Latin American Capital Markets

290 ROBERTA S. KARMEL2000. Initially, the Paris Bourse owned 60 percent of Euronext; the Amsterdam Exchange,32 percent; and the Brussels Exchange, 8 percent 49 Euronext was formed asa Dutch company; it uses a French trading platform and offers a central counterpartand netting and clearinghouse for trade execution via Clearnet Issuers continue to belisted on their home exchanges but trade on a single integrated trading platform withharmonized listing requirements. It is anticipated that national regulators will agree toa common rulebook 50Lessons for Latin America and the CaribbeanEach of the case studies discussed above contains possible lessons for Latin Americanexchanges. In Sweden, demutualization was an important part of a process of convertinga government-controlled entity in a socialist state into a business-orientedstock exchange, which repatriated trading in Swedish equities from London to Stockholm.With recapitalization and the proceeds from a public offering, the StockholmStock Exchange was able to act as a leader in structuring affiliations with other Scandinavianexchanges. The Stockholm Stock Exchange proved an easy takeover targetfor ON, but OM's bid for the London Stock Exchange was a failure. These experiencesshow the importance of determining whether a demutualized exchange shouldbecome a public company and whether there should be limitations on the percentageof voting stock any single shareholder should be permitted to hold.The Australian Stock Exchange demutualization was part of an effort to internationalizethis exchange and make it a leader in Asia.This involved adopting newlegislation at the federal level in a strongly federalist legal system and the modernizationof exchange membership and governance. Yet, when the exchange attempted toexpand its business interests from equities trading to include financial futures trading,the competition authorities thwarted it. This experience demonstrates the need tofocus on whether an exchange should make a public offering as well as demutualizeand to determine what use can and should be made of the proceeds from any publicoffering.The Amsterdam Stock Exchange demutualization is an example of how anold and well-established exchange was forced by legal and economic circumstances49 "Paris, Amsterdam and Brussels Bourses to Approve Merger Terms," Wall Street journal Europe, July 4, 2000; 2000WL Wall Street Journal Europe 21065465.50 http://www.euronext.com/en/euronext/implementation.Copyright © by the Inter-American Development Bank. All rights reserved.For more information visit our website: www.iadb.org/pub