Latin American Capital Markets

48 REENA AGGARWALMarketaHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHNYSEcommunication networksNASDAQLondonTokyoSE of Hong KongParisBrazil BOVESPAAustraliaTorontoLinkage discussions between exchanges/electroniccommunication networksToronto,Tokyo, Paris, Amsterdam, SEHK, Australia, Brazil, Brussels, MexicoAll electronic communication networks trade NASDAQ stocks, Osaka,Deutsche Bourse, London, MarketXT joint ventureDeutsche Bourse, NASDAQ, OMSouth Korea, Thai land, Philippines, Singapore, NYSE, NASDAQNASDAQNYSELondon, Lisbon, NYSE, ArgentinaNASDAQ, NYSE, Far EastNASDAQ, NYSEthe region to achieve the same objective. Cooperation is needed among regulators ofdifferent countries and market participants in order to make global trading a reality.There has been discussion about creating a global equity market at the ini-tiative of the NYSE that includes emerging markets such as Brazil and Mexico (table2-3). The Tokyo Stock Exchange is in discussion to form its own alliance with theemerging markets of Asia, including South Korea, Thailand, and the Philippines. Globalizationof securities markets has become possible because of technological innovations.The next section examines the impact of technology on securities markets.TechnologyTechnology has made obsolete the traditional "brick and mortar" exchanges that formerlyneeded a physical location. Trading floors are no longer required, person-topersoncontact in conducting transactions is not needed, and information can betransmitted rapidly without physical contact between the transacting parties.This hasled to an increase in cross-border trading and therefore raised issues of jurisdiction.Technology has also resulted in the development of new types of trading systems thathave become easy to set up because of lower barriers to entry. These include automationof existing stock exchanges, creation of new automated exchanges, andgrowth of new independent trading systems.The 1990s saw the decline of floor-based exchanges and the emergence ofelectronic securities markets. Electronic exchanges in Latin America have emergedCopyright © by the Inter-American Development Bank. All rights reserved.For more information visit our website: www.iadb.org/pub