Be Wary of Financial Fraud…

Be Wary of Financial Fraud this Christmas

financial fraud

‘Tis the season to be jolly, not depressed and shedding tears of frustration. Ensure you are guarded against financial fraud and scams. Did you know that many victims of investment fraud are people whom you would least expect? Among those who have been defrauded are professionals and persons who have some familiarity with financial products.

One of the most popular scams that is gaining traction in Trinidad and Tobago is identity fraud. Con artists target millions of victims on the internet by posing as alias businesses and names, and sending out emails aimed at coercing you into revealing your financial information. Another popular scam is the ‘Boiler Room Scam’ where you get a phone call from a random individual offering you a ‘chance of a lifetime’ to make lots of money.  As long as new people keep buying, the value of the stock goes up.  Eventually people stop buying and start selling and the stock price falls because it had no real value. You end up losing all of your money. I’m sure this is not how you would like to spend your holiday.

So the question now is, how do you protect yourself? Continue reading

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10 ways you may be scammed

Be vigilant this Christmas, Fraudsters are out there! 10 ways to tell if you’re being scammed

Christmas scams

Many of us are looking to get cash quickly this Christmas, seeking out the best deals with great returns; or you may be looking forward to that end-of-year bonus and want to place your money, in investment instruments which you believe will help achieve your life-long goals. However in our quest to find great investment opportunities for our money, some of us tend to fall victim to fraudulent investment schemes.

The Trinidad and Tobago Securities and Exchange Commission (TTSEC) was established to regulate the securities industry and help investors and potential investors like you, make wise investment choices. We want you to exercise your due diligence by being aware of some of the tricks that fraudsters may try on you.

Here are some key phrases you can look out for:

Continue reading

Investing 101 Part 2

Last time we discussed the basics for deciding what the best investment fit is for you and your objectives for investing. The following article will help guide your process for establishing an investment option.  It is now time to visit a registered financial advisor/broker.

The first question that you must ask yourself is “which investment product(s) should I use?” Warren Buffet, famous philanthropist and one of the world’s richest men always says “Don’t put all your eggs in one basket” and he is indeed right. We recommend using a multi-faceted approach to investing so that if something goes wrong with one product, you don’t lose all of your money.

The three major types of investment products which the TTSEC regulates and which you can consider are:

  • Equities (stocks/shares)
  • Bonds
  • Mutual funds

Here is a simplified explanation of these investment products:

Continue reading

Are you too young to plan for your retirement?

Many persons who are under 40 years old have not yet begun planning for retirement. However, is there such a thing as “too young to plan for retirement?” Does “the early bird catch the worm? The earlier you start to plan for retirement the more prepared and at ease you will ultimately be. Here are some helpful tips to help you grow your financial wealth and ensure that your retirement years will be well cushioned. Continue reading

The TTSEC : Regulating the securities industry so that you can invest with confidence

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Educate and empower yourself! If in doubt, contact the TTSEC!

The Trinidad and Tobago Securities and Exchange Commission remains dedicated to the promotion of investor confidence, fairness and the orderly growth of the local capital market. This is primarily achieved through the ongoing development of a regulatory system that is geared toward ensuring a high degree of investor protection as well as building enforcement capacity to ensure the preservation of market integrity. We have been, and will continue to be, guided by a concern for the protection of investors and the maintenance of investor confidence.

Here is a summary of how we protect you:

We ensure that all persons/entities desirous of dealing in securities are registered with us. A list of registrants is available on our website www.ttsec.org.tt: we advise you to check this list before engaging in any securities transactions. Both the seller and the security itself must be registered with the TTSEC.

We ensure that the market participant discloses in a document called the prospectus all of the information that an investor will need in order to make an informed decision.

We ensure that market actors comply with their continuous disclosure obligations. We conduct routine surveillance of stock market activity and conduct investigations of possible breaches of the Act and customer complaints against registered market actors.

We conduct on-site inspections in order to ensure that registrants are complying with the legislation, to identify compliance issues and areas of emerging risk which have the potential to adversely affect investors.

We promote market integrity by making and enforcing rules through the use of orders, guidelines and By-Laws as well as establishing and monitoring standards in the market which include codes of conduct, prudential criteria and corporate governance.

We coordinate and conduct an investor education programme designed to provide investors and potential investors with suitable information to guide informed decisions. 

TTSEC signs Protocol with Securities Dealers Association

On January 8, 2014, the Trinidad and Tobago Securities and Exchange Commission (TTSEC) conducted its first official stakeholder engagement for 2014 with the Securities Dealers Association of Trinidad and Tobago (SDATT). At this meeting, a Protocol governing their relationship was executed and formalised by Chairman of the Commission, Professor Patrick Watson and President of SDATT, Gregory Hill.

The TTSEC-SDATT Protocol recognises and formalises the ongoing collaborative working relationship between the TTSEC and SDATT. This Protocol was drafted on the premise that both the Commission and SDATT must continue to engender and nurture a long term, positive relationship wherein both organisations may consult with each other and work together to identify and address industry concerns.

