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Financial Services Commission Issues Cease Trade Order on Government Securities

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Avinash D. Persaud, Chairman of the FSC (?)

The decision by the Financial Services Commission (FSC) to suspend trading in government securities effective 5 July 2018, although routine based on government’s decision to default on debt, the implications will not be. If the unconfirmed news that Avinash Persaud is the Chairman of the FSC, it is understandable why Prime Minister Mia Mottley prefers a team player. The blogmaster understands the routine of the changing of the Boards once a new government or Minister takes charge although there is nothing that would have prevented his reappointment.

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116 responses to “Financial Services Commission Issues Cease Trade Order on Government Securities”

  1. Artax Avatar
    Artax

    “This would not necessarily lead to lay offs. Some of the senior officers can opt for early retirement; some can be offered suitable jobs in the Public service; others because of their expertise will find similar jobs in the Private sector.”

    Mr. Codrington

    I agree wholeheartedly with your suggestions and was about to mention some of them in a subsequent post.

    It is also ironic that Lynette Eastmond and the UPP articulated similar policies in their manifesto.

    However, I believe your comments definitely require further discussion.

  2. NorthernObserver Avatar
    NorthernObserver

    @BC
    I appreciate the SOE rationalization.
    I am confused as to how one CUTS expenditure, by re-posting within the public service?
    The ‘early retirement’ scenario, and switch to the Private Sector, does impact the expenses, while at the same time switching some from one expense account line entry to another? I am led to believe the Public Service does not have a formal pension body, they are funded out of what Barbados calls ‘the current account’. Is this true for the SOE’s as well?

  3. David Avatar
    David

    The issue of retirement (early) bring us to the vexing issue of pensions and rising pension expense in a market where rate of return is low made worse by an ageing population.

  4. Bernard Codrington Avatar
    Bernard Codrington

    Northern Observer at 1: 07 PM

    A very insightful submission. One that PUDYR would be proud of.

    As I would have mentioned in previous submissions there was no significant market in either bonds (stocks) and shares to justify the BSE’s establishment. It is a failed experiment. No fault of staff or the GoB.

    Investors held GoB bonds to maturity and rolled them over at maturity. GoB credit reputation was AAA. We always repaid our debts.
    There was little trading in shares. The original owners of the companies did not wish to dilute ownership. What little trading there was, was done on private put throughs …where the buyer was pre-approved. They were mostly pension funds ,insurance companies and investment managers. etc.

  5. Bernard Codrington Avatar
    Bernard Codrington

    @ Northern at 1 :45 PM

    Most SOEs would have had their own pension schemes. After 1975 an integrated pension scheme would have come into place. Integrated in the sense of transferring pensions to the National Pension Scheme. Private pension schemes where they existed would reduce their pensions by the NIS component. Short answer :they should not be a charge on the Consolidated Funds of G o B.

  6. David Avatar
    David

    @Bernard

    Are these Defined Pension Plans you are talking about?

  7. Hal Austin Avatar
    Hal Austin

    What is a defined pension plan?

  8. millertheanunnaki Avatar
    millertheanunnaki

    @ Artax July 20, 2018 12:27 PM

    Not a word on the future of CBC? On this IMF- controlled-restructuring occasion around the State will be forced to get this politically-partisan propaganda monkey of its back.

    What about the BADMC and the other state agencies involved in the agricultural sector?
    Given the parlous state of agriculture in Barbados can a good case be made out to justify the continuing existence of these parasitic State-owned and managed organizations which operate more like fiscal pests than agricultural enablers?

    The divestment of the BWA would make good commercial sense with the credit unions ‘targeted’ as one of the big recipients of a real good investment opportunity.

    What we need to see in order to make informed decisions about the future of these SOEs is the report which commissioned since December 2013.

    How many of these SOEs have up-to-date financials? For that reason alone they ought to be closed down immediately in order to get rid of the calcified management; even if some important functions have to be carried out under some other more efficient’ entity in the same public sector or outsourced to the private sector.

  9. Bernard Codrington Avatar
    Bernard Codrington

    @ David BU

    I cannot speak specifically on any one institution’s pension scheme/arrangement. The staff of each institution would have been informed by their Human resource about their pension arrangements.
    Some people might be able to draw two pensions…NIS and private pensions .
    The integrated model would be the mode.

  10. Hal Austin Avatar
    Hal Austin

    What do we mean by a defined pension plan?

