On April 2, 2009, Ja­maica es­tab­lished a Ju­nior Mar­ket for small and medi­um en­ter­pris­es (SMEs) and a sub-set of the JSE. A dozen com­pa­nies are now list­ed on the Ju­nior Mar­ket. The in­tent is to add three more by year's and even more in 2012. The Ju­nior Mar­ket did well dur­ing the glob­al down­turn, with an over­all in­vest­ment re­turn for 2010 of 37 per cent and has pro­vid­ed a way to cre­ate eq­ui­ty in­vest­ing op­por­tu­ni­ties for small­er busi­ness­es. The first Ju­nior Mar­ket list­ing was on Oc­to­ber 2009. Mar­lene Street-For­rest, gen­er­al man­ag­er and the JSE's com­pa­ny sec­re­tary, pro­posed the es­tab­lish­ment of the Ju­nior Mar­ket, ac­cord­ing to a No­vem­ber 2008 re­port. The idea was to en­cour­age do­mes­tic in­vest­ment in en­tre­pre­neur­ship, em­ploy­ment and eco­nom­ic de­vel­op­ment.

"The ex­change has re­ceived feed­back from var­i­ous mem­ber deal­ers in­di­cat­ing that there is a de­mand for the fa­cil­i­ty and, as a re­sult, it has com­mit­ted to en­sur­ing that there are a suf­fi­cient num­ber of new list­ings with­in the first year of im­ple­men­ta­tion. Ju­nior mar­kets gen­er­al­ly al­low in­vestors to put cap­i­tal in­to le­git­i­mate small and medi­um-sized com­pa­nies (SMEs) that are list­ed. The ad­di­tion of the JSE Ju­nior Mar­ket to Ja­maica rep­re­sents an ex­cit­ing new op­por­tu­ni­ty for lo­cal (and Cari­com) SMEs to raise cap­i­tal, and for in­vestors to par­tic­i­pate in both the Ju­nior Mar­ket and for the growth and de­vel­op­ment of the lo­cal econ­o­my," For­rest wrote.

Ap­pli­ca­tion for list­ing

With­in 15 days af­ter al­lot­ments, a re­quest for list­ing must be made to the JSE. The ex­change will de­vel­op the fol­low­ing stan­dard form "shelf" doc­u­ments which will be made avail­able to prospec­tive Ju­nior Mar­ket com­pa­nies for com­ple­tion and sub­mis­sion:

• Prospec­tus

• List­ing agree­ment

• List­ing ap­pli­ca­tion

• Spec­i­men share cer­tifi­cate

• Res­o­lu­tion of both di­rec­tors and share­hold­ers au­tho­ris­ing the list­ing

• Let­ter from com­pa­ny sec­re­tary or le­gal coun­sel, con­firm­ing com­pli­ance with the ar­ti­cles of as­so­ci­a­tion

• Let­ter from com­pa­ny sec­re­tary or le­gal coun­sel, con­firm­ing com­pli­ance with the re­quire­ments for list­ing on the Ju­nior Mar­ket com­pa­ny gen­er­al­ly.

An­nu­al re­ports and ac­counts

For the pur­pose of trans­paren­cy, each Ju­nior Mar­ket com­pa­ny will be re­quired to un­der­take an an­nu­al statu­to­ry au­dit. In ad­di­tion, each Ju­nior Mar­ket com­pa­ny will be re­quired to re­port on a quar­ter­ly and an­nu­al ba­sis. Both of these re­quire­ments are in keep­ing with those for list­ed com­pa­nies on main ex­change.

List­ing fees

Charges for the list­ing of a com­pa­ny's se­cu­ri­ties com­prise an ini­tial list­ing fee, an an­nu­al fee and sup­ple­men­tary fee. These fees will be up to 50 per cent low­er than com­pa­ra­ble fees on the main ex­change.

Tax­a­tion is­sues

SME will be at­tract­ed to the Ju­nior Mar­ket based on the lev­el of sup­port that the gov­ern­ment, act­ing through the Min­istry of Fi­nance, has com­mit­ted to pro­vide to them. This sup­port in­cludes a tax in­cen­tive for an al­low­able pe­ri­od not ex­ceed­ing ten years from the date of list­ing on the JSE Ju­nior Mar­ket, to be im­ple­ment­ed as fol­lows:

• A full in­come tax hol­i­day for half of the al­lowed in­cen­tive pe­ri­od af­ter list­ing

• A half in­come tax hol­i­day for the sec­ond half of the al­lowed in­cen­tive pe­ri­od

• An ex­emp­tion from tax on div­i­dends or oth­er dis­tri­b­u­tions by Ju­nior Mar­kets

• If a com­pa­ny ex­ceeds its max­i­mum mar­ket cap­i­tal­i­sa­tion of US$5.82 mil­lion, it is re­quired to list on the main JSE board

• If the com­pa­ny delists with­in 15 years of be­ing list­ed on the com­bined Ju­nior Mar­ket and main ex­changes, it will be re­quired to re­pay to the gov­ern­ment the tax ben­e­fits en­joyed dur­ing this pe­ri­od

Delist­ing of com­pa­nies

In ad­di­tion to the gen­er­al rules re­lat­ing to delist­ing from the main ex­change, the fol­low­ing mat­ters will al­so re­sult in the sus­pen­sion and/or delist­ing of a Ju­nior Mar­ket com­pa­ny's se­cu­ri­ties:

• If the men­tor to the com­pa­ny re­signs and no re­place­ment is in­sti­tut­ed with­in 30 days

• If the men­tor fails to be "fit and prop­er"

• If the mar­ket cap­i­tal­i­sa­tion of the com­pa­ny in­creas­es above the $500 mil­lion max­i­mum thresh­old re­quired to be list­ed on the Ju­nior Mar­ket

May­ber­ry In­vest­ments Ltd

May­ber­ry In­vest­ments Ltd, is the lead bro­ker­age house in bring­ing SMEs to mar­ket has, to date, an 88 per cent record or, put an­oth­er way, nine out of 11 list­ed SMEs, with Caribbean Pro­duc­ers Ja­maica Ltd (CPJ) be­ing the lat­est. The JSE's Street-For­rest said in Ju­ly that a to­tal of US$0.02 bil­lion has been raised by SMEs' list­ing and that if an in­vestor had bought shares in all of the ten pre­vi­ous­ly list­ed com­pa­nies, he or she would have seen re­turns of more than 300 per cent.