 Section 19(2) of the Securities Act 2012 (‘SA 2012’)mandates the Commission to co-operate with, provide information to, and receive information from other self-regulatory bodies or organizations . Whilst there is no legal requirement for the creation of a Protocol between the two entities, the Commission believes that this agreement will go a long way in mitigating and alleviating issues that have arisen over time regarding the regulation of the industry.

At this meeting, the TTSEC presented an update to the members of SDATT on the preparation of the Securities Sector for the 4th Round Caribbean Financial Action Task Force (CFATF) Mutual Evaluation and facilitated a presentation through PricewaterhouseCoopers entitled “An Introduction to the Foreign Account Tax Compliance Act (FATCA)”

The Commission intends to convene official meetings with its main stakeholder organisations in order to ensure that partnership, collaboration and cooperation remain common ethos.

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TTSEC and Central Bank sign historic Memorandum of Understanding (MoU)

The Trinidad and Tobago Securities and Exchange Commission (TTSEC) signed a historic Memorandum of Understanding (MOU) with fellow regulator in the financial sector, the Central Bank of Trinidad and Tobago (CBTT) on January 06 in Port of Spain, Trinidad.

This TTSEC-CBTT MOU represents a common understanding by the two authorities about how they will consult, cooperate and exchange information for regulatory enforcement purposes and is expected to further promote integrity, efficiency and financial soundness of the capital market. This agreement formalises and serves as a symbol of the pledge by both regulators to use reasonable efforts to provide any information that they possess which may relate either to the safety and soundness of any Financial or Licensed Entity under their regulatory supervision or the efficiency of the securities market.

This landmark event comes on the heels of the TTSEC joining a select group of 99 organizations to become a Full Signatory to the International Organization of Securities Commissions’ (IOSCO’s) Multilateral Memorandum of Understanding Concerning Consultation and Cooperation and the Exchange of Information in June of 2013.

By becoming a Full Signatory, Trinidad and Tobago will benefit from:

  • Sharing information with foreign regulators;
  • Enhanced international reputation and credibility; and
  • Increased investor confidence in its market for securities.

The passage of the Securities Act 2012 in December 2012 greatly assisted Trinidad and Tobago’s application in becoming a Full Signatory. The Act has, at its core, the promotion of regulatory cooperation, enhancement of disclosure obligations, strengthening of the regulatory framework, fostering transparency and facilitating an increase in the TTSEC’s enforcement powers. The Act also places greater  emphasis on prosecuting market misconduct and manipulation.

The TTSEC is currently finalising the details of another MoU with the Financial Intelligence Unit (FIU), the third regulator within the financial services industry. This agreement is expected to be formalised and signed  by February of this year.

The Chairman of the TTSEC, Professor Patrick Watson  gave his commitment that the TTSEC will constantly be re-evaluating the conceptual framework and operational regime for the regulation of the industry in order to ensure continued growth and financial stability of the market, while simultaneously protecting investors.  The Commission further resolves to continue collaborating with all key stakeholders in order to ensure that confidence is built in the entire financial system and the economic foundation of the country is strengthened.

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Cooperation and technical assistance are important to the development of securities markets in the Caribbean

               “Cooperation and technical assistance are important to the development of securities markets in the Caribbean and around the world.

             This was the view of Ester Saverson Jr, Assistant Director, International Affairs at the United States Securities and Exchange Commission (U.S. SEC). Mr. Saverson Jr,   along with his colleagues from the USSEC, were in Trinidad to facilitate a four day Inspections and Compliance Training Programme with staff of the Trinidad and Tobago Securities and Exchange Commission (TTSEC) and regulators from the region. A one day Seminar on the same topic was also facilitated with market actors. These programmes were timely because the new provisions in the recently enacted Securities Act 2012 give the TTSEC the power to conduct on-site examinations of Self-Regulatory Organizations (SROs) and persons registered under Part IV of the Act.

            In an interview with Diké Noel of the TTSEC’s Corporate Communications, Education and Information Division, Mr. Saverson  stated that one of the roles of the Office of International Affairs, of which he is an Assistant Director, is to help countries with their regulatory policies and consequently implement robust regulatory structures through training programmes and the conduct of assessments. These assessments and programmes are vital because they help to identify any gaps in regulatory programmes and to highlight the areas in which improvements may be required.  He indicated that this Inspections and Compliance Training Programme fits in perfectly with this mandate since the programme aims to provide both the TTSEC and other regional regulatory bodies with the basic tools to develop an On-Site Inspections Programme and an opportunity to understand the intricacies of the inspections process. He affirmed that at the end of this session, participants would have developed a better understanding of the inspections process and thus, will now be better able to design an appropriate programme for their respective bodies.

                     Mr. Saverson  who is no stranger to Trinidad and Tobago and the region, indicated that not only is it vital to have a good relationship with fellow regulators in the areas of technical assistance but it is also important in the domain of information sharing. He stated categorically that “crime has no borders”. It is therefore important to have a positive working relationship with all regulators, in the event that there is need to get  specific information which can lead to successful investigations into a growing number of insider traders, fraudsters and other offenders.   Since the TTSEC is now a Full Signatory to the International Organization of Securities Commission’s Multilateral Memorandum of Understanding Concerning Consultation and Cooperation and the Exchange of Information (MMoU), both the U.S. SEC and the TTSEC can consult, cooperate, and exchange information for securities regulatory enforcement purposes. In fact, this agreement provides a robust mechanism through which signatories share with each other essential investigative material, such as beneficial ownership information, and securities and derivatives transaction records such as bank and brokerage information.

