

with people’s money. They are individuals who are producing nothing productive; they

are not using the funds raised to create real activity in the real economy. They are using

the funds to play greater and greater and greater games and at some point in time, the

casino collapses, as it did, and unfortunately, with globalization, almost the entire

global economy went with it.

This is, Mr. President, a type of fraud that we would like to avoid. Fortunately, for

us in this part of the world, we are not exposed. So that when we do get into this area, I

think we need to understand that there is much that we do not know; appreciate the

complexity of these instruments and we need to tread warily.

But, Mr. President, the type of fraud I want to focus on is not the nuclear fraud, not

the fraud on steroids, but really conventional fraud. I raise the issue of fraud because in

every single activity—every single human endeavour—particularly in those activities

relating to finance and funds, you will find the practitioners who are committed to

discharging their functions with integrity, and properly, and you will always find a

deviant element; trained, skilled and capable but with such training and such skill, that

level of deviance escalates to proportions of immense magnitude.

We would want, Mr. President, in looking at the amendments before us, to focus on

the type of fraudulent activity which can occur and to take steps via the amendments

proposed, to prevent them in the future.

In this area, Mr. President, I will focus on a few personalities. Many of us would

have heard of a name Raj Rajaratnam; a very interesting character because he is

currently serving 11 years in prison. What was his crime? Rajaratnam was one of those

individuals, highly respected—all in the public record now—because his hedge fund

was a fund that made superior returns when the market was rising, and when the

market was falling he made even more. So his fund earned both when the market rose

and when the market fell.

It was assumed that it was because of his superior training at the Wharton School.

He was properly trained; he did not have false papers. He was properly trained. The

problem with Rajaratnam was that it was not his technical competence and skills

which allowed him to earn superior returns, but rather, his capacity to obtain

617


information that few people in the industry had. If one has information that a

similarly circumstanced market player does not have, then one, of course, can

trade on this information because information gives you a certain premium. He

was caught because of the activities of the SEC together with the FBI. The FBI is

very capable in wire-tapping; the SEC in investigating transactions and he was

caught when there was a trade for one company called Advanced Micro Devices.

Advanced Micro Devices was a company, doing very well, but he had

information that Intel was going to acquire this before other people had the

information. And, acting on this information he bought. He knew when to buy, he

knew when to sell; he knew what to buy, he knew what to sell because he had a

number of individuals in the industry giving him information before others in the

market had the information. This is insider trading for which he is really a guest

of the Federal Government for the next 11 years.

Our laws, certainly, are laws which are geared towards this insider trading.

We would think that individuals in our country who are behaving in a similar way

would also face a similar consequence by being really unfair with respect to how

they conduct themselves in the market. Much has been said of the FCB

transaction. Is there insider trading there? Is there the use of information or the

use of privilege which is not available to those on the outside? But that is just a

mild infraction. We have seen the potential for it here and, in all likelihood, even

the first law presented in the ’90s addresses the issue of insider trading. Let us

hope that we can actually enforce some of these laws in our own domicile.

Mr. President, there is another personality and the story surrounding this

personality suggests that we need to tighten certain areas of our law. This

personality is someone known to all of us, Sir Allen Stanford. The moment you

saw this man you knew something was amiss. [Interruption] No, no, you knew

something—[Interruption]

7.15 p.m.

Mr. President, this is an individual who is Texan with a title, a British title,

“Sir”. It did not make sense because they fought a revolution many years ago to

ensure that they were not beholden to some foreign sovereign. [Crosstalk] Well

he could have been and he, certainly, perhaps, was—obtaining a title of “Sir” not

from the British Government, but from the Antiguan Government. I did not know

that was possible, I now know it is. So it is a derived knighthood from the

Government of Antigua—having a bank in Antigua, being called a billionaire,

landed in Lords on a helicopter, and is currently serving 110 years in jail. Now,

110 years is a kind of a long time. [Laughter]

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What is Mr. Stanford’s crime? Mr. Stanford’s crime is that he simply created

something, called it a bank—the Antigua Investment Bank or something like

that—and he issued certificates of deposits. These appeared to be bona fide

certificates of deposits, and a number of individuals who ought to have known

better, purchased these CDs, placed money in the hands of Mr. Stanford—I

imagine some of our cricketers in the Caribbean may have been so adversely

affected—and he promised higher than normal rates of return.

It is quite likely, Mr. President, that initially the goodly gentleman did have all

intention to invest these proceeds in real activities, generate a high rate of return

and pay his investors out of his investments, but that did not come to pass. Alas,

what the gentleman proceeded to do is that he simply allowed his scheme or his

scam to continue so that new money, new deposits were used to pay the interest

on previously existing deposits. This is the Ponzi scheme. This is the Ponzi

scheme that was investigated, again, by the SEC and the gentleman was brought to

trial, and is currently serving his 110 years. Have we seen this before in our

Republic and what did we do about it? The answer, of course, is yes.

The hon. Minister of Finance and the Economy did allude to what occurred in

the early 1980s at the height of the first oil boom—we did have a surplus of funds

from ordinary hard-working decent people, citizens of our Republic—and to

absorb these funds there emerged—for every supply, there will be a demand—

these institutions called trust companies. They were not trustees in the normal

sense of the word in that they acted as trustees for people’s estates, they were

simply people you trusted with your money. You had International Trust, Summit

Finance, and if not to be outdone there was one called Mountain Finance—

Mountain Finance and Summit Finance—and then South West International

Atlantic Finance and one run by the now defunct Kirpalani’s group, Trade

Confirmers Limited.

These finance houses, it seems as though every company with an accountant, at the

time, saw an opportunity to raise financing by forming a trust company offering rates of

return not comparable to the rates offered by the commercial banks at the time. What

were they ostensibly? They were no different from Mr. Stanford, starting off with the

intention of investing in property—if there is a property boom or in other

investments—paying high rates of return and then, subsequently, if when they found

that their investments were not as productive as they anticipated them to be, instead of

being honest and straightforward with their investors, they simply continued to

advertise more. So that they were using, again, new deposits to pay the returns on old

deposits to maintain a veneer of dependability, but it was all a mirage.

619


The confidence that they wanted to instil in the general public was not going

to last because at some time this particular activity was going to be exposed, and

we saw in the early 1980s these enterprises creating havoc for the lives of real

people. How many of these individuals faced the consequences the way Allen

Stanford did? The Central Bank Act was then amended so that we could now

include these non-bank financial intermediaries, but the fact is, Mr. President, that

was fraud, fraud Ponzi scheme.

Let us fast-forward 1981, to 2001, did we see something else similar to

Stanford and what we saw in 1981? Interestingly, Mr. President, every 20 years

we tend to see some financial fraud and scam emerging. In 1987, Max Milken

marketed junk bonds—[Interruption]

Hon. Senator: Michael Milken.

Sen. Dr. D. Mahabir:—Michael, yeah, junk bonds in 1987. He went to jail.

In 2007, we saw all those derivatives which were worse than junk. It would

appear, Mr. President, that the people who hold these assets are people who are

retirees, and when they have moved on and passed on to the great beyond, a new

generation comes in to be duped again, and we need to legislate now for the

generation that is going to have money in the year 2034. It is going to happen

again.

In Trinidad we have seen it—we have seen it in 1981; we have seen it in 2001

and so on. But the issue, Mr. President, with Allen Stanford is that he did not

appear to be someone to really elicit your total and complete trust. There were

many question marks, but there is a final individual, Mr. President, who could

dupe any one of us in this room, including me—yeah, he would take me and I

tremble at the man's name—he is Mr. Bernie Madoff. Let us look at the history of

the man. Mr. Madoff is one or was one of the most respected people in the

industry, starting his investment firm in 1960. It is very interesting, Mr. President,

going back. And where am I going with all of this?

Mr. President, I really think we need to close some gaps and plug some

loopholes in our law because Mr. Bernie Madoff started his career in 1960 as an

honest investment broker, made some pioneering developments. In fact, he

created a system which ultimately became known as the NASDAQ Exchange, the

National Association of Securities Dealers Automated Quotations. We see it all

the time on the financial press. Because of him, the NASDAQ came into being, and

he was the first chairman of the NASDAQ. He, in fact, was the one to ensure that

this particular market really progressed.

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But what was Madoff’s crime? This gentleman was responsible for the biggest

financial swindle in the history of mankind; $67 billion estimated and counting;

one individual. How did Madoff make off with all of that? You see, again,

starting with a bona fide and a legitimate product, you are running a fund, earning

superior returns based upon the investments you have made, and you are paying

these returns initially and, again, when the investments begin to falter and the

rates of return decline, instead of Mr. Madoff admitting to his investors that I am

not able to pay the rates of return on this occasion because certain investments

have not done well, again, he perpetrated the same scheme as Allen Stanford and,

that is, to simply run a Ponzi scheme where he is going to pay to his existing

depositors from new investors who are coming into his organization.

The modus operandi is simply to give the impression that all is well. The

mechanism is to try to generate an air of confidence and competence, and in order

to do that, the results are all going to be false. The accounting is going to be

similar to what we have seen in the established corporations like Enron and Tyco

and WorldCom, accounting fraud; accounting fraud with the conspiracy of bona

fide accountants; the bona fide rating agencies—the Arthur Andersens of this

world, the Standard & Poor’s—all equally culpable in the frauds and in the

schemes of gargantuan and proportions.

You see, in this industry, while this industry is so indispensable for the free

enterprise economy, the potential for harm is simply phenomenal, and it is for this

reason we need to be very careful in how we regulate this industry. Have we seen

the equivalent of a Bernie Madoff in Trinidad and Tobago? Let us look at what

has happened within recent times.