  11. NorthernObserver Avatar
    NorthernObserver

    @BC
    you would appear to be suggesting, this common notion of “offering shares to the public” in the transformation of certain entities is a waste of time and money. That beyond BMLAS where the ‘policyholders were the owners’, Bajans prefer to keep their money in bank accounts. I was “told” that post de-mutualization, many sold off their new shares, as they now could monetize value instantly versus the former situation.
    Certainly the existence of the BSE hasn’t lured large private operations to “go public”. And even those already public appear to have some inconsistent strategies. I see GEL had a 4:1 split, for stated reasons (affordability) that seem to run counter to their large share buy-backs in recent years. As long as the BSE fees are such, buying shares in small quantities makes no sense.
    Thoughts on a Caribbean Stock Exchange?

  12. Hants Avatar
    Hants

    @ Bernard Codrington who wrote ” Man, spin me a more interesting story nuh.”

    FCIB records net profit of $43.9M for second quarter

    https://www.barbadosadvocate.com/business/business-monday-%E2%80%98strong-results%E2%80%99

  13. pieceuhderockyeahright Avatar
    pieceuhderockyeahright

    While the only connection with the issue that I am blogging in this submission is that in the case of Barbados, our Luminary Jeff Cumberbatch served on both the FTC and the FSC and would hope that the article would be accepted in that light.

    I would like to remark on the detail related to the practical operations of our FTC specifically regarding their dissemination policy and practice.

    De ole man like he fixated on Jamaica causing I does use dem in everyting nowadays. e.g. the Integrity Legislation fiasco dat going on in barbados under Mia’s version of the 1933 enabling act

    For ease of reference take a look at

    https://www.ftc.gov.bb/index.php?option=com_content&task=view&id=19&Itemid=46

    and then look at

    https://jftc.gov.jm/enforcement/judgments/

    or

    https://jftc.gov.jm/wp-content/uploads/2017/08/Case-No.-6529-Tank-Weld-Metals-Limited.pdf

    What will be evident as you review the materials disseminated by our local FTC and that of the Jamaican counterpart is that, in addition to the fact that they seem to believe in Freedom of Information (notwithstanding a few redactions) over the same ten year period they have matters by a range of consumers both individuals and corporate entities.

    While our FTC ent got one case NOT ONE EFFING CASE which mean dat dere is no consumers with any matters against any entity dem does monitor OR INCREDULOUSLY not one case in all dem years EVAH met the means test to become a matter of public record

    But den again with all de Samsung Galaxy phones dat get share way and the family plans (Jeff you is a man of integrity so you ent get any) we can understand why there were no matters or decisions on thier records

  14. pieceuhderockyeahright Avatar
    pieceuhderockyeahright

    @ the Honourable Blogmaster your assistance with an article comparing the FOIA practices of the FTC in Barbados and that of Jamaica sole HCF (highest common Factor with FSC being Mr. Jeff Cumberbatch)

  15. Hal Austin Avatar
    Hal Austin

    I am still waiting to hear what is a defined pension plan.

  16. David Avatar
    David

    https://www.investopedia.com/terms/d/definedbenefitpensionplan.asp

  17. NorthernObserver Avatar
    NorthernObserver

    there can also be defined contribution…

  18. John Carter Avatar
    John Carter

    What next for Avinash? Deputy Prime Minister? There is a certain preoccupation with this gentleman. Earned alot from that Paradise project but delivered nothing for the people of Barbados. He is a debt restructuring consultant; a consultant on IMF negotiations. What next?

  19. NorthernObserver Avatar
    NorthernObserver

    @TI
    the last administration changed the rules, and allowed Banks to set the interest rates. The reason for this, is by allowing those rates to slide down, it made the GoB rate on its fixed income instruments look very good. The objective was to entice Barbadians to move money from Bank Accounts into GoB instruments, withOUT GoB having to offer 8% or more. It didn’t work very well. Reverse the rules, and the savings rates will rise again.

  20. Hal Austin Avatar
    Hal Austin

    Northern Observer,

    What is a defined pension plan?

  21. Artax Avatar
    Artax

    “The divestment of the BWA would make good commercial sense with the credit unions ‘targeted’ as one of the big recipients of a real good investment opportunity.”

    Miller

    I don’t believe the BWA should be privatised. That’s just MY opinion.

    The reality of the situation is both BLP and DLP administrations did not have any definitive water resources plans or policies for the BWA, but continued to blame each other for it reoccurring failures.

    The former Owen Arthur led BLP administration brokered a questionable deal with Bizzy Williams re the desalination plant in Spring Garden and the former inept DLP administration idea of modernizing the Authority, was to build a new headquarters, under questionable circumstances, which will continue to cost taxpayers millions of dollars for a number of years.

