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The Community & Workers of Jamaica Co-operative Credit Union Limited on Half-Way-Tree Road in St Andrew, Jamaica (Photo: Jamaica Observer)

C&WJCCUL to become the first credit union on Jamaica Stock Exchange

The Community & Workers of Jamaica Co-operative Credit Union Limited on Half-Way-Tree Road in St Andrew, Jamaica (Photo: Jamaica Observer)

Community & Workers of Jamaica Co-operative Credit Union Limited (CWJCCUL) is seeking to enlist JM$900 million in deferred shares held by its members on the Jamaica Stock Exchange (JSE).

Deferred shares are similar to preference shares which generate interest income for the shareholder. It is, therefore, likely that the JSE will treat them as such.

“C&WJCCUL has used deferred shares in the past to bolster its capital requirement. However, the shareholders — with the greatest of intentions to keep their funds for the mandated five years, would withdraw amounts to cover unforeseen or unexpected expenses. However, such payouts would negatively affect the credit union’s capital amount,” CEO Carlton Barclay pointed out.

Community & Workers of Jamaica Co-operative Credit Union Limited Chief Executive Officer Carlton Barclay (Photo contributed)

To this end, C&WJCCUL, with the guidance MoneyMasters Limited, has embarked on identifying new and consistent sources of financing to meet the Bank of Jamaica’s (BOJ) capital requirements.

According to BOJ stipulations, a financial institution’s capital requirements are calculated at a percentage of the total assets that it owns.

To clarify, CEO of C&WJCCUL Carlton Barclay explained that if funds raised from deferred shares were to qualify as capital, the funds would have to meet certain requirements — one of which is that withdrawal of funds held against deferred shares cannot be done at short notice.

MoneyMasters will broker the Community & Workers of Jamaica Co-operative Credit Union Limited’s listing on the Jamaica Stock Exchange (Photo contributed)

Against that background, by listing the deferred shares on the JSE, C&WJCCUL aims to establish a fund that will guarantee that its members’ investments are protected over the lifetime of their relationship with the institution. At the same time, the listing ensures that the credit union maintains a consistent source of funding.

“Listing the shares on the Jamaica Stock Exchange provides the protection to C&WJCCUL and allows each member shareholder to recoup or access the funds by selling the shares at any time, through an established broker,” Barclay noted.

He further explained that the credit union will list on the exchange by introduction.

The Jamaica Stock Exchange building on Harbour Street in downtown Kingston. Community & Workers of Jamaica Co-operative Credit Union Limited will list on JM$900 million of its deferred share on the stock market. (File photo)

With the decision to trade shares on the stock market, C&WJCCUL has begun sharing with its members that they will need a brokerage account to increase their shareholding and to sell to others. As such, each member will have until July 16 to identify a broker and apply for a Jamaica Central Securities Depository identification number.

In the meantime, Barclay championed the credit union’s move, noting that the “shortlisting on the Jamaica Stock Exchange will benefit each member shareholder with excellent returns on a long-term investment, with the possibility of trading the shares at a profit at any time”.

The Bank of Jamaica building in downtown Kingston. Community and Workers Cooperative Credit Union must find new source of funding to meet the Bank of Jamaica’s financing requirements. (File photo)

He added that this latest innovation by C&WJCCUL is part of the credit union’s vision to be the financial service provider of choice for stakeholders locally or throughout the Diaspora.

The CEO also noted that the listing of its shares on will ensure that the credit union remains relevant through technology, as well as expanded products and services, together with superior customer service.