We have had an established company, Bernie Madoff established, starting one

of the finest insurance companies; a company that we have always been proud of,

all of us in the Republic, starting home-grown, legitimate, looking after the needs

of people, building enterprises, building careers, building communities, moving

on as all companies would do into a range of activities—making money in lean

times and in good times. During the recession of the ’80s, this company was so

awash with cash, it was able to buy Republic Bank for cheap when the shares of

that company was less than a dollar. They made money from the earnings of

Republic Bank, from the spirits department, from property, from methanol, from

insurance—a lot of legitimate money—and then what happened? Something went

awry, trading on a name, and we are coming to that. You see, trading on a name,

the Clico name, was a marketable name.

621


No one in this country would have thought that this particular company would

engage in an activity such as selling EPAs—executive premium annuity accounts.

What is an EPA? It is executive, so that you are important. It is a premium, so that

you are going to get more than normal rate of return; it is an annuity, so that it has

the annuity connotation. Scheme! I tell you, it is all in the name, and so people

were just drawn into it, and before we knew it, what was happening, the

organization, and the people in the organization knew that what they were doing

was seeing all of Trinidad and Tobago, and the wider Caribbean as a potential

source of finance for all their speculative risky endeavours and then, in fact, the

scheme collapsed—what was it Minister of Finance and the Economy?

7.30 p.m.

It was a Ponzi scheme promising—when you looked at Clico’s offer at the

time, they would advertise in the press, no compunction, 10 and 12 per cent rate

of return and deposits in excess of a million dollars, negotiable, and you ask

yourself, “How could the company pay this amount when the traditional

commercial bank was paying 2 and 3 per cent?” And many of us held the view it

was because of methanol prices or it was because of the earnings they are

generating in all their other businesses, only to realize that they were practising a

Ponzi scheme, using new deposits to pay the interest on the old. No different from

a Bernard Madoff.

Bernard Madoff is currently serving two life sentences. What is two life

sentences? This is what it is, Mr. President—I have looked at it and I have

thought about it, and I said I will speak to Sen. Emmanuel George on this—

because two life sentences, as Minister of Justice, it means that when the man

dies, [Laughter] his body is going to be embalmed and placed in that jail, and they

are going to look at him 24/7, that body, 24/7 for the next 75 years after death, so

that just in case, Sen. Al-Rawi, just in case his jumbie, his ghost decides to rise

and go back to fleece Wall Street again, they will lock him up [Desk thumping]

and lock him down.

I intended to speak to Sen. George on that, because as Minister of Justice I do

not know if your guards in the prison have the technical capability to lockdown

somebody, some jumbie, some ghost who is serving two life sentences. [Desk

thumping] I think Senator, you may have to ask the American penitentiary people

for some technical expertise because Bernie is serving two. I am telling you Sen.

George, there may be reason to have your guards because I have done some

622


calculations, Mr. President, and the calculation is this: I imagine—the AG is not

here, but the AG would have guided me. I am sure Sen. Al-Rawi will guide me

here. I said to myself, [Crosstalk] suppose, Mr. President,—[Interruption]—in

two life sentences, but suppose, Mr. President, a delinquent, a deviant in our

country goes into a supermarket and he picks up a loaf of bread, a soft drink and a

tin of sardine, does not pay for it, it is costing $20, and he walks out and a police

apprehends him. I am sure he could easily be taken to the magistrate and the

magistrate might give him a month.

Sen. Al-Rawi, would that be month? I think so. He could get a month for

“tiefin”—[Interruption] Yeah, basically he could get a month for that. So if $20,

Mr. President, could give someone a month in jail, $20 billion should give

someone a billion months, [Laughter] and so Sen. George, by the principle of

equity and fairness, Sen. George, I am sure there might be some people, a billion

months is plenty lifetime. It is plenty, plenty ghosts you have to lockdown.

Mr. President, what we have seen is this: we have seen in the jurisdiction of

the United States the centre of global capitalism, the real centre of a securities

industry in the world; it is large, it is growing. We have seen the wrongdoers, and

in every jurisdiction where there is a securities industry there will be wrongdoers.

We have seen the wrongdoers being brought to justice, paying time, doing time

for some of the crimes. Martha Stewart did it because she sold her ImClone stock

as her broker told her to do when they heard that ImClone was not going to get

FDA approval, and because she acted on insider trading she was able to do some

time.

Nothing is wrong with the lady, she is a decent lady, still makes good

tablecloths and so on, but she was imprisoned. Rajaratnam is doing 11 years for

acting on information that the market participants did not have. That seemed to

have been a fair punishment for him. Stanford; he is the man with false papers.

Stanford is doing 110, so he is not as bad as Madoff doing his two life sentences.

What, Mr. President, we have is an SEC in that jurisdiction really having the

power to investigate a number of wrongdoers. The fact that there is an SEC doing

that means that at least there is some check and balance on deviant and errant

behaviour.

We need that particular type of institution in our country. I am not sure

whether the SEC is financed via a levy on all its members; that certainly seems to

be the way to go because we do need to levy on all the firms which are under

regulation by the SEC, so that it will have the necessary financing to really

conduct its activity. There has to be an investigation and an enforcement arm, and

623


we do need our SEC, Mr. President, to be the agency that is going to protect the

public interest. We did not have any protection of the public interest in the 1980s

when these questionable trust companies were really fraudulently taking people’s

money.

We did not, Mr. President, have any action in the recent period to bring the

wrongdoers at the HCU and Clico to justice. It cannot be that they were not doing

wrong. They were doing wrong. The United States has deemed that Ponzi

schemes constitute a criminal act, a criminal act of such proportion that the

punishment is going to be very severe. So, Mr. President, I think that while one

supports all the amendments aimed at improving the securities industry, I am

proposing an amendment which would increase the powers of the Securities and

Exchange Commission for consideration by the hon. Minister of Finance and the

Economy. This amendment which will be circulated reads as follows:

Insert new sub-paragraph (b) under clause 4 to read as follows:

“protect the integrity of the securities industry against…”—fraud and abuse—

“Such fraud and abuse include but are not limited to pyramid schemes,”

This, Mr. President, falls under the ambit of the SEC in the United States. It

includes pyramid schemes, manipulation of securities prices. This is the

“pump and dump” operation that is popular across many jurisdictions. “Pump

and dump” is simply using the Internet so that you can hype up certain stocks

which are thinly traded, and then once you have generated sufficient interest

in that particular stock and you have been able to engineer a price increase,

you will then sell and the price of the stock will then fall. By that time you

have exited the market—“pump and dump scheme”.

So that to prevent:

“Such fraud and abuse include but are not limited to pyramid schemes,

manipulation of securities prices, insider trading, false statements”—as we

have seen in the Enron and Tyco situation—“misappropriation or theft of

funds”—that is very clear—“and”—very important, Mr. President—“the

marketing of deposit and deposit like instruments and/or any other activities

associated with Ponzi Schemes.”

Mr. President, when we read the law we see that the securities industry does

not include the normal credit unions and insurance industries, but, Mr. President,

we need to close the doors. The fact that a company is a credit union, incorporated

as such, does not mean that it is confining itself to credit union activities only. We

624


should be looking at the activities of the companies. All those activities which are

going to jeopardize the security industry because they are fraudulent in nature

should, in fact, be targeted and closed.

The fact that an insurance company is dealing in mainline insurance does not

mean that it is not going to be selling these false certificates. Once the SEC is

given these powers, and once they know that it is within their remit, Mr.

President, to investigate all of these fraudulent activities, I think we will go some

way in closing the gap of the type of abuses that we have seen in our Republic. I

think if we were to proceed, Mr. President, by covering all these fraudulent

activities, as we have the opportunity to do now, then the Act itself, amended, will

go a long way towards ensuring that the securities industry really does what it is

supposed to do, what it is meant to do, what it is designed to do; that is to

encourage economic development in Trinidad and Tobago, and at the same time,

to ensure that there is little or no abuse of this industry which is so prone to

massive, mega abuse across the world. Mr. President, I thank you. [Desk

thumping]

Mr. President: Sen. Singh. [Desk thumping]

Sen. Avinash Singh: Thank you, Mr. President. As I rise today to contribute

in this Bill that seeks to amend the Securities Act, 2012, Mr. President, by this

time hon. Senators are well informed and well aware of most of the parameters of

this Bill, and those looking on also are well educated by this time on what this

Bill seeks to do in terms of the amendments.

Mr. President, 68 clauses long and very complicated in nature, this Bill really seeks

to give some sort of security in terms of the financial sector. I am going to be very brief,

but my concern, Mr. President, is while we are concerned about the major investors and

the major ballplayers in society, there are many small investors in the society, and that

being said, I would like to draw your attention to the recent scenarios. I mean, of course

most of the hon. Senators would have mentioned the situations that went by with major

financial institutions, that being HCU and Clico, but this is to say, Mr. President, that

during that meltdown and that financial crisis, after the closure of Caroni (1975)

Limited, many ex-Caroni workers and many small farmers, and many ordinary man,

woman and child, and citizen, I should say, invested in these institutions, and as Sen.

Mahabir indicated, they fell for the large interest rates or returns on their investments.

I myself am a victim of that, Mr. President, in that my family, and I really feel for

my grandfather having worked at Caroni for 47 years, even before it was Caroni

(1975) Limited, and accepting VSEP and placing his VSEP package, the total sum

625


of it in the HCU. Strange enough, it was very, you know, shocking to know that

some institutions would go to that level and use religion to lure investors into the realm

and to put their investment there. Why I say this, Mr. President, is because I, together

with my parents and grandparents, were at temple one day when these investors came

knocking on the door of the mandir and encouraged all the individuals in that temple to

invest in the HCU, and maybe it was the 10 per cent return on investment.