    Management was also another failure as well as the intervention of the trade unions that “sanctioned” some unnecessary and unreasonable overtime related expenses.

    Can you imagine that “burst pipes” are allowed run, wasting gallons of water, because employees see this as an opportunity to earn overtime, which they also seem to believe is an entitlement?

    And I even bother to comment on David Estwick abysmal tenure as minister responsible for the Authority and Atlee Brathwaite who was rewarded for his ineptitude as chairman, by having some section of the new headquarters named after him.

    All the BWA requires is proper management.

  22. David Avatar
    David

    @Northern Observer and A Dullard

    Barbados from all reports seem to have a preference for defined benefit plans compared to contributions. Do we agree?

  23. Dentistry Whisperer (M. Pharm. D) LinkedIN Avatar
    Dentistry Whisperer (M. Pharm. D) LinkedIN

    Can you see changes coming at VOB? Was that not a “the grab” of a drowning man …David Ellis and the PM’s interview? Who got the most direct camera shots? Moreover, “down-to-brass-tacks” the day after, was all centred around the “drowning man”. Haynes Darlington.P.S. Put this on the back burner, please. At Harvard we call it “The Peter Principle” . Reaching the level of incompetence. 

  24. Artax Avatar
    Artax

    “A defined-benefit plan is an employer-sponsored retirement plan where employee benefits are computed using a formula that considers several factors, such as length of employment and salary history.”@$$|$|€$|||&|&&&||&|&&s||||&333

  25. Hal Austin Avatar
    Hal Austin

    I am keen to know what is a defined pension plan.

  26. David Avatar
    David

    You continue to make your self an ass on the blog. Clearly the original comment dropped the word benefit and it was subsequently clarified . You carry on smartly. Have the last word.

  27. Hal Austin Avatar
    Hal Austin

    I do not believe ‘benefit’ was dropped. It is typical of the nonsense you say when you intervene in discussions you know nothing about. I can easily mention others. Then you often add to this by backing people who have got things wrong. You set the standards.

  28. David Avatar
    David

    You are a ‘buffoon’.

  29. Hants Avatar
    Hants

    ” Chief of Staff of the Barbados Defence Force (BDF), Colonel Glyne Grannum, said the 958 Series patrol craft was a gift from the People’s Republic of China.”

  30. Artax Avatar
    Artax

    David BU

    While reading through, I realized a one of the usual sarcastic questions was asked and you guys deliberately ignored it.

    But could we not describe the method government uses to calculate and payment of pensions to retired “appointed” civil servants as based on similar principles of the “defined benefits” method?

  31. David Avatar
    David

    @Artax

    This buffoon has no idea the work required on the blog. He is of the view we are all retired like he his with time on our hands. We all make errors in scribing comments, however, meaning can be gleaned from context. When the error was made Northern Observer chimed in and added that there is also defined contributions. The point is that if he meant well he would have clarified and added to the discussion. Instead his Rh purpose on the blog, and a few others, is to embarrass the blogmaster et al every opportunity he gets.

    We have discussed this matter before on a blog dealing with the Appropriations Bill. The blogmaster thought it useful to raise it here given that oversight of pensions fall under the responsibility of the FSC.

  32. Hal Austin Avatar
    Hal Austin

    It is your way of hitting back for your usual ignorance of discussions you always intervene with no proper understanding. A Bajan tantrum. You do it almost every day. One of the weakest, if not the weakest, contributors on BU.

  33. David Avatar
    David

    @Artax

    The blogmaster is no actuary. We know that pension management is a complex business. What we know is that this is a matter that requires some attention for the several reasons discussed on the blog and others posted.

  34. Artax Avatar
    Artax

    David BU

    I believe you made a simple mistake.

    But they are some people who believe they are perfect, know everything and cannot make mistakes.

  35. Hants Avatar
    Hants

    Barbados Coast Guard to the rescue.

    ” After being stranded at sea for more than five hours, hundreds of passengers aboard the MV Dream Chaser returned to land just after 7 a.m. today.

    ” Two Coast Guard vessels and the Jolly Roger offered assistance.”

  36. TheoGazerts Avatar
    TheoGazerts

    @NorthernObserver
    I look forward to your comments on BSE, but they are too terse and intermittent. Perhaps, you can give us a post on this. It may not get many comments, but it would be appreciated and enjoyed.

    BSE is a site that I visit often, but hesitate to wet my beak. I often wonder how with so few transactions how brokers make money.

    A chance to educate.

