Latin American Capital Markets

540 FOCUS ON CAPITALregulation (continued)market liquidity, 102pension funds, 24,25, 107, 144regional market integration, 166-77, 182,185-87, 188,264shareholder protection, 54, 107-8small economy challenges, 104SMEs,394-95,4l2strategies for capital market development,17-22tax distortions and equity markets, 98trading systems, 51 -53,496transparency of markets, 54, 109, I 15-16See also demutualization of exchanges;oversight of markets; self-regulationrelative efficiency view of markets, 215repo markets, 307Reports on the Observance of Standards andCodes (ROSCs), 235reputation capital, 57-58, 376,421-23research and development, 115, 393Resolution 275 (Colombia), 454-56retail investors, 65-66,81 -83,86, 315, 316retirement benefits. See pension funds; socialsecurity systemsrevenue recognition principle, 216Rio de Janeiro Stock Exchange, 24, 109,255, 383risk and uncertaintybanking management of, 100, 309-10bond markets, 309, 311, 322capital market environment, 4, 160clearing and settlement, 190,248-49decline in crossover investment 13differing preferences for investors,110-12, 114electronic trading, 60exchange rate issues, 301, 302futures markets cooperation, 193integration initiatives, 160Internet trading, 75,81-83Latin American IPOs, 8liquidity benefits, 128,263need for management of, 23,25operational risk, 241, 246poor macroeconomic policy, 95regional market integration, 200regulation, 54See also derivatives marketsrisk capital. See venture capitalRodrick, S., 6ROSCs (Reports on the Observance ofStandards and Codes), 235routing orders and regional integration, 26rule of law, 356,424rule- vs. principle-based accounting systems,221-25rules, trading. See regulationRussia, challenges of market reform in, 492sales of companies and shareholder rights,449-50Sanvicente, 497Sao Paulo Commodities Exchange (BMSP), 383Sao Paulo Stock Exchange (BOVESPA)capital access improvements, 20-21,40consolidation, 255derivatives market, 383listing reform initiative, 446—48market institution role, 24regional market integration, 109SMEs, 503strength of equity market in Brazil, 94Sarkissian, Sergei, 506savings, domesticcapital market contribution, 3institutional investors, 23, 129Latin American weakness in, 95,472,473-74mandatory contribution effects, 106-7structural reforms, 105SAXESS trading platform, 185scandals, corporate, 437,442—43Schill, Michael J., 506Schulman, Michael Ashley, 405,407-8S.D. Indeval, 255-56SEAQ International (SEAQ-I), 163secondary marketsbond, 307-8, 313, 318-21,322, 323,329-30derivatives as, 371institutional improvements, 22SMEs, 395sector allocation of investments, 160sector-based approach to human capitaldevelopment, 465-69securities. See equity marketsSecurities and Exchange Act of 1934 (U.S.), 136,280Copyright © by the Inter-American Development Bank. All rights reserved.For more information visit our website: www.iadb.org/pub