7.45 p.m.

Like anybody, they would seek to get the best return on their investment, but it was

not so much that many of the individuals were lured there, because it was people we

trusted in the community that really came towards us getting our resources in the HCU.

It is very sad to know now that even in these amendments in this Bill, after reading it

through a couple of times—and I stand to be corrected—that credit unions are really

left out of the realm of this particular Bill. I would really like to see, or in fact I would

like to get a commitment from this Government, as to what and when we can see some

sort of justification and manifestation in terms of the regulations that govern credit

unions. [Desk thumping]

This is so because I would not like a return of the situation that happened in the

past, where our resources in the sums of millions of dollars in the case of HCU, $188

million that was already paid to some 18,354 individuals and $10.8 billion in cash and

bonds to the Clico investors. It is unfortunate to know that the State had to intervene

and bail out this situation. I dare say that this would really negatively affect our society

and economy, should a scenario like this occur again. So I would really like to see that

commitment. If the hon. Minister of Finance and the Economy in his wrapping up

would indicate, as it is not taken care of in this Bill here, that seeks to deal with

financial regulations, Mr. President.

Another point I would like to make is that in past contributions in this honourable

House, all Senators here contributed to the fact that we all care about everybody, the

ordinary man in society, in whatever actions we take. Let us not only be concerned

about the big investors; let us also be concerned about the small investors: the ordinary

man, the ordinary citizen, who every dollar is of value to them, and may not have that

capacity to go big and trade in the stock exchange and so on, but rather contribute

whatever little resources they have for a good investment.

Strange enough after that collapse, after that financial crisis when interest rates

were at history’s highest: 10 per cent, 11 per cent and 12 per cent, now it has boiled

down to point something per cent, a fraction of a per cent in terms of return on

investment.

626


Sen. Al-Rawi: Sometimes zero.

Sen. A. Singh: And that alone can tell you the situation in terms of the crisis here,

not only in Trinidad and Tobago but worldwide. So we stand to be corrected, and we

must do everything in our power for the benefit of our citizens, because if we really

care about moving into First World status we should seek their interest, from even this

point here, in terms of where they put their financial resources to get returns, Mr.

President.

In past articles, the hon. Sen. Ramkhelawan indicated that financial regulations are

like building a fortress, and this fortress must be well-structured to prevent weak links

in the system, so that individuals do not violate these conditions and these regulations,

as seen in the past, as indicated by former Senators, for example, in the First Citizens

scenario. So, Mr. President, in terms of the investment, per se, in terms of this Bill, it

seeks to deal with investors and traditional investors, but into that definition we really

ought to be cognizant and take respect towards all investors being from small—

whether you are a farmer, whether you are a small parlour owner, small bar owner,

business owners, everybody in society. [Desk thumping]

Let us really move in the direction to regulate this industry, so that in the near

future we do not have to come back here and repeal or amend. Let us do something in

this honourable Senate for the benefit of all, and seek to give the citizens a comfortable

reason to invest both locally and even internationally.

Mr. President, the current Central Bank Governor indicated in the 63rd annual

general meeting that the growth and development of the credit union sector has taken

place within a legislative framework that does not provide for formal prudential

regulation or supervision. As you know, the present legislation governing the credit

union movement, which is the Cooperative Societies Act, dates back to 1971, and falls

short of the prudential framework to protect members’ savings and to help safeguard

the integrity of the domesticated financial system. Mr. President, those are the words of

our current Governor of the Central Bank. [Crosstalk]

This situation really ought to increase the level of confidence in terms of

individuals and citizens investing here. Basically, this is one of my main concerns in

terms of how we are about to regulate the credit unions, as almost all the other points

were really well taken care of and will be taken care of in the other contributions to

come. But this was one of the concerns I had, and I really want that commitment here,

if not today, but very soon, from this Government and hon. Senators opposite, in terms

of dealing with that issue and preventing, rather than curing, the situations from

happening in the near future.

With those few words, I thank you. [Desk thumping and laughter]

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Sen. Anthony Vieira: Thank you, Mr. President. I have long felt that Trinidad

and Tobago should be the regional financial centre, [Desk thumping] and I think that

this legislation is a step in that direction. But to be a solid financial centre, probity is

important, and that is something that we really need to address, because it goes to the

whole question of confidence.

Having recently looked at The Wolf of Wall Street, I have to tell you, I have a very

jaundiced view of investors and investment brokers and that whole scenario, and that

view has not been placated having heard Sen. The Hon. Howai talk about all the

meltdowns and all the financial crises, both here and abroad, in the recent past. So it is

quite clear that regulation is necessary. A laissez-faire approach will not cut it.

And, Mr. President, this is not today. I see that in England the licensing of agents in

vendible commodities by the Lord Mayor of the City of London goes back to the time

of Edward I. Agents were required to make an oath to be of good behaviour. In 1697,

an Act was passed to restrain the number and ill practice of brokers and stockjobbers.

Dealers had to be licensed by The Lord Mayor to provide a bond of £500, forfeitable

for misconduct, to act only as agents and not for their own account, and to maintain

records of transactions. That Act lapsed in 1704. But the reason for strong regulation is

quite clear, because this type of property is an intangible form of property, and it gets

really difficult for people to get their minds around things like derivatives and all of

these different financial packages that are put together.

When I look at the Act and the amendments, I think they cover all the important

aspects of regulation: the licensing of investment businesses, rules for market conduct

and the very important thing dealing with disclosure requirements. As the Minister has

indicated, this is a work in progress, they are constantly fine-tuning it. It is also

important to remember that the legislation does not work only by itself. It works in

tandem with the rights and obligations under the civil law and it works in tandem with

the provisions of the criminal law. It is in the criminal law that I want to say a few

words now.

I was not planning to speak, but having heard Dr. Henry and Sen. Cudjoe, it really

resonated with me when they talked about the insider trading aspects, and this is a

matter of some concern. We have lots of laws dealing with insider trading and, in fact,

under this Act, sections 100 and 101, the wording is very good. It is better than a lot of

the wording in other statutes abroad, you know. We also have under section 25 in the

Integrity in Public Life Act, provisions dealing with insider trading, and under the

Prevention of Corruption Act, section 5. But who is enforcing it? Do we have the

capacity? Do we have the expertise? Do we have the institutional memory to

really deal with this kind of crime?

628

Securities (Amdt.) Bill, 2013 Tuesday, March 11, 2014 [SEN. VIEIRA]

When I look at what happens in other jurisdictions, like in the United States

and in England, you will see that their regulatory bodies have thousands of people

working for them, and 40 per cent of those people are specialist lawyers. I do not

think we are going anywhere near that, but I think you need to understand that

when you are dealing with white-collar crime and financial offences, it seems to

me that we have a disconnect. I would really like to urge the Government to start

dialoguing and liaising with the DPP, the Commissioner of Police, the FIU and

other interested stakeholders, to start talking about the possibility of establishing a

dedicated financial crimes task force.

We have to deal with insider trading, unlawful conversion of funds, financial

fraud, securities fraud, identity theft, money laundering, forgery, counterfeiting,

counterfeiting with intellectual property goods, bribery. I think that there is a gap.

We have all kinds of laws, dealing with all kinds of subject, but we really fall

down every time on the enforcement aspect and the governance systems, and I

think it is high time we address that. I think this could be that impetus.

8.00 p.m.

Coming back to the Bill—I like the Bill; I like the amendments because I

think it seeks to balance some very interesting tensions: the desire to control

abuse on the one hand and commercial liberalization on the other; being overly

prescriptive on the one hand and at the same time being user-friendly; protecting

the unsophisticated investor and yet allowing for the sophisticated investor to take

risks. All of these things suggest to me that a lot of thought and energy and effort

and hard work went into this legislation, so I commend the Government. [Desk

thumping]

I have just one minor suggestion to do with amendments and that deals with

clause 3, and that clause 3 reads—yes, we are talking about:

“…in the absence of evidence to the contrary where, in the case of a

distribution…after an act, advertisement, conduct or negotiation in furtherance

of a purchase or sale of a security, whether direct or indirect, such act,

advertisement, distribution, conduct or negotiation is not solicited and—

(a) is made by mail or courier, telephone or”—fax—“transmission…”

Fax transmission in the 21st Century. I do not know if people use faxes anymore.

[Interruption]

So, I would like to suggest that whoever is doing the drafting in the legislative

draftsman’s office, they upgrade this standard provision, and we now start to deal

629


with electronic transmissions and/or by any effective means, because I see this

copping up from time to time.

The other thing that I found curious in the Act was section 168. What it says is

that:

“Subject to section 169, nothing in this Act prevents the Commission from

referring any matter to the Director of Public Prosecutions,”

So, is it that the SEC is going to do its own prosecution and it may, if it wishes,

refer it to the DPP?

Then is says at 169:

“No report concluding that a person to whom this Act applies has failed

without reasonable justification to fulfil a duty or obligation under this Act

shall be made until reasonable notice has been given to such person of the

alleged failure and the person has been allowed full opportunity to be heard

either in person or by an Attorney-at-law.”

Maybe natural justice but I do not know how that gels with certain types of

offences.

So, that is it. All in all I would say it is a very good piece of legislation and I

really only rose to my feet to speak about the need for dealing with white-collar

offences.