                     The U.S. SEC, whose mission is to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation in the United States of America, is one of the more widely-known securities regulators.  Mr. Saverson surmised that this may be due to the number of enforcement actions which  once filed in court, are public. “The number of actions brought, along with the publishing of those enforcement actions, sends a message that the U.S. SEC is serious in protecting investors, providing full and fair disclosure of information and maintaining fair, orderly and efficient markets that are free from market manipulations and fraud”. However, he stated that a number of the Commission’s activities such as on-site inspections are private and confidential and therefore not available to the media but are an important component in the fight to protect investors. That confidentiality allows the U.S. SEC and the inspected entity to have a more open and frank conversation about what is needed to have high quality compliance procedures. 

                 Mr. Saverson   noted that the U.S. SEC cannot use the fines and penalties that are collected for operational expenses but may be used to reimburse harmed investors.  Any fines and penalties that are not used to reimburse investors are turned over to the U.S. Treasury. This is to assure that the there is no appearance of impropriety regarding the use of enforcement to fund the securities regulator.  The Financial Industry Regulatory Authority (FINRA) has more flexibility to use fines and penalties collected to fund investor education programmes. The United States of America like most countries has its share of unsophisticated investors. Consequently, the U.S.SEC  partners with other organizations including FINRA to develop and conduct investor education programmes for the investing public and outreach programmes to senior citizens, military families and young adults through the school based curriculum. The TTSEC’s approach to investor education is quite similar in that it incorporates all media (new, digital and traditional) along with tried methods such as direct interface and outreach.

                The U.S. SEC and the TTSEC have enjoyed mutually rewarding collaborations in the past. Each year, since 2008, the U.S. SEC has provided a technical team to facilitate the TTSEC’s Capital Market Development Workshop.  Members of staff of the TTSEC also participate in training programmes offered by the U.S. SEC which are conducted at their headquarters in Washington DC. Mr. Saverson reiterated that the U.S. SEC remains committed to providing the TTSEC and other “young regulators” with the tools and resources to build capacity and further develop the securities market in their respective jurisdictions.

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USSEC conducts compliance training for TTSEC staff, local and regional regulators and market actors

In December 2012, the legislation which governs the securities sector was repealed and replaced by The Securities Act, 2012 (“the Act”). The new provisions in this recently enacted legislation now give the Trinidad and Tobago Securities and Exchange Commission (TTSEC) the power to conduct on-site examinations of Self-Regulatory Organizations (SROs) and persons registered under Part IV of the Act. It is against this backdrop that the TTSEC with support from the United States Securities and Exchange Commission (USSEC) will host a four day Inspections and Compliance Training Programme and a one day Inspections and Compliance Training Seminar from September 16-20 in Port of Spain. These sessions are exceptional training and development opportunities for all regulators, securities market actors and other key players in the financial sector.

The Inspections and Compliance Training Programme, which targets fellow securities regulators from the Caribbean and TTSEC staff, aims to:

  • Provide other regional regulatory bodies with opportunities for re-tooling in the area of on-site examinations; and
  • Provide the staff of the Commission with an opportunity to understand the intricacies of the inspections process.

The Seminar on September 20, targets 120 registrants, market actors and regulators from Trinidad and Tobago and will provide attendees with information to assist them as they prepare for the introduction of on-site inspections at their respective entities.   Some key topics to be covered include:

  • Objectives and expected outcomes of the inspections process;
  • Risk-based regulation: A look at the risk assessment process;
  • Conduct of onsite inspections; and
  • Case studies of inspections of Broker-Dealer, Investment Adviser and SROs

Facilitators at these sessions include Kathleen Kelly, Senior Special Counsel, Ken Joseph, Regional Director and Ester Swanson Jr, Associate Director of International Affairs; all from the USSEC. Dean Miller from the Financial Industry Regulatory Authority (FINRA) of the USA and representatives from the Trinidad and Tobago Stock Exchange Limited and Jamaica Financial Services Commission will also conduct presentations.

The USSEC and the TTSEC have enjoyed mutually rewarding collaborations in the past. Each year, since 2008, the USSEC has provided a technical team to facilitate the TTSEC’s Capital Market Development Workshop. Members of staff of the TTSEC also participate in training programmes offered by the USSEC which are conducted at their headquarters in Washington DC and regional offices in Chicago and New York.

About the TTSEC:

The TTSEC is governed by the Securities Act 2012 and is responsible for maintaining oversight of the securities market and for ensuring that fairness, equity and transparency remain common values in the market place. Our vision is to be an effective regulator of the capital market in which stakeholders have confidence.

About the USSEC:

The mission of the U.S. Securities and Exchange Commission (USSEC) is to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation.  

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