The possibility of merger and participation of international stock exchanges in the shareholding of the local stock exchanges of Quito and Guayaquil is one of the changes brought by the project of Law of Attraction of Investments, Strengthening of the Stock Market and Digital Transformation which was sent this week by the Executive as an urgent matter to the Assembly.
The proposed rule indicates that any shareholder, individual or corporate, national or foreign, of a stock exchange may not be the owner or accumulate directly or indirectly, “a percentage greater than 8% of the issued and outstanding shares of the stock market”. Previously it was 10%.
It also establishes that stock exchange shareholders must be diversified and thate The Financial Board may establish limits on participation by sectors or by nature of shareholders. However, it clarifies that the above limitations are not applicable in the case of national or regional integration of accredited stock exchanges in Ecuador.
Finally, it gives the green light to the participation of international stock exchanges, since it indicates that: “In order to promote regional integration of local stock exchanges and develop the Ecuadorian stock market, may exceed these participation limits, the international stock exchanges, qualified by the regulatory entity. This as long as they meet certain requirements. In this new structure of the exchanges, they will be managed by boards that will be elected at shareholders’ meetings for a period of five years.
In accordance with Ramiro Crespo, president of Analytica Securities, is very positive for the country that the international stock markets can come to be majority shareholders of the local stock exchanges. This represents a improvement in every sense, economic, technological, in terms of efficiency, custody and settlement. For Crespo, the theme It will be seen in a more concrete way when Ecuador enters the Pacific Alliance. He explained that at the moment Colombia, Peru and Chile have already merged with other regional exchanges. In Crespo’s opinion, the merger of the local exchanges will take place naturally, because if an international exchange were majority shareholders of one of the local exchanges, the other would have to merge to continue operating.
Meanwhile Fernando Simó, president of the Association of Securities Houses of Ecuador (Asocaval), considers that the law has many positive points and others with the option of improvement. Regarding the new regulations regarding the new structure of the Stock Exchanges, he explains that they are positive for Ecuador, since the sector requires to be present at the regional level.
For Simó, if this modification to the norm allows the local exchanges to merge, it would be a very important advance. “It is not logical or efficient that in a country and in such a small market there are two exchanges” Additionally, he says that if the norm also allows the participation abroad of national exchanges, it is also a point in favor. He explains that currently, the Mexican and Brazilian Stock Exchanges already participate in other stock exchanges in the region and a similar model would insert us.
However, Simon has several observations to the Law, regarding the subject of values. First, he explains that it was done but without taking into account criteria or suggestions from his sector, since they were never invited to a dialogue. He explains that there should be a new Securities Superintendence, technical and specialized and likewise, the Financial Board is not the most appropriate entity for regulation, Well, having so many issues and responsibilities on him, the stock market issue has always been underestimated.
About stock exchange directories, this is what the rule says: “The legal representatives or administrators of stock market intermediaries, or those who are directly or indirectly linked to one of them, may be part of the board in strict proportion to their shareholding.” In this sense, he says that it is not possible that brokerage houses (intermediaries) can only participate in the board of directors of the stock exchanges in proportion to their shareholding. “It’s discriminatory,” he says. For Simó, it would be appropriate to work with corporate governance policies.
On the other hand, Simó indicates that the re-institutionalization of the over-the-counter market that had disappeared with the 2014 law seems positive to him, but he regretted that there is no obligation for broker-dealers to participate in this type of operation, as this would challenge transparency. (I)
Source: Eluniverso
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