Mr. President, I thank you. [Desk thumping]

Mr. President: Sen. Al-Rawi. [Desk thumping]

Sen. Faris Al-Rawi: Thank you, Mr. President, for that warm reception by

this Parliament at 8.02 p.m.

Mr. President, I rise to make a contribution to this Bill to amend the Securities

Act, 2012. A number of very excellent contributions have happened so far. If I

could say that the hon. Minister of Finance and the Economy has done well to

continue the good work left on the Table by the last administration in bringing

forward [Laughter]—seriously—significant work to deal with the coordination

and alignment and inter-articulation of the various pieces of law that regulate our

financial sector and seek to protect financial interest. Because it is a fact that the

amendments to the Central Bank Act, the amendments to the insurance

legislation, the amendments to the Financial Intelligence Unit, the amendments to

the securities laws of Trinidad and Tobago started quite some time ago and have

been ongoing for what is certainly now far too long.

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Securities (Amdt.) Bill, 2013 Tuesday, March 11, 2014 [SEN. AL-RAWI]

So, it is commendable to see the delivery on the type of laws that this country

needs. It is perhaps for that very reason, Mr. President, that the Opposition has

taken great pleasure to lend full support for the laws of Trinidad and Tobago as

piloted by this Government. And it is a certainty that we as an Opposition lend

our full support on all laws which are in the best interest of Trinidad and Tobago,

and our record as an Opposition proves that. Our record as an Opposition is very

much different to every other opposition that has stood in Trinidad and Tobago.

[Desk thumping]

The hon. Minister of Finance and the Economy, I am sure, can also bear

personal testimony to the volumes of work that we are happy to provide in the

committees that we serve on as Opposition Members. I do say, Mr. President,

very openly this evening, tonight, that it has been a great pleasure to serve under

the chairmanship of the Minister of Finance and the Economy on any committee

that he is in charge of. [Desk thumping and crosstalk] Yes, I say so because he is

very accommodating to all points of view and indeed, I can echo that the Leader

of Government Business in the Senate, Sen. Ganga Singh who is not with us this

afternoon is also an equal pleasure to work with in committee stages.

So, Mr. President, I am describing the fact that as an Opposition and as a

Government and as an Independent Bench, we certainly do recognize our role and

responsibility as legislators to bring forward the best interest of the citizens of

Trinidad and Tobago. [Interruption and laughter] Mr. President, the fact is—I

will come to you Sen. Hadeed in a little while—that we are dealing with a Bill

which is incapable of being dealt with in this kind of forum in its truest sense, the

passage which we propose for a Bill like this, the process and passage is entirely

inappropriate for a Bill that has 68 clauses to it, because if you have one hour to

speak in this Parliament and you spend one minute per clause you do not even

have enough time.

When you think about, also, the fact that this deals with consequential

consideration to the parent Act and that parent Act has some 176 clauses or 71

clauses, then we further appreciate the difficulty of dealing with this. This is

perhaps why the hon. Minister of Finance and the Economy could not, in the time

permitted to him, deal with any form of reflection on the specifics, the real

specifics of the Bill. And, it is for that reason that we as an Opposition are pleased

to recommend and join in a special select committee of the Senate to consider this

Bill in that committee setting. Because, Mr. President, that would give us the

ability to put on record all the considerations in the committee stage, because

when the report of the special select committee is produced, the minutes,

631


submissions and documents arising out of that committee and considered by that

committee, all form part of the record which is a very critical issue when one has

to understand that a court is called upon to consider Hansard as an aid to

interpreting or construing the laws of Trinidad and Tobago.

This Securities Act, 2012, which we now seek to amend by this Bill, was

passed in December of 2012, proclaimed on December 28, 2012, a very excellent

date being the date of my wife’s birth—[Interruption]—so I know that date well.

But the fact is that this particular Act was brought to the Senate with an

assumption. There was an assumption that Trinidad and Tobago was going to be

faced with a gun to the temple of the Parliament if we did not pass it, because

IOSCO had set a standard for us to be on the A list. In fact, there is only one list so there

is no real difference between being on an A list because an A list presumes that there is

a B list. But there is only one list. But, Mr. President, there was never an issue with this

Parliament being faced with any sanction necessarily, because certainly the Minister of

Finance and the Economy has not told us what the sanction would have been if there

was a failure to produce the laws which resulted in the Securities Act, 2012.

But, Mr. President, again, as a responsible Opposition, we participated in providing

a three-fifths majority, a unanimous position of the Independent, Opposition and

Government Benches to pass the Securities Act. What is unfortunate is that we have

had to wait until we arrived today in the Parliament, knowing all that we know about

the impossibilities of considering this kind of law in the required detail that is

necessary, that we had to wait until we got here today for the Government—and in fact

the Minister of Finance and the Economy is well aware, the first thing I did upon

walking into the Chamber is to ask him, why do we not take this to a committee? And I

think it rather unfortunate that we arrange our affairs without foresight.

And as I stand here today in this Senate, I cannot even suggest what is going to be

dealt with next week, because there is no legislative agenda by the Government. And

surely, Mr. President, we can do better than that. We can anticipate with certainty what

is to come next so that we can make the best use of time. We as Senators, Mr.

President—I myself serve on the joint select committees which are established under

the Standing Orders; I serve on the special select committee for the planning laws; I

serve on the insurance committee, and, Mr. President, we work in our political parties,

but, we as Senators also, in the Opposition and in the Independent work on a part-time

basis in the Parliament. After all, we have the glorious salaries paid to us and

recommended by the SRC and the improvements refused by the Government. So,

there is no real incentive, supposedly, from a pecuniary basis to, in fact, achieve

what we want.

632


In fact, Sen. Dhanayshar Mahabir put it to me quite well in realizing that Sen.

Hinds was no longer going to be sitting with us, when he said he feels as if he has been

deprived of nine-tenths of his salary [Desk thumping] and his remuneration in the

Parliament, because one-tenth represented what he considered the pecuniary interest to

be from the Parliament, and nine-tenths the talent and contribution given by Fitzgerald

Hinds as a Senator, and I agree with him. [Desk thumping and laughter] Parliament is

less luminous a place without Sen. Hinds’ contribution. Because, Mr. President, it is

necessary for us to be animate, and this debate has been an inanimate, rather anaemic

debate because we cannot get into the guts of the law, because the Government cannot,

after four years, produce a legislative agenda. So, I implore the Government to again

step up to the plate of organization and to provide us with some degree of foresight as

to where we go.

Mr. President, the Bill itself, and dare I say the Act, 2012, which is to be

reviewed—Remember we are now sitting here considering 68 clauses which propose

umpteen amendments on an undertaking, a fulfilment commendably to the

Government, of an undertaking to review the Securities Act, 2012. And in reviewing

that Act, it is not only these 68 amendments proposed by these 68 clauses. Indeed, I am

aware that the Minister of Finance and the Economy has said that he has a few more

amendments to put on the Table. I am also aware—we are all aware, we have notice of

other amendments circulated by Independents today alone.

So, the fact is, Mr. President, that the Bill itself requires much more time for

consideration. And there are a few things that I wish to point out. We have heard hon.

Senators speak to the dangers that can happen in relation to securities and interests. We

have heard the stories of Bernard Madoff; we have heard the stories of Stanford, we

have heard the stories as put onto the record in the local experience. Mr. President, I

wish to say in respect of the local experience a few words on the FCB issue. I do not

think that we should necessarily be in a hurry to not be fair to anyone. I agree that there

is a requirement for an investigation into the circumstances surrounding the acquisition

in a disproportionate ratio of shares in the FCB IPO.

But, Mr. President, I think that the names of the gentlemen involved, and their good

names, if I dare say so, having worked in particular with Larry Nath as I have in the

banking sector, I wish to say that their good names are equally important and it is

therefore urgent for us to expedite the clearance of people’s good names if that is the

case. Because there is this label on the outside there that something untoward happened

in this IPO. But, Mr. President, we all know that people oversubscribed to shares and

they are given a guarantee as to a minimum number of shares that they will get and

they oversubscribe or say that they are willing to buy more shares just in case someone

else does not pick up the slack.

633


Mr. President, I am aware from the public domain that the trade union

operating—the banking and insurance trade union did not advocate the pick up on

the IPO at FCB, and therefore there was a slack in terms of the number of

employees picking up those shares.

8.15 p.m.

So I am not in an anxious and rushed state to hang anyone, but I do urge the

hon. Minister of Finance and the Economy to allow gentlemen who do not have

the opportunity to set their names straight in the Parliament, they not having

voices in the Parliament, to hurry up with facilitating an investigation so that their

good names may be cleared, and if there is an issue that we can deal with it.

Because, Mr. President, this Government is proposing and has proposed, first of

all, a very successful and excellent initial purchase offering into the floating of

shares into the FCB bank. That is an excellent thing to have done in an economy

where we are struggling for a return to growth, where confidence is at an all-time

low, where investment on the stock market is lagging far behind.

The hon. Minister gave us comparative indices for the SEC beginning in 1997

and taking us to date, but what he did not tell us is that for the last four years, the

activity level of the stock market is now down to one-quarter of what it was. So in

four years, the activity level on the market excluding the IPO at FCB has been

terrible, and that is an indication of confidence. It is also an indication of the

confluence of many issues including recovery coming out of the global and local

financial crises that happened.

There is a fact there, but, Mr. President, this Government in pursuing a very

commendable objective in allowing the public access into the profitability of a

state-owned entity such as FCB, which is, dare I say, one of the best banks in

Trinidad and Tobago from my own experience as an attorney working in the

banking sector, I can say that it is critical for the Government to demonstrate a

willingness to act with propriety and anxiety in setting records straight so that

securities which arise out of these purchase offerings and floating onto the stock

exchange can make good and prudent sense for people.

