In October 2018 a commission of experts was formed to review the landscape of the Colombian capital markets and propose measures to boost the market as an instrument for economic growth and general welfare. The commission gathered information from the market through workshops and one-to-one meetings with market participants. After a nine-month process, the commission presented its recommendations on August 9 2019, in an 80-page document that includes more than 60 initiatives that aim to improve market regulation and conditions.
The recommendations are grouped in seven different areas, each of them related to fundamental aspects of the Colombian capital markets that would require some change. The document includes proposals related to the structure of the market, the role of government institutions, the regulation applicable to different market participants, taxes, financial education, international participation and, of course, the role and impact of innovation. Each of the recommendations would require analysis and discussions in the industry and may be subject to different steps for their implementation (ranging from a change in the law, to amendments to decrees issued by the Ministry of Finance or to circulars issued by the Superintendence of Finance).
Among the most relevant, the commission encourages the review of the role of the Colombian self-regulatory organisation (Autorregulador del Mercado de Valores), to further expand the role of the custodian in secondary market transactions and securities lending, and to create a private placement market and a 'balcony' market for small-sized companies.
Furthermore, the publication of the recommendations has created an atmosphere in which market participants and authorities are opening discussion on relevant structural matters that cause inefficiencies across the market, even extending to important tax issues. The government, the commission and market participants began these discussions in a two-day event held in the third week of August, involving voices from the full spectrum of market players. While market participants now have a substantial opportunity to foster regulatory changes to develop the market and the industry, it may well also be an opportunity to promote better understanding in the community of what the industry does and the benefits of participating in the market. This being the case, it is hoped the regulatory changes may come together with a better perception of the market and a deeper market reach within the Colombian business community.
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Carlos Fradique-Méndez |
Hernán Vidal |