JSE CSC cheat sheet

The JSE operates a central limit order book (CLOB) for equities; orders are matched by price priority, then time priority, and execution occurs at the resting order's price.

Trading sessions typically run a pre-open (order entry, no matching), an opening auction that sets the opening price, continuous trading, and a closing auction or closing price determination.

Market orders are matched against the best available opposite-side limit orders; any unfilled residual is cancelled unless the exchange's rules specify otherwise for that security.

A limit order carries a maximum buy price or minimum sell price; it rests in the book until filled, cancelled, or expired at end of day unless a longer validity is permitted.

Tick size and board-lot rules are set per security or per market segment; prices must be entered in valid increments and quantities in valid multiples.

Trading halts and suspensions are triggered by regulatory action, news dissemination pending clarification, or price-movement circuit breakers; during a halt no matching occurs.

Settlement of JSE trades follows a T+2 cycle in the local currency, with the Jamaica Central Securities Depository (JCSD) handling book-entry transfer and custody.

A trade is only valid once confirmed through the exchange's trading system; off-market or crossed trades must be reported and are subject to exchange approval.

Price limits and volatility controls may pause or constrain trading; the reference price is normally the last traded price or the prior close.

Only exchange member-dealers (brokers) may submit orders to the JSE trading system; clients access the market through a member acting as agent or principal.

Client orders require an account, a written or electronic order instruction, and suitability/KYC documentation before the first trade.

An agency order is executed on behalf of the client with commission charged separately; a principal order is executed against the member's own inventory at a disclosed price.

Front-running client orders, trading ahead, and misuse of client order information are prohibited market-abuse practices.

Best execution requires the member to take reasonable steps to obtain the best available price and execution venue for the client order.

Order records (time received, terms, execution details) must be retained and be available to the regulator on request.

A member must segregate client assets and client securities from its own proprietary positions and accounts.

Clients may cancel or amend an order before execution; once matched, the trade is binding and cannot be cancelled unilaterally.

The Financial Services Commission (FSC) is the securities regulator; the Jamaica Stock Exchange is a self-regulatory organisation whose rules bind member-dealers.

Prohibited market conduct includes insider trading, market manipulation, wash trades, pre-arranged matched trades, and dissemination of false or misleading information.

Material non-public information must not be traded on or tipped; insiders must observe blackout periods around results announcements.

Disclosure obligations require timely public announcement of material events such as dividend declarations, earnings, capital changes, and change of control.

Takeover and substantial-shareholding rules require disclosure when holdings cross specified thresholds and govern mandatory offer triggers.

Members must maintain minimum capital adequacy, keep proper books, and submit periodic financial and compliance reports to the regulator and exchange.

A compliance officer and written procedures for anti-money-laundering, conflicts of interest, and complaints handling are required of member-dealers.

Breaches attract sanctions including censure, fines, suspension of trading privileges, or expulsion from the exchange.

Ordinary shares carry voting rights and residual claim on earnings; preference shares rank ahead for dividends and liquidation but typically lack voting rights.

Dividend yield = annual dividend per share / market price per share; earnings per share = net income attributable to ordinary shareholders / weighted average shares outstanding.

Price-earnings ratio = market price per share / earnings per share; a higher P/E implies the market expects higher growth or perceives lower risk.

Cum-dividend means the buyer is entitled to the declared dividend; ex-dividend means the price has been adjusted and the seller retains the dividend.

A stock split or bonus issue increases share count and reduces price proportionally; it does not change market capitalisation or shareholder wealth.

A rights issue offers existing holders the right to subscribe for new shares, usually at a discount; the theoretical ex-rights price reflects the dilution.

Bond price and yield move inversely; price = present value of coupons plus redemption amount discounted at the required yield.

Market capitalisation = shares outstanding x price; an index is typically a weighted average of constituent prices or capitalisations, rebased to a starting value.

Settlement risk is the risk that one leg of a trade delivers while the other does not; central counterparty clearing and delivery-versus-payment mitigate it.

A long position gains when price rises; a short position gains when price falls and requires borrowing the security or margin cover.

Margin is collateral posted against positions; a margin call arises when equity falls below the maintenance requirement and must be met within the stated period.

Liquidity risk is the risk of being unable to exit a position without moving the price; it is measured by bid-ask spread and depth in the order book.

Interest-rate risk affects fixed-income prices: duration approximates the percentage price change for a 1% change in yield.

Credit risk for a bond is the issuer's ability to meet coupons and principal; ratings and credit spreads indicate the market's assessment.

Diversification reduces unsystematic risk but not systematic (market) risk, which affects all securities in the market.

Corporate-action processing adjusts positions and entitlements on the record date; the ex-date determines which holder receives the benefit.

Suitability assessment matches a recommendation to the client's objectives, time horizon, risk tolerance, and financial capacity.

Risk tolerance is the client's willingness to accept volatility; risk capacity is the ability to absorb losses without derailing financial goals.

A diversified portfolio combines assets with imperfect correlation; adding low-correlation assets reduces portfolio volatility for a given expected return.

Asset allocation across cash, bonds, equities, and property is the primary driver of long-run portfolio risk and return.

Disclosure of commissions, mark-ups, and conflicts of interest must precede or accompany a transaction or recommendation.

Know-your-client records must be updated when circumstances change materially, such as a change in employment, income, or investment objectives.

A client's investment policy statement documents objectives, constraints, and permitted asset classes, and guides ongoing review.

Unsolicited client orders may be executed without a suitability recommendation, but the member must still record and confirm the instruction.

The JSE main indices are capitalisation-weighted; index value = (current total market cap / base total market cap) x base index value.

A price-weighted index averages constituent prices, so high-priced stocks dominate; a capitalisation-weighted index is dominated by the largest companies.

Index rebalancing adds or removes constituents and adjusts divisor factors so the index level is continuous across the change.

Total return indices include reinvested dividends; price indices exclude them, so total return exceeds price return over time.

Trade reporting requires accurate recording of execution time, price, quantity, counterparty, and capacity (agency or principal).

Closing price is determined by the closing auction or the last traded price; it is the reference for valuation and end-of-day reporting.

Market data dissemination rules govern who may receive real-time versus delayed prices and how data may be redistributed.

Volume and turnover are distinct: volume is shares traded; turnover is shares traded multiplied by price, expressed in currency.

Fiduciary duty requires placing the client's interest ahead of the member's own interest when acting as agent or adviser.

Independence and objectivity mean recommendations must not be influenced by compensation, pressure, or personal holdings in the recommended security.

Confidentiality covers client identity, holdings, and instructions; disclosure is permitted only with consent or where legally required.

Misrepresentation includes omitting material facts, overstating performance, or presenting hypothetical results as actual.

Personal trading by staff must comply with pre-clearance, restricted-list, and blackout rules to avoid conflicts.

Gifts and entertainment must be disclosed and kept within limits; excessive benefits create a conflict of interest.

Fair dealing prohibits preferential release of a recommendation or research to select clients before publication.

Diligence requires a reasonable basis, supported by research and documentation, for every recommendation made to a client.