You see, Mr. President, I say this because there is a caution to be had when

we recognize that the hon. Minister has said to us that we are going to have a

floating of the Home Mortgage Bank and TTMF structures after amalgamation as I

understand it, or co-ordination, that those two entities would be put up for the

public to acquire shares in them. There is also very importantly a golden jewel

available to the Government in what constitutes the National Gas Company of

634


Trinidad and Tobago. That, Mr. President, if we follow the Ecopetrol model utilized in

Colombia, where the natural gas entity in Colombia married with the oil producing

entities in Colombia and then floated itself in a private arrangement onto the stock

exchange, resulted in one of the most successful models of growth in the developing

world. And so, NGC, in particular, which has billions of dollars of assets, it is extremely

cash rich, lies open for this kind of structure for the development of securities, for asset-

backed securities as we contemplate in the Securities Act and in this Bill.

But, Mr. President, confidence returns to the equation and as much as my learned

colleague, Sen. Mahabir, spoke a while ago about confidence and a number of

examples, what confidence is there when it is definitely something in sight that we are

going to float HMB and TTMF when married together? It is definitely a possibility if we

are looking for sustainability for us to be looking at NGC for market exploitation and for

participation of the public, NEC as well, PLIPDECO as we have it, et cetera. What

confidence is there to be had when we see a tremendous lag in the business shore up of

these entities and, in particular, the procurement legislation which is so desperately

required to ensure that state entities which can be brought into the network of securities

as I have described, are left wide open to abuses, abuses of the type spoken of by my

learned colleague, Sen. Dr. Mahabir. Think about it, Mr. President.

When we look at the front page of the Express today and we see a billion-dollar

contract awarded to a known investor and financier of the UNC in suspicious

circumstances—and I am speaking about the award of the SIS, WASA, NGC partnership

for the water treatment facility at the Beetham Estate, Mr. President. When you look at

the potential for bid rigging in that kind of scenario and the odium and contempt that

taxpayers can be placed in, then we ask ourselves: are our securities being properly

managed when we look to shareholding and ownership in entities such as TTMF, NGC,

et cetera?

Now this may cause some discomfort to the Government, but the fact is that an

Opposition must raise these issues. I am hearing my learned colleague, Sen. Coudray,

grumble as is customary. If you wish to communicate in this debate, then do so. But the

fact is, Mr. President, the UNC made a living when in Opposition of putting, quite

correctly, the PNM to the challenge when it ran the Government. Senator, deceased

now, God rest her soul, Corinne Baptiste-Mc Knight, challenged a PNM Government

on a daily basis as she did a UNC Government, and it is an Opposition’s responsibility

to the citizens of this country to challenge a Government where dark spaces potentially

exist. And I am being charitable when I say potentially exist. It is critical for us to raise

burning issues on the floor of the Parliament, where we are permitted the privilege to

parley with no consequences other than relevance, and I am being very relevant right

now.

635


So, Mr. President, the fact is—parler is French. It is French, to talk, of

course—that it is incumbent upon the Minister of Finance and the Economy to

accelerate and act with anxious scrutiny as our courts often say in the issue of the

FCB matter, to balance the competing interests there. One is the public interest in

the perception that something went wrong and the other equally, perhaps more

important interest, is in the good names of individuals that are exposed in that

structure, and it is equally important for the Government of Trinidad and Tobago

and the Cabinet of Trinidad and Tobago to act with anxious scrutiny, anxiety,

haste, determination in appointing, for instance, an A team of lawyers to

investigate the NGC’s situation now in the Beetham wastewater plant.

Equally important, for instance, for the hon. Prime Minister to stand with the

firmness that she did when she said the Milshirv deal had to be dealt with, where

the AG actually had to withdraw proceedings commenced by him later. So, it

cannot be that what is good for the goose is not good for the gander. [Desk

thumping] It cannot be that we have A teams of lawyers appointed and well paid

by the State to protect interests of taxpayers only of PNM entities. It cannot be that

we do not yet have any form of sight as to when public procurement legislation is

going to arrive in this Parliament. It cannot be acceptable, Mr. President, that we

deal with the development of the securities laws in the manner that we are doing

in an ad hoc, gratuitous basis.

Mr. President, this Bill has a number of clauses and the Act has a number of

clauses which deal with a few critical issues. First of all, we have had—and I wish

to commend the hon. Minister of Finance and the Economy again, for laying the

Draft Securities (General) By-laws, 2013. I am not quite sure if it has been laid in

the House, because the fact of laying is annexed to section 148(1) of the

Securities Act, 2012, and the question of the passage or acceptance of the

subsidiary legislation has to happen. But, Mr. President, unless we are regaled

with the thinking behind the amendments proposed, then we are in trouble.

Let me raise the point in relation to capital adequacy by way of example. The

by-laws which are before us now, the Draft Securities (General) By-laws, deal

with providing for capital adequacy—I think it is in section 27 of that. For

instance, that there is a capital adequacy set out as follows: $2 million, $5 million,

$6 million with respect to businesses effecting transactions in securities,

businesses effecting transactions on account for others and broker-dealers. So,

that is $2 million for businesses effecting transactions for their own account, $5

million for businesses effecting transactions for the account of others and $6

million for underwriters. My question is why? Where did these limits come from?

636


What is the rationale behind it? How do we marry that and provide a degree of

confluence with the discussion that we are having in relation to the development

of capital adequacy and capital adequacy formulae for insurance entities?

It is critical for us to have some degree of harmonization in rationale if we are

to accept this construct, because unless we have an indication, then perhaps it is

worthwhile to join in my learned colleague, Sen. Ramkhelawan’s suggestion, that

the capital adequacy ought to be stated in the parent law as opposed to the

subsidiary legislation.

The other issue, Mr. President, that jumps out at us is the inter-articulation

proposed between the SEC and the Central Bank. We have two regulators. Now,

there are quite correctly two points of view in looking at the disaggregation of

supervision as we propose between the SEC’s regulator and the Central Bank in

regulating all other financial entities and one would assume the credit unions too.

But, how are these resources to be worked together? I am not quite sure that the

memoranda of understanding to be engaged in between these entities as

prescribed in the by-laws and in the Act, the Securities Act, and in this Bill make

sense. Therefore, it is incumbent upon us and it is incumbent upon the

Government to allow us the opportunity for explanation because we have had

none. We cannot as I put forward, as I have explained—the hon. Minister of

Finance and the Economy does not have an opportunity today to do that because

the time does not permit it, and therefore, if that is a truism and a reality, why did

we not just agree ages ago when this was put on the Order Paper by way of notice

from the Government, that we should move to a committee.

Mr. President, the issue of due process jumps out as well in the parent Act and

in the Bill before us. When we look to sections such as section 21, section 43(6),

that is 21(b), section 43(6) of the parent Act, we ask ourselves: where is due

process without explanation?

8.30 p.m.

In section 43(6), Mr. President, we have a very interesting subsection. Section

43(6) provides—and this is an amendment proposed by way of this Bill for a new

subsection (6) there:

“A self-regulatory organization shall publish in two daily newspapers of

general circulation in Trinidad and Tobago a notice of any disciplinary action

taken against a member or an employee of a member within thirty days of

decision to take such disciplinary action unless the Commission directs

otherwise.”

637


What about the interest of the persons who have a right to defend themselves?

It is true that we are balancing an interest here between the right of the

investor, the right of the purchaser of securities, to be informed of material issues

and relevant issues which affect investment decisions, and the financial soundness

of entities, but we have to balance that against the due process right to be

presumed innocent until proven guilty, and your reputation is hard to recover. Ask

anybody in public life what that is like and they will tell you that the expression

by Churchill that a lie flies halfway around the world before the truth has had the

chance to pull up its pants is very true.

So, Mr. President, the due process concerns, for instance, in section 43 new

subsection (6), jumps out at you. The same thing arises when we look to clause

44(2). Section 44(2), which is, again, an amendment proposed by this Bill, says:

“Subject to section 160, a person aggrieved by an order of a self-regulatory

organization made under section 43(2), (3) and (4) may apply to the

Commission for a review of that decision within fourteen days of receipt of

the decision.”

Fourteen days, Mr. President, is hardly likely an appropriate period for a well-

constructed notice of objection and review to be put together. And what happens

if you miss that deadline?

Look at the hon. Attorney General’s advice given in relation to the deportation

of members of the Jewish sect that were in Trinidad recently. He gave very good

advice and acted in the best interests of the comity that exists between Canada and

Trinidad and Tobago, in terms of the reciprocity of laws and the mutual respect

for laws. But he put his hat upon the peg that they had not applied within time,

that there is a specific period for an appeal. What happens in a case like section

44(2)? What happens if you miss the 14 days? There is no exception to that

section. So that is another example of where we need to look a bit further.

Mr. President, section 21(b), when we look at that, of the parent Act, which

provides for rules for appeals, is another critical section for us to factor. That is

the position where:

“The Commission may, with the approval of the Minister, make Rules—” for

inter alia—

“(b) prescribing the procedure for appeals of decisions of self-regulatory

organizations and reviews of decisions of a delegatee;”

638


That is critical for us to factor in this scenario and I would hope that the hon.

Minister is in a position to tell us as to the state of rules that may be in draft form

thus far.

Sen. Ramlogan SC: “I thought yuh tell meh yuh talking for five minutes,

man, Faris.”

Sen. F. Al-Rawi: AG, I missed you so I had to speak a little longer to make up

for you. So, I welcome the hon. AG back from the library where he was pursuing

matters with Sen. Henry. Mr. President—

Sen. Sturge: With these few words.

