Latin American Capital Markets

86 GEORG WITTICH, ETHIOPIS TAFARA, AND ROBERT J. PETERSONConclusionHaving qualified technical personnel and adequate resources to keep pacewith technological developmentEnsuring system integrity in retrieving and storing data from ISPs for use inproceedings, including contracting agreements to allow transmission of nonpublicinformation.The Internet has the potential to level the advantages that large markets, large issuers,and large investors traditionally have held over their smaller counterparts. If this potentialis properly recognized and seized, the Internet could offer great benefits to thefinancial markets of developing economies. However; taking advantage of the Internet'spotential is not a straightforward proposition. Internet-related technologies arenew, and the securities regulators of developed markets have only recently come togrips with some of the regulatory complexities. At the same time, the first tentativesteps regulators have made down this path offer distinct lessons for developing marketregulators.Almost all of the 19 jurisdictions that lOSCO's Internet Task Force recentlysurveyed have, through guidance or interpretive releases, clarified their regulatory authorityin the area of Internet technology. Regulators in developing markets likewiseshould clarify their authority as soon as possible, in order to create the legal infrastructuretheir markets will need in order to operate most efficiently. Fortunately, thelessons learned so far by other regulators—contained in lOSCO's two Internet reports—offervaluable guidance on how developing market regulators could prioritizethe Internet-related issues they confront.The first lesson regulators have already learned about the Internet as it pertainsto securities regulation is that the fundamentals have not changed. Securitiesmarkets are about accurate and timely information. Allocating capital and risk in an efficientmanner requires that information flow freely among all those involved in themarket—investors, issuers, intermediaries, clearance and settlement entities, and regulators.Securities regulation in an Internet world differs from traditional securitiesregulation only in that the volume and speed of free-flowing information are muchgreater than in the past. Securities regulators must still ensure that the informationflowing in this environment is not contaminated with falsehoods or inaccuracies. Likewise,regulators must deter unscrupulous individuals from preying on investors throughthe Internet.Copyright © by the Inter-American Development Bank. All rights reserved.For more information visit our website: www.iadb.org/pub