Capital markets ‘need help’

As the Caribbean strives for growth and competitiveness, the road must be made easier for capital markets in Barbados and elsewhere to help the region reach this goal.

Marlon Yarde, managing director and chief executive officer of the Barbados Stock Exchange, is proposing a focus on three main areas to help the Caribbean “move from regional ambition to regional execution”.

While supporting the establishment of an integrated CARICOM capital market, he said it was necessary to implement market maker frameworks to support continuous pricing and liquidity, harmonise cross-listing standards and strengthen exchange partnerships, and “build the SME pipeline – so we grow the number of issuers and the quality of investable opportunities across the region”.

“Liquidity is the oxygen of the market. Cross-listings are the bridge to scale. And the time for execution is now,” Yarde said last week while addressing the Jamaica Stock Exchange’s (JSE) 2026 Annual Conference.

Speaking on the theme Boosting Market Liquidity & Regional Cross-Listings – Caribbean, the capital market expert observed that while the region had made real progress in strengthening governance, modernising regulation, and building investor confidence, “many Caribbean markets remain thinly traded, with limited turnover, concentrated ownership structures, and too few mechanisms that encourage consistent price discovery”.

“And that matters, because liquidity is not just about ‘trading volume’. Liquidity is about confidence – confidence that investors can enter and exit positions, confidence that pricing reflects fair value, and confidence that capital markets can support long-term investment and growth,” he asserted.

Yarde said there were some “practical levers we can pull” and made four recommendations in this regard.

“First, I believe the most immediate and effective liquidity intervention is the implementation of structured market maker programmes. Market makers provide continuous buy and sell quotes, improve price discovery, and reduce bid-ask spreads – creating a more predictable trading environment for investors,” he said.

“If we want a more active market, we need someone obligated and incentivised to show up every day with two-way pricing.”

He continued: “Second, we must treat technology as a liquidity enabler. Friction reduces participation. The easier it is to access the market, the more likely investors are to participate. That means exploring fintech that supports faster settlement cycles, including blockchain-based efficiency where appropriate.

Digital inclusion

“It also means adopting AI-driven tools that reduce listing times and automate elements of due diligence – especially for small and medium-sized enterprises (SMEs). And importantly, it means building app-based trading and education platforms that support digital inclusion and broaden the investor base.”

Regarding the third lever, Yarde said: “Liquidity improves when investors have more reasons to trade. That requires diversifying financial instruments beyond traditional equities – expanding the investable universe and attracting different types of investors.”

He added: “Fourth, institutional capital is increasingly tied to governance and sustainability standards. So if we want deeper pools of investment, we must ensure issuers meet clear [environmental, social and governance] expectations and reporting standards. This is not about branding – it is about unlocking demand.”

On the issue of regional cross-listing of companies, the BSE boss stated: “Cross-listings can create scale: larger investor bases, improved visibility, better pricing comparability, and stronger corporate governance. But cross-listings do not succeed on aspiration alone – they succeed when the plumbing is right.

“The first requirement is harmonisation of standards. Disparities in legal, regulatory, and accounting frameworks remain one of the biggest obstacles. We don’t need identical laws, but we do need functional alignment in disclosure, ongoing obligations, enforcement cooperation, and settlement finality.”

For him, the second requirement is strategic partnerships between exchanges.

“Memoranda of understanding (MOUs) create the framework for collaboration and cross-listing opportunities, and we have seen examples of this approach, including partnerships between the JSE and exchanges outside the region and within the region, CXN,” Yarde said.

“We can also learn from the African Exchanges Linkage Project, which is designed to facilitate cross-border trading and integration across linked exchanges.”

He continued: “Third, cross-listings tend to work best when companies have a real operational footprint in the host market – so policy frameworks that encourage regional business expansion can indirectly strengthen market integration. We need to give CARICOM Single Market and Economy a chance to work and succeed.”

Yarde also told participants that the region “must reduce friction in currency and payment systems”.

“Streamlined payment infrastructure reduces foreign exchange risk and improves cross-border participation,” he said.

“So, what is the end goal? It is not simply more listings or more trades. The end goal is a stronger regional economy – where markets are deeper, governance is stronger, cost of capital is lower, and investors have real diversification opportunities.

“We need an integrated market as envisioned by the Revised Treaty of Chaguaramas, Establishing the Caribbean Community Including The Caribbean Single Market Economy, Article 44 1 (d), the establishment of an integrated capital market in the Community,” he said. (SC)

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