Trinidad and Tobago 2012 - invesTT

A GUIDE TO INVESTING IN TRINIDAD AND TOBAGO (2012)
Section 5
and some of the larger, private companies, in both local and
foreign markets. In general, bonds issued on the local market are
administered through private placement with a merchant bank or
trust company.
From, 2005-2010, a cumulative total of TT$12.6 billion was raised
on the local bond market. In 2011, there were 20 primary bond
issues, raising approximately $7.2 billion compared with 19 bond
issues in 2010 which raised $7.1 billion of the 20 bonds issued in
2011, 6 were denominated in US dollars, raising a total US$238
million or approximately TT$1.5 billion. This represented issues by
the various players in the market which included local and regional
governments, statutory corporations and public enterprises and
private sector and other regional institutions in the Caribbean and
Latin America. This sector of the financial industry has also grown
within recent times with the commencement of other non-financial
institutions such as the AIC Financial Group.
Mutual Funds
Since 2005, there have been four (4) major players in the local
mutual funds market: the Unit Trust Corporation, which was
established in 1981; the RBC Royal Bank of Trinidad and Tobago
Limited, which established its first fund in March 1994; First Citizens
(formerly called First Citizens Bank) in 1998; and the Republic Bank
Limited in 1995. There are also institutions in Trinidad and Tobago
that allow for participation in mutual funds invested abroad. The
mutual fund industry has expanded tremendously over the years
and in recent times. This expansion was not through an increase
in the number of entrants into the market but through the wider
range of financial instruments offered by existing entrants, some
tailored to the specific needs of investors. First Citizens Bank has
been the major driver in this regard with the introduction of three (3)
mutual funds tailored to individual or institutional investors. Funds
registered and traded in Trinidad and Tobago, are denominated in
six currencies: Trinidad and Tobago dollars, US dollars, Barbadian
dollars, Sterling pounds, Euros and Canadian dollars. These
denominations originate in nine (9) jurisdictions namely: Trinidad
and Tobago, United States of America, Europe, Canada, Asia, Isle
of Man, Cayman Islands, Barbados and Guernsey.
Funds under management rose by TT$ 7.4 billion during the twelve
(12) months to September 2011 to close the period at TT$40.96
billion. This represented a 22.2 % increase in funds.
The Unit Trust Corporation was established by an Act of Parliament
in 1981. It is regulated by the Unit Trust Corporation of Trinidad and
Tobago Act 83:03. It is planned to restructure the Trinidad and Tobago
Unit Trust Corporation into a public liability company by passing in
parliament the Trinidad and Tobago Unit Trust Corporation (Vesting)
Bill 2002. This bill is yet to be enacted. This will allow for an initial
public offering by the newly restructured Unit Trust Corporation.
Other Institutions licensed to conduct the business of a mutual
fund nature at present operate under the Financial Institutions
Act. It is expected that new legislation to regulate the mutual fund
market will be developed. Among the four (4) institutions operating
in Trinidad and Tobago, there are Balanced (Growth and Income)
Funds, Money Market Funds and Capital Appreciation Funds.
Profits accruing to a Trust operated by a financial institution,
licensed under the Financial Institutions Act, in respect of its unit
trust business, are exempt from corporation tax.
In 2005, the Securities Exchange Commission of Trinidad and
Tobago (SEC) commissioned a study of the industry so as to aid
51