Francisco Briones: The law will find its way and we hope that the Assembly will do its job

The Undersecretary General of the Cabinet, Francisco Briones, describes the main changes in the Investment and Securities Market Law that has been urgently sent to the Assembly and that, he says, will be to strengthen the institutionality of the stock market. Briones indicates that he is confident that there will be no opposition to a law that seeks to attract investment, and with it greater employment and escape from poverty.

In the new law, there is a change in institutionality with respect to the Superintendence of Banks, which once again has insurance and the Superintendency of Companies remains with the stock market. What is the advantage of the change?

As has been public, the structure of stock market supervision as it had been operating was weakened. At the end of the day, the fact that the Superintendency of Companies has had many areas of supervision affected it, it covered a lot and tightened it up a little. This led to a problem in some operations that were done inappropriately.

How would the changes be applied at the personnel level, since badly or well some already have experience in Companies?

In the transitory ones, the law explains that the personnel who are in Companies will be evaluated and those who have experience in insurance will be transferred to Banks. It is not just about a transfer of powers, but better order so that banks and insurance are controlled by a single entity and the corporate and securities sector by the other entity.

It has also been said that controls are included in the law so that scandals like those of Isspol do not repeat themselves. What are these improvements in controls?

First, institutional strengthening. This can be seen in the proposal at the level of the share change that the stock exchanges may have. Currently the brokerage houses are the owners and at the end of the day they end up being judge and jury in terms of stock market issues. We put a limit, a ceiling on the participation of the brokerage house or any shareholder, to diversify the actors that can be owners. We are also strengthening the requirements for the types of issues so that they cannot be made by evading controls, that they have risk ratings, board authorizations. Another important issue is that we are promoting the existence of a corporate governance in the stock markets and that they have better standards.

Precisely, the possibility of international stock markets entering has been seen as a great change. Has this been with a view to the Pacific Alliance?

Within the Government we have been making an effort to enter the Pacific Alliance and one of the themes of the alliance is that it is not only a commercial agreement, but also one of regional integration. It goes beyond the commercial theme, it goes towards mobility, towards the stock market. One of the issues that is already being advanced at the regional level is the implementation of a single bag within the Pacific Alliance. While Chile, Peru, Colombia and Mexico are integrating, in Ecuador we have two exchanges: Quito and Guayaquil. Thinking about this, the subject of the shareholding structure was changed. The entry of an international exchange that wants to absorb these two exchanges is promoted. If Ecuador enters the Pacific Alliance, the idea is that they join the Pacific Stock Exchange. Thinking about the future we have made the reform.

What does it mean that in public broadcasts there will be an auction, as stated in the law?

One of the issues that we want with the law is to strengthen, make transparent and give greater predictability to the operations on emissions that the State does: the treasury notes, the public bonds. We seek that when issuing these public obligations there is an auction so that the market defines the price. This helps to achieve greater stability in the accounts payable in the medium term. This is given that, as is known, these issues are used to pay certain debts, such as to retirees, to State suppliers, and when they are able to negotiate in the stock market, what was happening is a movement that is too inconsistent and uneven. .

Is there room for a secondary market in the law?

All the issues will enter the market through the auction mechanism, after having been acquired in the market, the second transaction and from now on is carried out in the stock market.

The law speaks of the securitization of collection rights on future sales. Who can benefit from this figure?

What we want is for the securities market to have a greater variety of products and more financing opportunities. In this case, a robust business, with stable sales levels, can say I want to finance myself today and as collateral I put my future sales that will serve to pay my debt. What is sought is to modernize this figure and extend it to sectors such as construction.

There is also talk of being able to assign mortgage rights, I thought that the IESS could opt for this figure. Is it so?

In all cases, what is sought is that the stock market has more mechanisms. The idea is to access financing today. For this there is securitization, trust, promissory notes, invoices, they are different instruments, with the same objective but with their particularities.

There are voices that say that it is positive that the over-the-counter market, which had almost disappeared, be reactivated, but they are concerned that it does not go through brokerage houses as a matter of course, since this would reduce transparency. That responds?

In all countries of the world, over-the-counter transactions are legitimate and normal. In Ecuador we have the challenge of demonstrating that these mechanisms are not going to be used to evade controls. We should not stop at the issue of modernization and progress for that. What must be ensured is that there are sufficient checks, balances and mechanisms that allow us to have control and transparency, and that it overcomes the bad habits that may exist in the past.

How do you see the feasibility of the law, understanding the complex situation in the Assembly?

The law is an instrument that will help us Ecuadorians to be more attractive for investments. That will create employment. We do not believe that there is opposition to a bill of this type, which is not from the Government but for Ecuadorians. We want a country reflection to commit to the country to generate investments, because without them there is no employment and without employment we cannot get out of poverty.

But will there be political maturity in the Assembly?

What we hope is that in the coming days there will be a dialogue. The law will find its way and we hope that the Assembly will do its job of polishing and improving the law. We will be attentive to that constructive debate. (I)