The Barbados Stock Exchange (BSE) is a leading regional bourse that has attracted the attention of investors from around the world. Having enjoyed a banner year in 2019, the BSE is set for even higher profitability and trading volumes in 2020, says CEO Marlon Yarde. In this interview Mr. Yarde discusses BSE’s global expansion through strategic partnerships with other exchanges such as the London Stock Exchange, its foray into new digital assets such as blockchain, and the new program to support the entry of SMEs onto the bourse

What is Barbados Stock Exchange’s mission and vision?

Our mission is to be a long-lasting Caribbean institution, facilitating wealth creation on an efficient and cost-effective exchange. We want to create a platform that is world class. We use world-class technology and we want to do it in the most effective and efficient way possible. We are very cognizant of the developments in the financial technology area, for example in the blockchain space, and we have developed a body of rules to be able to list and trade digital assets. So we are making ourselves available to participants in the market place who are interested in getting into that space.

From a global perspective, we started the international securities market, with the aim of ensuring that we reached the international market. And over the years, we have been developing relationships and alliances with other stock exchanges. We have an MOC (memorandum of co-operation) in place with the Ghana stock exchange, the London Stock Exchange and most recently the Nairobi Stock Exchange. Last year we got recognition from the HRMC as a designated stock exchange and we are working on the application to Revenue Canada to be designated as a recognized stock exchange in Canada. Plans are also underway for the US market to be recognized as an overseas exchange. And the other jurisdiction we want to have a relationship with is Hong Kong, so that we can tap into the Southeast Asian market as well.

So, we intend to focus on the local and regional market but more importantly, the international market. Our first foray into Europe was through the UK. But we recognized the size and impact that the German economy has on world markets and our next step is to see how we can develop relationships in mainland Europe through Germany.

How has your performance been in 2019 and what is your outlook for 2020?

2019 was a very good year for us. As a matter of fact we had some major transactions. We are able to facilitate these types of large and complicated transactions, working jointly with international exchanges, particularly the Toronto Stock Exchange and the Canadian Securities Depository. As a consequence, our trading volumes were significantly above the previous years and we were in a very profitable position for 2019. For 2020, we anticipate equal performance due to other major transactions, and we expect profitability, trading volume and values to exceed 2019.

We are in the process of changing our trading system and expect to have it functional by September of this year. So that is a major initiative for us. On the international side we will continue to promote and market our exchange at various conferences around the world, particularly to showcase what we are doing in the digital asset and blockchain space.

What is the overall impact of the BSE on the Barbados economy?

I’ve spoken about our international strategy. Locally, one of the things we want to revitalize is our junior market, which we re-branded in July, 2019 to the innovation and growth market – innovation because it is targeted towards SMEs in Barbados and across the region. And the whole idea behind that is to give SMEs the chance to raise capital and develop their businesses into larger ones. As we all know SMEs provide the bulk of employment and economic activity in any economy.

This year we are intent on working with the Ministry of Small Business, Entrepreneurship and Commerce to develop SMEs in Barbados. We are developing a program similar to the elite program on the London Stock Exchange. It’s an incubator-type program which has three phases. The first phase is the sensitization and education phase, where we go out to the market and work with other strategic partners that cater to SMEs. That’s about a three-month process. Next is the capacity and diagnostic-building phase. This allows us to identify if these companies can truly meet the standards of listed companies from a regulatory perspective.

And then the final stage, which will come after six months, is the listing and raising capital phase. After we have identified all the gaps, such as gaps in internal controls, governance structure or in the skills required to manage and direct a company that is going to be listed on the exchange, we try to bridge those gaps and once a company has gone through that phase, we anticipate that they will move on to the next phase, which is raising capital and listing on the stock exchange.

Our target is to have about 20 companies list through this program. Obviously there are well established companies who we would like to attract. And we will be meeting them and going over what their needs are from a financial perspective and encourage them to look for equity financing and list in the stock exchange.