T&T Securities and Exchange Commission
The Securities and Exchange Commission of Trinidad and Tobago (TTSEC), as the regulator of the securities industry, uses a variety of mechanisms to fulfill its statutory mandate to protect the rights and interests of investors.
Among the mechanisms used by TTSEC to promote investor protection is ensuring that registrants disclose all relevant information necessary for investors to make the investment decision that best meets their needs and appetite for investors. the risk. This is called a disclosure-based regulatory system. In a disclosure-based regulatory system, the regulator tries to ensure that investors receive the necessary information about products and market players; in order to make an informed investment decision. It is important to note that the TTSEC does not attempt to tell investors whether an investment opportunity is good or bad for them.
Under TTSEC’s disclosure-oriented regulatory framework, all registrants are required to comply with certain continuous disclosure requirements as described in Section 83:02 (SA) of the Securities Act and its related by-laws. Compliance with these requirements ensures that registrants file certain disclosure documents with TTSEC and make them available to their investors, within specified time frames. The information contained in these continuous disclosure documents is often essential to ensure that investors have relevant and accurate information when deciding which investments are best suited to their needs.
The table below outlines some of the most common continuous disclosure documents that registrants are required to file with the TTSEC, as well as the time limits within which these documents must be filed with the TTSEC under the SA.
Several of the documents, shown in the table, contain the registrant’s financial statements. Financial statements are a very important source of information and are essentially reports prepared by the management of a company that present information about the performance of a company. There are four main statements that are included in a company’s financial statements:
(1) Balance sheet or statement of financial position – the balance sheet identifies the assets of a business, its liabilities and the share capital of the business. To put it simply, the balance sheet shows what a company owns and what it owes at the date of the balance sheet;
(2) Income statement or income statement – these statements show the company’s total income, total costs (the amounts paid to manufacture its products or provide its services), total expenses (what it paid in overhead) and net income for a given period. In summary, these statements identify how much money a business has earned and spent over a period of time;
(3) Statement of cash flows or statement of cash flows: statements of cash flows report the exchange of money between a company and the outside world over a period of time. that is, it shows how much money is coming in and going out of the business; and
(4) Statement of Changes in Equity – This statement shows the changes in the company’s share capital, reserves and retained earnings over time.
The information contained in the financial statements can be used by investors to assess various aspects of a company’s performance such as profitability, liquidity, solvency and efficiency. All these elements affect the ability of the company and its investors to get a return on their investments.
Other valuable information about reporting issuers is included in material change reports. These are reports filed with the TTSEC and published in newspapers when there is a change in the business, operations, assets or ownership of a reporting issuer when this change can be considered material to a investor who makes an investment decision. By definition, material change reports therefore contain information that investors need to consider in determining whether to buy, hold or sell investments in a particular company.
In addition, continuous disclosure documents provide investors with valuable information about a business and, by extension, their investments in that business. These documents should be reviewed by investors when making their investment decisions. They are an essential part of the regulatory framework and if a registrant fails to comply with a continuous disclosure filing requirement, this constitutes a violation of the ICA. Therefore, the TTSEC may initiate proceedings against this declarant in accordance with Article 156 (2) of the SA. This article stipulates, among other things, that: “. . . . . . . an administrative fine of $ 1,000 per day for each day the document or instrument remains unpaid after the expiry of the prescribed period.
Essentially, subsection 156 (2) makes a registrant liable to an administrative fine of $ 1,000 for each day they fail to file a document required by law within the prescribed time, including continuous disclosure documents.
As we continue to work on creating a more effective and efficient regulatory framework, registrants are reminded that it is essential not only to prepare, but also to file these continuous disclosure documents in a timely manner. Investors are encouraged to use these documents before making investment decisions.
For more information on the securities market and the role and functions of TTSEC, please visit our corporate website at www.ttsec.org.tt. To become a smart investor, visit our investor education website, www.investucatett.com and download our investor protection mobile app through Google Play and Apple Store. You can also take the online course and test your knowledge in our interactive InvestorQuestTT investing game at www.investorquest-tt.com, and don’t forget to connect with us through Facebook; Twitter, Instagram, LinkedIn or YouTube.