AUTORREGULADOR DEL MERCADO DE VALORES -COLOMBIAN SRO-

Transcription

1 AUTORREGULADOR DEL MERCADO DE VALORES -COLOMBIAN SRO- Mauricio Rosillo Rojas September 2007

2 MARKET STRUCTURE

3 A SINGLE FINANCIAL REGULATOR Banking Superintendency Securities Superintendency

4 FIs MARKETS ACTIVITIES PRODUCTS Banks SCBs (brokerdealers) Commodity brokers Fiduciaries (trusts) Pension funds Insurance companies Interdealer brokers Money tables BVC markets: Equities MEC Other markets: SEN OTC debt market (Inverlace) commodity markets Debt trading Equities trading Derivatives trading Commodity futures trading Investment banking / underwriting Brokerage / sales to customers Margin lending Investment advice for customers Asset management Investment funds management Government bonds Corporate bonds Depository notes Equities Investment funds Commodities Foreign investments Derivates In each area responsibilities are divided between SROs and the SFC

5 HISTORY AND BACKGROUND OF THE INCORPORATION OF AMV

6 HISTORY AND BACKGROUND Integration of the three former stock exchanges: BVC TODAY Disciplinary Board Decree 2969 First legal mandate on Self Regulation Law 27/1990 The Colombia SX separated in two areas: (Cámara Disciplinaria de la Bolsa de Bogotá) FUNCTIONS: Oversight the accomplishment of Market rules DUTIES OF STOCK EXCHANGES: Rulemaking Oversight Enformcement Of Broker Dealers members of Colombian Stock Exchanges (Medellín, Bogotá, Occidente). DUTIES OF STOCK EXCHANGES Presence of independent members in the Disciplinary Board Business S R O CAPITAL MARKETS LAW (964/2005) AMV (SRO) Broker- Dealers All Securities intermediaries

7 LEGAL FRAMEWORK AND INCORPORATION OF AMV CAPITAL MARKET LAW 964 OF 2005 In July 2005, was adopted a new Capital Markets Law (964 of 2005) which substantially restructured the capital markets legal framework, including the role of self regulation. As a result, it became mandatory for every securities intermediary to register with and be subject to a Self Regulatory Organization (SRO). Decree 1565 of 2006 In May 2006, the government published a Decree that established the structure of the Self Regulatory Organizations in Colombia.

8 LEGAL FRAMEWORK AND INCORPORATION OF AMV INCORPORATION OF AMV In June 12 of 2006 the Autorregulador del Mercado de Valores de Colombia was formerly incorporated. RESOLUTION 1171 OF 2006 SF In July 2006 the government granted the authorization to AMV (not for profit organization) with the issuance of Resolution number 1171 and approved its interim rules pursuant to Resolution Since then, AMV has been acting as the only SRO in Colombia and, as a result of the size and number of participants of the market, it is expected that no other SRO will be created.

9 LEGAL FRAMEWORK AND INCORPORATION OF AMV CONSTITUTIONAL REVIEW The Self Regulation model was declared constitutional by the Colombian Constitutional Court on September, 2007

10 MAIN OBJECTIVES 1. INVESTOR PROTECTION 2. TRANSPARENCY MARKET INTEGRITY PUBLIC AND MARKET CONFIDENCE MORE BUSINESSES

11 SCOPE Intermediaries All the Markets: Fixed Income (BVC-ATS OTC) Equity (BVC) Derivatives Member Regulation (Excluding prudential issues) Market Regulation -Not issuers - Not listing standards

12 ADOPTED MODEL France Government led model -Government preserves significant authority -over securities market regulation- Germany Japan Flexibility model -Grant significant leeway to the market but government agencies set general policies and maintain enforcement capacity- UK Hong Kong Australia Colombia Cooperation model -Assigns broad range of powers to market participants in all areas of securities regulation but maintains strong and overlapping oversight of market activity through government agencies with robust enforcement US Canada Source: Market as Regulator: A Survey, Howell E. Jackson and Stavros Gkantinis, Harvard Law School, Oct