Sen. F. Al-Rawi: Not quite yet, no few words just yet.

Mr. President, the issue of our regulator having the capacity—the operational

capacity—to supervise this industry is a very real one, and it is therefore

incumbent upon the Minister of Finance and the Economy to tell us that

arrangements are properly secured for the operationalization of the SEC. The SEC,

in its new capacity, in the two-year period that they have in some senses, from the

proclamation of this Act on December 28, 2012, moving forward, is a very short

space of time, and therefore, we need to know that there is adequate funding and

resource capability, and we need to identify where the money is coming from

other than by way of appropriations made by the Parliament of Trinidad and

Tobago from year to year and fees. I would hope that the hon. Minister is able to

tell us as to the ability to provide funding through fees, et cetera, licensing

arrangements in particular, so that we have some degree of comfort that there is

capacity there.

But, there is another capacity which I hope the hon. Minister will speak to and that

is the personnel capacity—the personnel who are going to staff this entity. It requires

people of considerable expertise. The parent Act provides for the secondment of

persons from abroad and preservation of superannuation benefits that they may have as

well if they come from a foreign entity and are seconded to the SEC locally. How many

people are coming from abroad? We have a health care sector, we do not have enough

doctors; we do not have enough nurses. Do we have an SEC without adequate

resources? Particularly, when we look to sections 6 and 7 of the Act, section 6 which

speaks to the functions of the commission and section 7 which speaks to the powers of

the Commission in the parent Act. Because, Mr. President, we are adding into this Act

a very significant operational anchor, and that is the fact that we are adding in by way

of amendment proposed in this Bill, a new clause 6(l) which requires the commission

to:

639


“(l) assess, measure and evaluate risk exposure in the securities industry.”

Now, we know that the Central Bank of Trinidad and Tobago has capacity for

that, but I am not aware, in particular from my experience in litigation against the

SEC, that they have that kind of resource base. So I would urge the hon. Minister,

while he is thinking about the laws, the operationalization, the breathing into life

of the meaningfulness of laws is equally important. We do not want to see this

piece of legislation improperly proclaimed or proclaimed prematurely, as section

34 was, out of the Administration of Justice, (Preliminary Enquiry) Act was, because

that was taking good law and operationalizing it badly, proclaiming it badly. So I do

hope that the hon. Minister can tell us about the human resource requirements, the

anticipation of the volume of work, the cost benefit analysis that is required. [Crosstalk]

Sen. Hadeed, I am looking forward to your contribution shortly.

Sen. Hadeed: Next week.

Sen. F. Al-Rawi: Next week. [Laughter] So, the operationalizing of this entity is a

critical issue.

Mr. President, we did have some very good contribution, very entertaining

contribution from Sen. Dr. Mahabir, and I did quite like the concept of how the

Minister of Justice would be contemplating using prison facility development to look

after two life sentences. Sen. Dr. Mahabir was, of course, well aware that in the United

States, they serve sentences concurrently to make sense out of nonsense, but in

Trinidad and Tobago, we may look, perhaps, to sequential addition. But the hon.

Senator did raise a very important issue and that is the harmonizing of offences. It is a

fact that we have some very, very high provisions here in this legislation and in the

amendments proposed, including up to $5 million in fines, three years imprisonment, et

cetera. But, Mr. President, with that in view, I think it important for us to have a tabular

reference to the Proceeds of Crime Act, the Financial Intelligence Unit legislation, the

FIA legislation, the Central Bank Act, the Data Protection Act—to name a few, that we

have a tabular comparison of the offences and the prescriptions given for penalties

there and civil liabilities as well.

I wish to join in Sen. Drayton’s recommendation that we consider whistle-blowing

protection. I wish to broaden it beyond the parameters of her amendment to include an

exemption from liability for civil breach of contract issues, because her amendment

speaks to issues that deal with public sector and criminal liability. But we all know, Mr.

President, from the case law around the world that you often find companies coming

back on a counter suit in civil law for breach of certain confidences or breach of

contract issues and I think it important that we balance that issue.

640


Mr. President, I wish the hon. Minister to also tell us as to the state of reform

and the state of amendments, and the anxious amendments, that we should be

making to the winding up rules. The Companies Act, Chap. 81:01 of the Laws of

Trinidad and Tobago, in the Second Schedule, has incorporated the ancient

winding up rules which existed prior to the Companies Act being introduced into

our law. From my experience in the courts, I can say with certainty that the judges

in this jurisdiction are having a very hard time in making sense out of nonsense

because there is a conflict of laws happening when one considers the marriage of

the companies winding up rules with, for instance, actions under the Insurance

Act, actions under the FIA—and definitely that is going to be an issue which arises

under the SIA—and this securities 2012 law in particular. Therefore, we cannot

afford to limp with a large hole in the bucket carrying that water from the river, as

we do, to our homes, where the companies winding up rules are archaic and in

need of reform. That is met equally by the need for the hon. Minister to speak the

anxiety I hope the Government has in introducing administrative protection laws.

That is chapter 11 of our bankruptcy protection laws.

Because, Mr. President, it is a fact that courts require the opportunity to

protect investors by allowing for bankruptcy protection, and therefore, it is no

longer wise for us to rely simply upon receivership, liquidation and winding up to

reduce security holders to deposit insurance levels or contingency funds as this

Act proposes, a) when we know that the deposit insurance remuneration and

compensation is minuscule, and b) when we know we have a contingency and

compensation fund in Trinidad and Tobago that has, at least, as I am aware, never

paid out a black cent to anybody in this country—been collecting moneys all

along and not a single person in Trinidad and Tobago, as far as I am aware, has

ever been a beneficiary of that.

So we have people that have not been able to pursue money from what we call

“running down actions” where you get knocked down by a car and the insurance

company has no money, it has gone out of business, people are left stranded

without compensation. And equally in the securities industry, I think it incumbent

upon us to have a degree of contemplation of the inter-articulation of this law and

the parent Act—the Securities Act, 2012—with the need for administrative or

bankruptcy protection legislation. It is critical for us in this country if we wish to

truly become the golden entity that my learned colleagues have spoken to, that is

the destination of the best capital market in the Caribbean that Trinidad and

Tobago hopes to be, because we are certainly not. We are not there yet: not by our

volume and not by the confidence in the market.

641


So, Mr. President, if it is that we are going to committee stage tonight, then

there is a lot to be said. If it is that we take this Bill instead to a committee of the

Senate, I can undertake and promise stout participation by the Members of the

Opposition.

8.45 p.m.

We have suggested to the hon. Minister that the Special Select Committee, if

the Government is agreeable to it, comprise at least two members of the

Opposition, so that quorums can be maintained and that the business of the special

select committee would not be stymied by a lack of presence of any member and

that we would be happy to participate in broadening this issue. It would be my

preference, Mr. President, that this was a joint select committee, including

Members of the House of Representatives because they are the elected Members

of Parliament, Mr. President, and they have constituents to look after. And

therefore the interests that relate and flow through the House of Representatives is

always a material benefit to be included into select committees and my preference

would be for a joint select committee.

Mr. President, I wish to thank you for the opportunity of contributing to this

debate. I have kept it under 45 minutes. [Interruption] No, in my original

contribution to the Securities Act, 2012, I think I spoke for three minutes, so I

have clawed back some time but I hope that the hon. Minister—I was “bettered”

only by Sen. Prescott who reserved his right to continue into Committee stage.

But I do hope that the hon. Minister of Finance and the Economy has taken on

board the commitment of the Opposition to continue in advancing the laws of

Trinidad and Tobago to redound to the best benefit of Trinidad and Tobago.

I do hope that he will act with anxiety in causing personal interests of persons

named in the FCB issue to be cleared, or at least standards to be set coming out of

that FCB IPO situation. I do hope that he would urge the Leader of Government

Business, to produce before they retire from the Government, as they are now,

into the Opposition in the next Parliament, that they would produce at least, at

least some form of legislative agenda. I do hope that that legislative agenda will

have public procurement laws, for debate in this Senate, sometime before May

2015, and not only in the context for another government to be bound by it.

I do hope that the hon. Minister of Finance and the Economy—[Interruption]

Mr. President: Senator, I hope this winding up would not put you into a

bankruptcy protection. [Desk thumping and laughter]

642


Sen. F. Al-Rawi: The bankruptcy protection being to protect me from my

wager to have spoken on a short time, Mr. President, a short lease. But, Mr.

President, the last point being specifically that the hon. Minister of Finance and

the Economy, the good man that he is, Mr. President, would urge the Government

to halt the NGC project, the award for the Beetham wastewater project because it

reeks of difficulties and that we would have some relief for the citizens of this

country. I thank you, Mr. President. [Desk thumping]

Mr. President: Sen. Small.

Sen. David Small: Thank you, Mr. President, for the opportunity to

contribute to the debate on this Bill to amend the Securities Act, 2012. I have a

few points I want to make and I may not be as entertaining as my colleagues to

my right, but I think that I have one or two things that I would ask for your

attention.

When the hon. Minister of Finance and the Economy made his presentation,

he spoke to issues around the expansion of the capital market in the country and

spoke to several things that were happening and I wish to humbly suggest that if

he really wishes to see real growth in the expansion of the market, the

Government should consider ways to get the major energy companies in the

country to have a secondary listing here. And I really—and this is a pet issue for

me because Trinidad and Tobago often boasts of being in the oil and gas business

for over a hundred years, yet the only people who can invest and say that they

have a share in companies that extract our oil and our gas are people who do not

live here.

