Latin American Capital Markets

262 ANDREW HOOKand Trinidad and Tobago and are being developed in the Bahamas and the DominicanRepublic.Starting in 1989, there has been a series of actions taken to support the developmentof a single capital market in the Caribbean. This has involved plans andwork in three areas: establishment of a regional stock exchange; establishment of acommon, automated clearing and settlement platform; and establishment of depositoriesin all markets. In 1989, the Jamaican government presented the CaribbeanCommon Market with a proposal for a Caribbean Stock Exchange in the form of amerger of exchanges in Jamaica, Barbados, and Trinidad and Tobago. In 1996, the Bahamasand the Dominican Republic were included in this plan.In 1991, the stock exchanges of Jamaica, Barbados, and Trinidad and Tobagobegan cross-listing and cross-trading programs. Currently there are four companiesparticipating in these programs.The JSE and Trinidad and Tobago exchanges also allowsimultaneous trading. General interest in the creation of a regional exchange wanedfor several years, but recently has been renewed.Conclusion: Strategies for Accelerating the Development of CapitalMarket Infrastructure in Latin America and the CaribbeanEfficient, safe, and well-functioning infrastructure is an integral part of any successfulcapital market. Without such an infrastructure, a capital market will not be able tocompete with other markets that have achieved international standards with theeffective use of current technology. As a growing number of investors turn to crossborderopportunities, observance of best practices and policies promoted by internationalfinancial institutions will become essential for individual capital markets tocompete for business.Capital market infrastructure has been evolving and is currently entering anew phase, with a new set of rules and objectives. In the earlier phase, the emphasiswas on drafting and enacting appropriate legislation; establishing appropriate institutions,such as clearinghouses or central security depositories; and reaching a settlementperiod ofT+3 and delivery versus payment for settlement. As these first initiativesare being completed, the need to move to the next phase of infrastructuredevelopment is becoming evident.The next phase, which is currently under way, extends the standards andpractices from the exchange of documents and instruments to the end users, intermediaries,and issuers. In this phase, market participants are also taking additionalCopyright © by the Inter-American Development Bank. All rights reserved.For more information visit our website: www.iadb.org/pub