Latin American Capital Markets

72 GEORG WITTICH, ETHIOPIS TAFARA, AND ROBERT J. PETERSONAn important new development is the increasing investor interest in mobiletelephony and interactive television as a means of trading and obtaining information.Mobile telephony that relies on wireless application protocol (WAP) technology enablesusers to access the Internet directly through cellular telephones. Data transmissionspeed using current WAP technology is slow, although speed likely will increaseremarkably as the technology matures. While the greater interest has been securitiestrading and banking services, mobile telephony technology potentially could be usedto open accounts.Internet Use by Issuers and Market IntermediariesInternet use by issuers likewise has grown rapidly. Issuers use the Internet to disseminateall kinds of information, including financial, product, transfer agent, security price,and ratings information. Issuers also use the Internet to communicate directly withshareholders, investors, and analysts. Issuers in a number of jurisdictions are developingsystems to allow for online proxy voting and online shareholder and directormeetings (Johnson 2002). In addition, many issuers and broker-dealers increasingly areconducting securities offerings online and relying on the Internet and electronic mailto solicit prospective investors. 4Market intermediaries (broker-dealers, underwriters, investment advisers, andother entities and professionals empowered to make investment decisions for others)also are exploiting the potential of the InternetTraditional brokers are developing onlineservices. 5 A number of discount brokerage firms only provide services over theInternet Generally, intermediaries use the Internet to market and advertise, to presentmarket and portfolio information, and to meet their disclosure and reportingobligations. Intermediaries also provide investment advice, including software-basedadvice programs, over the Internet (IOSCO 2001).Many brokers have devised ways to allow their clients to conduct after-hourstrading via the Internet and to allow for automatic processing of Internet orders andreal-time routing of those orders. Others have established trading platforms on their4 See "Born in the USA," Investors Chronicle (June 7,2002);"Online Brokerages: Keeping Apace of Cyberspace," SpecialStudy by Commissioner Laura S. Unger (U.S. Securities and Exchange Commission, 1999), 17, at http://www.sec.gov/pdf/cybrtrnd.pdf; Joseph Weber and Peter Elstrom, "Transforming the Art of the Deal," Bus/'nessweefc: 3639 (July 26,1999), 96.5 See IOSCO (2001). See French Online Brokers Association (at http://www.brokers-on-line.org/chiffres/defaulthtm)Copyright © by the Inter-American Development Bank. All rights reserved.For more information visit our website: www.iadb.org/pubregarding the increased use of online services by French broker-dealers.