All over the world people can invest effectively in Trinidad and Tobago’s oil

and gas. Citizens of Trinidad and Tobago cannot invest because there is no

vehicle. And to the extent that we have an industry that contributes almost half of

GDP and no citizen of this country, no citizen of this country can invest in a share

or stock in a company that is extracting that resource, something has to be wrong

with that—has to be wrong. So I am not saying that anything else is wrong, but I

think that, that is the biggest, most obvious hanging fruit out there and I do not

expect it to be easy.

I am a consultant; the Government could engage me. I am sure I could find a

way to twist some arms. [Laughter] Because I believe that when you look at, you

know, the stock exchanges of other resource rich countries around the world,

those stock exchanges are dominated by companies that extract that resource—

whether those companies are domestic companies or international companies.

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You look at the Australian Stock Exchange and you see BHP Billiton and all sorts

of other companies. They dominate the stock exchange. Australia has oil—

sorry—it has gas, it has coal—and those companies—and all sorts of other

minerals. The stock exchange is dominated by companies that extract the natural

resource.

Here, the companies that extract the natural resources of our country, they are

nowhere on the stock exchange. Finance companies, banks, whatever, and I am

not saying those are bad businesses, those are fine but if we really want to make

sure that the national patrimony comes back to the citizens, then we need to find a

way. Start the conversation. If it does not go anywhere, at least someone could

say we really made an effort and it did not go anywhere. But successive

administrations have failed. And let me put it—successive administrations have

failed, have not tried, have not tried.

And it is something I wish to humbly and respectfully put on the Table for

consideration, for thought, and I believe that in moving that forward, that we have

to take the view that it is a national resource, it is being extracted and that if we do

not ask the question, we may not achieve anything. All I am saying is ask the

question and see what can come forward out of it.

Mr. President, one of the issues raised here, and Sen. Dr. Mahabir spoke to it

with a lot of eloquence, it is about closing gaps and loopholes in the laws. And he

went on to show that there were several people—Madoff, Stanford, Milken—all

sorts of people who found themselves in various levels of incarceration because of

their wrongdoings. And we here are charged with a responsibility for crafting

legislation and, as raised by my colleague, Sen. Vieira, we fail in the enforcement.

For all and sundry, it does not seem that white-collar crime exists in Trinidad

and Tobago because there is no—I struggle to see, to understand how many

people have actually been charged and are certainly serving any sentences for

white-collar crime. For all intents and purposes, having these things in the

legislation and then they are not being properly enforced; it may be an issue of

capacity. If that is the issue, let us address the issue of capacity and resources to

make sure that the laws that are on the books can be properly enforced. Okay? But

I believe that is something that needs to be addressed because if you put things on

the books and you do not enforce them, you engender a lackadaisical attitude.

You engender people feeling that well okay, it is there but if there is no penalty

being applied, then it is null and of no effect. A million dollars, $5 million fine—

fine. But if nobody is actually fined, or imprisoned, then it is just there. It is a

threat but it is just a hanging threat and it does not mean anything.

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Securities (Amdt.) Bill, 2013 Tuesday, March 11, 2014 [SEN. SMALL]

So I think that we need to find ways—for me in my own humble view, I think

that there is an issue of capacity; there is an issue of understanding how to really

have the people with the skill sets, and the ethical responsibilities, and the

thinking, to really drive this thing through the system and we have not done

enough in that area. I really think that it is something that we have to look at.

And there is something again that we have spoken about here, who protects

the small man? You know, I had an unfortunate investment experience, not as

similar as my colleague on the Opposition Benches. Several years ago when a

local national airline floated on the stock exchange, I was one of the wonderful

investors who bought shares. I have my original stock certificate. And I did it on

the basis that I was a frequent user of their services.

If you look at my frequent flyer number, it is 0000030. I was number 30 to

join their frequent flyer programme and I still—and I am one of the holdouts who

have never—I have refused to accept the cents on the dollar offer. I have just

decided to hold on to it, just have it in a frame at home and I have kept it. That is

an unfortunate investment experience. You invest in something, all sorts of things

happen, it gets out of control and then you lose your investment. And I cannot

claim to be a savvy investor but I invested on the basis that I thought it was a

going concern; it is a state entity; it will continue, and then things just went the

way it went.

So I have the original stock certificate and I am not going to do away with it.

All the offers that came in writing, I just threw them in the garbage and I shredded

them. I just hold on to it. That helps me to understand that, where is the protection

for the small investor? Who protects me? I have no idea what attorneys’ fees are

but I certainly cannot afford attorneys to go trying to chase down that matter. So

that is something that we need to keep in our radar.

But I also—it is important—heard in the debate here today about putting

levels, millions of dollars, creating effectively barriers to entry. And we need to

be careful about that because—I clearly understand the need to protect the small

investor, but there also needs to be an issue of making sure that you do not create

an artificial barrier that keeps out competitors and you create an oligopoly, as my

wonderful economics lecturer on my side would say. You have to be careful about

that.

So that, I am not saying that you can just allow anyone willy-nilly to come

into the business, but that needs to be closely managed and closely regulated

because you could have a situation where those who are already in it and are well-

645


entrenched, just continue to gobble the market and you have effectively kept

competitors out. So that, those things require a huge and a large amount of notice and

understanding how the markets work and then how you regulate those markets.

So I am not necessarily opposed to it, per se. I am saying that in doing that, we

need to make sure that we ensure that there is an appropriate level of competition

in the market. There must be competition and it must not be that when you put a

target there, it keeps people out, or other people from coming into the market,

while at the same time trying to make sure that those who come into the market are

sturdy enough to make sure that small investors, medium investors, large investors, are

protected.

You know, earlier in the debate, Sen. Drayton used a couple of words that she

said spoke to the incestuousness of the market system and how that could lead to

manipulation. We have all heard of the wonderful State bank and the issues with

that. And I do not want to go too much into that, but I believe that if someone had

really, you know—hindsight is 20/20, so I suppose this is an unfair position I am

putting on the table.

But I would have been much more comfortable, rather than having one single

citizen of Trinidad and Tobago owning half a million shares in a State-controlled

enterprise, if the Government had said, listen—there are extra shares—and the

Government will say listen, we give the opportunity to every citizen in Trinidad

and Tobago to own 250 shares and a concessionary loan is provided. And if you

had a 10 per cent take-up on that, you may have found yourself with 75,000 new

investors in the market, at nominal cost to the State.

You would have done two things: you could have mopped up some of the

excess liquidity in the market and then significantly broadened the investor base

in the country. So that the optics of that whole—and I should declare my interest.

I am actually a shareholder, so let me declare my interest upfront. But the optics

are cloudy; they are cloudy. And I am not saying anything is necessarily wrong or

illegal but just looking at it, I think that information that, as another person who

had the opportunity to invest more, I would have liked the opportunity. But I did

not have it. So why should somebody else have it? Something is not right there.

Sen. Dr. Mahabir: Because you are not an insider.

Sen. D. Small: Well, I am not an insider, but, I mean—so the optics, I believe

that—it is often, you know, there is an old saying: it is not what is done, it is how it is

done. And how it was done is not clear. And if it is not clear, people make

assumptions and when people make assumptions—well.

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Securities (Amdt.) Bill, 2013 Tuesday, March 11, 2014 [SEN. SMALL]

9.00 p.m.

I have one or two more little things I want to talk about. When I looked at the

legislation, I had a couple of little points I wanted to make. When we looked at, I think

it is clause 10, section 20, it has to do with the reporting of the reporting, where the

commission has four months to submit to the Minister and then the Minister has three

months to submit to Parliament, and then Parliament has 14 days to submit to the

public. If you really think about that, you are saying that at the end of the financial year

2014 and they have four months to give it to the Minister, then the Minister has three

months to submit it to Parliament and given the July/August break, you are talking

about the report not being public information until the ninth or tenth month of the year;

the horse may have bolted.

I am not saying that it is wrong, but I think in having an authority laying a report—

an audited report of its activities—that is only becoming public nine months hence, or

10 months hence, given the realities, I think that we need to find a way to shorten that.

We need to find a way to bring that closer up. I am not sure how we could do that, but I

think that needs to be looked at because four months plus three months, plus the

July/August parliamentary break take you into—then you are into budget. It may not

come up until the end of the year. So that by the time it becomes public and people start

to look at it, whatever transgressions or anything people could find, the horse has

already bolted, it has long gone. So, I think there needs to be some tightening of that.

Again, I go back to my issue of enforcement, under clause 9, section 18, subsection

(c) where it talks about conflict of interest. I have no problem with the wording as it is,

but I am asking if someone is on the commission and a conflict of interest has been

discovered, what is the penalty? So, you may find a conflict of interest; that person is

debarred from discussing on that particular matter, is asked to leave the room. Three

months later, it happens again; six months later it happens again; unless there is a

penalty, there is nothing to stop that person from intentionally omitting or just deciding

to not say that he or she has a conflict of interest.

So that there needs to be some sort of penalty in there to say, “Listen, at the first

instance you are suspended for three months” or something. I will leave it to the

attorneys to think of something that will work, but for me, as it sits, because there is no

penalty, you have a situation where somebody who is a commissioner, can have a

conflict of interest and if it is discovered, there is no penalty. I think that something is

wrong with that. There must be a penalty so that people feel the pressure that is “Hey, I

really need to make sure that if this matter comes up in front of me, everything is

kosher and everything is above board.” There needs to be some pressure and right

now, there is no pressure because there is no penalty.