  37. Mariposa Avatar
    Mariposa

    It is obvious that five years of this govt is going to stretch David nerves to the limit
    His obvious attacks are the warning signs
    Now if a contributor cannot asked a simple question without being a ” buffoon” it goes to the mindset of the person lashing (out ) undergoing unbearable stress and may indeed needs time for a long vacation
    David has left his blp yardfowl feathers scattered all over Bu and his alligence seems to be more in allignment to protect this govt from crticism a govt who has placed barbados in a perilous state of social dislocation

  38. Mariposa Avatar
    Mariposa

    How is it that Mia is reaching out to the business sector when certain sectors are looking for solutions for them having to get credit funding for goods being bought in Canada.
    This PR gimmick by Mottley can only gi so far when the realities of the default hits all in the pocket
    People are screaming about the Banks fees but what can be considered is that govt debt default in some way might have been involved in the decision making

  39. Bernard Codrington Avatar
    Bernard Codrington

    @ Hal
    @David BU

    Most of us come on the Blog to exchange ideas,get information and to learn. There is no harm in not knowing. The harm comes when we know that we know not and pretend that we do.
    For most of us our ego is not tied up with our ignorance. Ignorance cannot define who we are ; but to remain ignorant will.We are all grown men and we will make errors. Some times ,especially on this blog, the precursive coding over-corrects.

    But as David says, very often we know what the blogger intends from the context.

  40. millertheanunnaki Avatar
    millertheanunnaki

    @ David July 21, 2018 8:02 AM

    You are being rather ‘magnanimously reserved’ in describing that blindingly perfect ass of a schoolmarm whose pedantic nitpicking attitude leaves all to be expected of a pure poor black Johnny giving perfect meaning to the old Bajan that a likcle leaning is a dangerous thing.

    We can only assume he is rehearsing on BU to be the perfect Bajan-Limey replacement in the double act of Statler and Waldorf.

    That pure-bred idiot knows exactly what was meant; but being a fallen star of a seasoned certified financial journalist around which every planet of knowledge once revolved he, as usual, tried to play the puerile game of one-upmanship.

    Bush Tea warned us long ago about Shallow Hal’s antecedents stretching back to his Billy Bunter school days. Now what else could Bush Tea add in trying to “define” this curmudgeon of risible character?

  41. Bernard Codrington Avatar
    Bernard Codrington

    Generally this is a good blog. The level of tolerance is very high. Let us cut out the one -up-man-ship games.

  42. Mariposa Avatar
    Mariposa

    Amm just like Mia is stretching to connect bajans to a culture which involves drug king pins known as Bounty Hunters which Mia seems to show affection and most comfortable to be in their company

  43. Wily Coyote Avatar
    Wily Coyote

    I cannot understand the ignorance of BU bloggers about the various pension plans in general use today and in the past. Older generation employees generally enjoyed DEFINED BENEFIT PENSION PLANS(DBPP) and the newer generation Emplyees DEFINED CONTRIBUTION BENEFIT PLANS(DCBP). The DBPP of old were good employee plans and were generally indexed, payouts were geared to inflation. These plans have generally fallen out of favour in recent years due to inflationary costs, employees living longer, return on investment opportunities and the fact the employer is ultimately responsible to keep the plan viable. The newer DCPP can also be good for employees, however their optional participation in the plan must be dedicated. The plan is organized such that payouts are solely based on amount of funds in the plan and the investment of these funds. The employer is not responsible financially for the viability of the plan in the long term.

    DBPP is generally used for GOB plans and is integrated with NIS payouts, these type plans demand dedicated seperate management and investment by the employer to ensure the plan is viable in the long term. These plans typically have thier own identified accounts and are not integrated into general government revolving funds as is the case in Barbados. The consequences of this is that your pension plan is now subject the defaults risk of the sovergien state finances. If the state finances fail the your pension plan also fails.

  44. Artax Avatar
    Artax

    Given the frequency of your contributions, “It is obvious that five years of this govt is going to stretch your nerves to the limit.”

    Your fascination with Mia Mottley is uncanny. I’m wondering if the main Mariposa character is Maureen Holder.

    Wuh, shiite, when Mottley was Opposition Leader, she was living in your head, rent free.

    Now she has become Prime Minister, based on the amount of posts you dedicate to her, repeatedly with the same criticisms contained therein, irrespective of if the article focuses on government……

    ……is a clear indication that you GRANTED Mottley PERMANENT RESIDENCE STATUS in your head.