13 MEMBERS AMV

14 MEMBERS AMV Ordinary members Securities Intermediaries and related individuals. Associate members that are voluntarily self-regulated Persons that are not securities Intermediaries, but voluntarily decide to have direct access to a Colombia SX system, and as a result, should subject to the powers of an SRO. To become a member of AMV it is necessary to comply with licensing requirements set by the Financial Superintendency of Colombia, and with additional requirements established by AMV

15 MEMBERS AMV Broker Dealers Banks Number of Members Pension Funds Insurance Companies Financial Corporations Trust Companies Others 0 Members Financing Companies TOTAL: 134

16 MISSION AND FUNCTIONS

17 MISSION Provide securities intermediaries with services of: Regulation Supervision / Oversight Enforcement Certification of professionals PURPOSE To maintain a fair business environment, where the integrity and transparency of the market and the interest of its participants are duly protected. In order to accomplish it, AMV will: Take advantage of the knowledge and expertise of self regulated persons. Pursue high standards of corporate governance. Guarantee the participation of the various kinds of intermediaries, ensure a due management of conflicts of interests. Enhance coordination with public authorities to prevent duplication of activities.

18 FUNCTIONS RULEMAKING This function is accomplished by the issuance of self regulatory rules to be observed by AMV members. Those rules deal with different matters related to the intermediation activity, such as the definition of behaviors and practices that constitute market abuse, ethical aspects, conflicts of interest, and rules concerning investor s protection and the integrity of the securities market. SUPERVISION / OVERSIGHT Surveillance of trading activity and specific aspects of financial intermediaries behavior to detect eventual breaches to SRO rules and securities market regulation. ENFORCEMENT This function consists on investigating the facts and behavior of financial intermediaries to determine their disciplinary responsibility when there is a breach of the intermediary rules.

19 FUNCTIONS CERTIFICATION Licencing of market professionals Main stages PROFESSIONAL EXAM + PERSONAL BACKGROUND REVIEW

20 RELATIONSHIP AMV GOVERNMENT SUBSTANTIAL EFFORT OF COORDINATION WITH THE SFC No overlapping No gaps No arbitrages Mutual support and coordination: Information Evidence Investigations M o U OVERSIGHT OF SFC TOWARD SROs Management of conflicts of interests System of checks and Fulfillment of legal duties balances Approval of rules

21 CORPORATE GOVERNANCE Corporate Governance Structure ensures independence while allowing industry participation -Check and Balances - High Corporate Governance Standards and Policies - Corporate Governance Code - Independence from exchanges and government Public Interest

22 AMV s STRUCTURE Members General Meeting Board of Directors Disciplinay Board Support External Audit President Office of Market Analysis and Risk Member Committees Compliance Officer DIVISION OF OVERSIGHT AND INVESTIGATION DIVISION OF LEGAL AFFAIRS AND ENFORCEMENT DIVISION OF RULEMAKING DIVISION OF ADMINISTRATIVE, FINANCIAL AND IT DIVISION OF CERTIFICATION OVERSIGHT SUBDIVISION INVESTIGATION SUBDIVISION ENFORCEMENT SUBDIVISION LEGAL AFFAIRS SUBDIVISION RULEMAKING SUBDIVISION ADMINISTRATIVE AND FINANCIAL MANAGEMENT SUBDIVISION IT SUBDIVISION EXAM SUBDIVISION

23 CORPORATE GOVERNMENT BOARD OF DIRECTORS Industry Directors (1) Banks Industry Association (1) Pension Funds Industry Association (1) Broker Dealers Industry Association (1) Trust Companies Industry Association (1) Others Intermediaries B F C O x Independent Directors Finance & Audit Committee Admissions Committee Rulemaking Committee Corporate Governance and Nominating Committee

24 DISCIPLINARY BOARD Independent Members Industry Members Appeal Appeal Hearing Panel Disciplinary Hearing Panels Decision Disciplinary Hearing Panel

25 MEMBER COMMITTEES Equity Committee Debt (Fixed Income) Appointed by the Board of Directors Appointed by the President of AMV The purpose is to have extensive member / securities industry input on rules and policies, in order to obtain the benefits of self-regulation

26 - Affiliate membership IOSCO April Request for membership COSRA September 2007

27 WEBSITE

28 THANK YOU