647


I have one other point I want to make and it just kind of tied into something

that Sen. Al-Rawi spoke about. It is the reality of doing business in Trinidad and

Tobago. He made mention of 14 days as a time frame for something. I am saying,

listen, the reality of doing business in Trinidad and Tobago, given all the various

holidays, long weekends and so on, when you give someone seven days or 14

days, you really have to think about: is that enough time? I am thinking and

suggesting that—because the legislation is not consistent, some parts of it just

speaks to days and then some parts speak to business days. So that, perhaps, the

Minister of Finance and the Economy and the drafters, you should consider

business days so that if you tell somebody 14 business days they have some time,

given the reality how holidays fall in Trinidad and Tobago. I think that needs to

be looked at in the legislation because I have seen instances where in some places

it talks to business days and in other parts it just talks to days, which are calendar

days.

So, I think there needs to be some harmonization, but also some understanding

that the reality of doing business in Trinidad and Tobago is that you run into

cycles, long holiday weekends come up; the day before the holiday weekend you

cannot get anything done; the day after that people are now revving back up. You

lose days. So that when you have statutory time limits to get things done, giving

business days, I think, allows for some flexibility; it may stretch out a process, but

I believe it might be a fairer reflection of how things actually work in Trinidad

and Tobago.

So, Mr. President, with those few points, I think that I want to commend the

Government for really bringing these amendments to the table. I understand there

are several more, but I think that this piece of legislation is forward thinking; it is

moving us in the right direction to having a system where confidence is higher in

the system; people feel that if you come to do business here that the thing is

properly regulated. We need to do some things. When I say “we”, the State needs

to do something on this side to make sure that the systems are properly resourced

to really deliver on the things that are in the Act, but I think this is something that

is moving us in the right direction as a country and I am willing to support it.

Thank you very much, Mr. President, for this opportunity. [Desk thumping]

Sen. Elton Prescott SC: Thank you very much, Mr. President. I propose to

spend very little time, primarily because I am supportive of the steps taken by the

Government to date, to bring this piece of legislation before us and to regulate an

industry that is desperately in need of regulation.

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Securities (Amdt.) Bill, 2013 Tuesday, March 11, 2014 [SEN. PRESCOTT SC]

I fear, however, that the substantive nature of the parent Act and the very

many amendments that are now being proposed are really only going to be

justifiably addressed if we were to place these matters in the hands of a select

committee of the Senate. That is the purpose of my rising.

You may recall that I interrupted the Minister of Finance and the Economy at

a point where I thought he might have had an answer for me explaining some

steps that were to be taken and I realized that he would have had some difficulty

then. If it is his Bill and he was going to experience a difficulty—maybe he was

taken by surprise—could you imagine how much more difficult it is for all of us

here who have had to sit through all of the 177 sections of the Act with the

comparative amendments and attempt to make sense of all of it? It requires a

greater degree of study, in my view, and I do trust that the Government would

consider that we should present these matters before a select committee. There are

regulations in the Standing Orders that determine how long we should go on for

and the President can determine this.

So, my support for the Bill is measured, that there is need for a greater

intellectual stimulation supported by a wider selection of views from the

Members. I trust that will be the position that we will take this evening.

Thank you very much, Mr. President. [Desk thumping]


Thank you, Mr. President. Before actually dealing with the issue of moving to the

select committee, there are a few statements made which were, actually, not quite

correct and I thought it might be important that, perhaps, I correct the record. I

understand that there are a number of comments and a number of questions which

Members have which relate to the different clauses in the Bill, but because we intend to

go to a select committee—which we had advised Members on the other side of some

time ago—perhaps, I will leave that to be addressed by Members when we actually sit

in the committee, but, as I say, there are a few areas that I had identified that I needed to

address.

The first is that there was a statement made by one of the Members on the other

side about the fact that the advisor to the Governor of the Central Bank had been

terminated by the Minister when he was at First Citizens. In fact, the advisor to the

Central Bank now, Mr. Ramesh, had actually resigned from the position to pursue his

personal interest. So, I thought that, perhaps, that correction should be placed on the

Hansard given the statement that had been made about someone who is not present in

the Senate in respect of this particular matter. [Desk thumping]

649


In respect of the IPO for First Citizens, I would want to say, very categorically,

that, certainly, it is the intention of the Government to ensure that due process is

followed to ensure that nothing is said or done that could potentially, perhaps,

compromise the entire process as far as the overall investigation goes. I would

want to, perhaps, for the record—because it seems as if there may be a concern

that, perhaps, some of the regulatory organizations did not take the appropriate

action when they ought to have in respect of this particular matter. The

information that I have does not suggest that. The information that I have suggests

that as soon as the various regulatory organizations were informed of what had

happened that, in fact, the various organizations initiated their own action in

respect of identifying what had occurred and seeking to determine whether, in

fact, there was any breach of any process or of any law or regulation as currently

exists.

So, specifically, I know that the matter is engaging the attention of the SEC.

For example, I know that the stock exchange itself had started to look into the

matter and the Ministry of Finance and the Economy, as a shareholder, did ask

that an audit be done. The thing is that if I go back to the statements being made

by Sen. Dr. Mahabir, some time ago; earlier in his commentary, the case with Mr.

Rajaratnam actually took a little over a year before it came to the court and then it

took some time before it was actually adjudicated upon. And, that is in an

environment which is, perhaps, a little more sophisticated and, certainly, has a lot

more access to information, and have well developed processes as far as that is

concerned.

So, while I am not suggesting in any way that the SEC, or any other regulatory

organization, will take as long as two years or whatever, what I am trying to say is

that the process will take a bit of time to ensure that it is done in the right manner

and that appropriate action can be taken on the basis of the information that is

obtained and that the information is obtained having regard to due process.

So, I just wanted to say that for that entire matter, the intention is to ensure

that justice is done on all sides so those who are not guilty are shown to be not

guilty of any particular infraction and, therefore their good name is preserved, but

if there is any breach of any regulation, that it is dealt with in an appropriate

manner. So, I just wanted to make those two points that were very important.

Just two more points I needed to make which are in respect of Phoenix Park

itself; sorry, the IPO process. It is our intention, actually, to go to the next IPO,

being Phoenix Park, which is the one that we had announced as next in line, ahead

of the TTMF/HMB IPO. Therefore, just to correct—because it seemed as if the

650


statement suggested as if we were saying the next in line would have been TTMF.

The next in line is actually Phoenix Park which I understand the draft prospectus

has been developed and we are hopeful that we should be in a position, within the

next couple of months—[Desk thumping]—to be able to complete that; could do

an IPO for an energy sector company. It would be the first energy sector company

to be listed on the Trinidad and Tobago Stock Exchange.

One other correction, again, would be in respect of the stock exchange. Just to

correct the record, again, I did refer to the growth of 1997 to now and I was using

the baseline of the establishment of the commission as a baseline, but perhaps, if I

could use the change of Government as the baseline in 2010, I would say that

between then—at that time the stock exchange had a market capitalization of

approximately $71 billion and that had increased to $110 billion by September

2013. There was a growth of 54 per cent over the approximate four-year period

that we refer to. [Desk thumping] So, in fact, there was quite a substantial growth

in the stock exchange over that period of time.

9.15 p.m.

Finally, I do recognize the point that Sen. Prescott made concerning the fact that we

need to go joint select. I have to admit, when you did ask me the question I was not

even quite sure which clause you were referring to either. I think I was on a different

clause to the one you may have been referring to. I am not quite sure. I tried to locate it

in my notes, but could not locate it at the time to see if the clause you were

referring to, I may have had a separate comment on it but, anyway, the point is we

can certainly address those issues when we get into committee. I do accept the

point which was made that, in fact, we should go to a select committee with the

Bill so that we could do justice to the amendments that need to be made.

So with that, Mr. President, I would beg to move. I am not sure whether we

need to go into the second and third readings or whether I can simply move to

this.


Bill accordingly read a second time.

Sen. The Hon. L. Howai: Mr. President, in accordance with Standing Order 69(1),

I beg to move that a Bill entitled “An Act to amend the Securities Act, 2012”, be

referred to a special select committee of the Senate for consideration of its details, and

that this committee be required to report to the Senate by April 11, 2014.

651


Mr. President: Hon. Senators, before the question is put, I would like to

mention, as I understand it, it is Standing Order 51(1). There might have been a

later correction to your brief.


Sen. The Hon. L. Howai): Mr. President, I further beg to move that the

following Senators be appointed to serve on this special select committee: Mr.

Larry Howai, Chairman; Mr. Anand Ramlogan SC, Mr. Kevin Ramnarine, Mr.

Gerald Hadeed, Mr. Vasant Bharath, Mr. Faris Al-Rawi, Dr. Lester Henry, Mrs.

Helen Drayton, Mr. Elton Prescott SC.


ADJOURNMENT

The Minister of Justice (Sen. The Hon. Emmanuel George): Mr. President,

I beg to move that this Senate do now adjourn to next Tuesday, March 18, 2014,

when we expect to debate the next item on our agenda here, and which is listed on

today’s Order Paper having to do with the Dog Control Act, 2013.

Mr. President: I take it as 1.30 p.m.

Sen. The Hon. E. George: At 1.30 p.m. Thank you very much.


Mr. President: Before I adjourn this Senate, I am to remind you that, in fact,

we prepared dinner for you and it is ready. I did not break because I thought

perhaps Senators might prefer to continue without a break and, therefore, please

attend to your dinner before you leave this Senate.

Senate adjourned accordingly.

Adjourned at 9.20 p.m.

20140311, senate debate - tuesday march 11, 2014 - 1:30 p.m. of absence tuesday, march 11, 2014...

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