When the then Prime Minister Tom Adams piloted the Securities Exchange Bill through the House of Assembly on September 23, 1982, a precursor to the Securities Exchange Act Cap 318A, he stated that those at the bottom of the economic ladder would now have greater access to a wider ownership of shares. The Exchange was established with several goals in mind; the most important of which was playing a role in efficiently utilizing Barbadians’ savings to allow them to better themselves by seeking out opportunities for wealth creation.
Although trading started in 1987, it was an almost decade-long, planning process, initiated by the Council of the Barbados Chamber of Commerce with much of the groundwork taking place during 1986 by the Securities Exchange of Barbados' (SEB) first General Manager, Anthony Johnson, with the support of persons such as Dr. Trevor Carmichael, Dr. Grenville Phillips, Hilford Murrell and Lenny St Hill just to name a few.
On June 12, 1987, trading on the Securities Exchange of Barbados (SEB) commenced. At this time there were five companies listed namely:
- A.S Brydens & Sons Limited
- Banks Holdings Limited
- Barbados Shipping & Trading Company Limited
- Cave Shepherd & Company Limited and;
- Goddard Enterprises Limited
These companies listed a total of 52,537 577 shares with prices ranging from as low as $1.15 for one share in Cave Shepherd & Company Limited to as high as $2.15 for one share in Banks Holdings Limited. At the close of the first day of trading a total of 35,600 shares traded with a total value of $66,460.00. The Total Market Capitalization at the close was $97,558,435.75.
From that modest beginning the SEB grew and today its successor, the BSE, has 27 listed securities trading on the board of the Exchange, including four cross-listed securities; three of which are domiciled in Trinidad and Tobago and the remaining one domiciled in Jamaica. Evidence of the growth of the BSE can be seen in the marked increase in the Total Market Capitalization which stood at $10,951,565,632.91, as of June 12, 2013; an average increase in excess of 400% per annum.
The Trading System
In the early days trading was conducted two days per week on Tuesdays and Fridays using the Open Outcry method which involved brokers physically meeting at the Exchange when it was headquarterd at the Tom Adams Financial Centre. Traditionally, the open outcry method involves Brokers shouting and using hand gestrures to communicate or transfer information mainly for the purpose of buying and selling shares. However, at the then SEB, Brokers would meet collectively and the SEB's Trading Official would request 'calls' or offers. The Broker who responded first would be the Broker who was given first option to take up the availabe offer(s).
On July 4, 2001, the Exchange switched from the manual, open auction outcry method of trading, to electronic trading using the Order routing method. Orders are queued immediately on entry to the system but trades occur only when two or more orders match. Limit orders at specified prices were executed at that price or better and it was the responsibility of the Brokers to ensure that clients settle their accounts/trades within the specified time of T+5, or five business days after trade day.
On February 4, 2003, the number of trading days was increased from two days to three days per week; Tuesdays, Wednesdays and Fridays to facilitate the increase in trading activity which was being experienced in the market at that time. Effective January 01, 2006 this settlement cycle was reduced to T+3. In March 1, 2007, the number of trading days increased from three days to five days per week, inline with the number of trading days conducted by our sister Exchanges in Jamaica and Trinidad.
The Junior Market commenced operation in October 1999 with the listing of its first security - Fortress Caribbean Property Fund (CPF). While operating as a subset of the BSE's Regular Market, its primary objective was to cater to those smaller or newer public companies, which may not meet all the necessary requirements for listing in the Regular Market such as financial requirements and history. This was seen as a way to allow those smaller businesses with growth potential to have access to an alternative source of financing without taking on excessive debt. Although companies seeking a listing on the Junior Market have to meet the same on-going regulatory obligations as their larger counterparts once listed, they do not have to meet the same set of listing requirements. The requirements for Junior listings are far more relaxed but still explicit.