  45. Bernard Codrington Avatar
    Bernard Codrington

    My understanding is that persons who joined the public service after 1975 are entitled to a NIS pension only. And that GOB, like the private sector, is responsible for paying to the NIS GoB employer’s contribution plus the employees’ contribution which it deducts.

    Public pensions should no longer be a charge on the GoB’s Consolidated Fund.

    A problem can only arise if the GoB does not shoulder its fiduciary responsibilities. In fact if it does not, it will put employees in the Private Sector pensions at risk also.

    In passing the NIS is a defined benefit pension plan. The pension employs a formula similar to the former public pension scheme.

    Of course demographic changes can endanger or enhance the NIS scheme. A factor alluded to by David BU. Remember the Guyanese migrants that were sent back home ?

  46. millertheanunnaki Avatar
    millertheanunnaki

    @ Artax July 21, 2018 5:49 AM
    “Can you imagine that “burst pipes” are allowed run, wasting gallons of water, because employees see this as an opportunity to earn overtime, which they also seem to believe is an entitlement?
    And I even bother to comment on David Estwick abysmal tenure as minister responsible for the Authority and Atlee Brathwaite who was rewarded for his ineptitude as chairman, by having some section of the new headquarters named after him.
    All the BWA requires is proper management.”

    Artax, you have argued a seemingly convincing case to protect the BWA from divestment (to use a politically acceptable word as opposed to the more politically charged one of ‘Privatization’).

    But in so presenting your case to defend the current status f ownership you have unwittingly submitted more than sufficient evidence for change in the ownership, managerial and operational status of the BWA.

    It is precisely because of stark political interference in the day-to-day management and its woefully incompetent and unprofessional management that the BWA has to face the music of change.
    And it has to be done either under an ‘agreed’ proactive divestment programme or be forced to do just that; and if further delayed, most likely, under the aegis of a foreign entity for a mess of forex to keep Barbados afloat until the next wave of hunger to feed the beast of conspicuous consumption or pay off foreign debts.

    The divestment of the BWA- like the rest of utilities on the Island- has been a long-time ‘request’ of the IMF to improve operational efficiency and facilitate a wider (comprehensive) programme of economic restructuring.

    Why do you think the BWA was placed (as a token compromise to the IMF) under the FTC on the same footing as the other now foreign-owned utilities except the Natural Gas Corporation (for the time being)?

    That is what is called preparing the ‘divestment’ wicket for private sector players to bowl and bat on with the FTC being the umpire.

    On this pending occasion of the IMF’s involvement in setting the fiscal rules before you can get balance of payments support there is no escaping the inevitable divestment of the supply of water and the management of sewage and waste-both liquid and solid.

    That, for sure, must represent a major part of the new administration’s three-part programme to save Barbados fiscal heart attack and economic implosion.

    PM MAM could dipsy-doodle, hop and skip around the inevitable ‘divestment’ of the BWA as much as she could try to do; but just like the rest of the SOEs, its days are numbered given its indebtedness and management paralysis in spite of the recent physical reenergizing of the standard operating tank cleaning and maintenance routine.

  47. Bernard Codrington Avatar
    Bernard Codrington

    @ Miller at 11:09 AM

    You are providing a lot of food for thought. You are seeing farther down the road than most of us. I hope the powers that be re-engineer the management of BWA with the same level of success as they did the tank at the Bridgetown Sewerage Plant.

    Should this not be done toute de suite , I know who to blame for our recolonization.

  48. Artax Avatar
    Artax

    Miller

    I agree that some SOE should be privatised, but they are others that should remain government controlled…..and I believe BWA is one.

    The time has come for political parties to an end to recruiting the proverbial “square pegs in round holes.”

    The former inept DLP administration appointed a bank loans officer to manage the Transport Board, a mobile phone salesman is overseeing the BWA; a trade unionist is director of UDC, the more qualified individual to manage the BRA was reported to receiving a salary while at home and a lawyer is director of the Financial Intelligence Unit…… these are just a few examples of “square pegs.”

    SOE are more or less quasi government, and similar to the private sector individuals with requisite qualifications and experience should be recruited to manage these entities and their contracts should be tied to productivity, rather on than the politician you know or the party you support.

    If this was the case, Sandra Forde would have probably lasted at TB for 6 months….but she is/was a secretary of the DLP, and this was probably her “pass go and collect $200” card.

    Management and productivity.

  49. David Avatar
    David

    Thanks Wily, a good comment.

  50. David Avatar
    David

    @Bernard

    To add a little more to you comment. We have many highly qualified BU commenters that water down comments posted to protect their identities.

The blogmaster invites you to join the discussion.

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