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How we are working to develop the
Stock Market?
Sergio Luiz Cerqueira Silva
São Paulo Stock Exchange
WASHINGTON, APRIL 15, 2003
How to make capital markets viable

adequate legal framework

proper regulatory and
supervisory framework

efficient infra-structure for
trading securities

efficient and reliable
clearing and settlement
systems
STRENGTH
CAPITAL
MARKET ?
Macroeconomic level must provide a
healthy environment for the development
of a sound microeconomic structure
Major challenges for the Exchanges
Cross border trading
Issuers and investors are expanding their
horizons beyond their home markets
International cross-listing
Cross-listing of companies in the U.S. and also
in other markets
New demands from investors
•Prominent role of institutional investors
Recover the confidence
•Investors became much more demanding
after the scandals in US stock market
CHALLENGES FOR
EXCHANGE’S
COMPETITIVENESS
Exchanges in Latin America have an additional
challenge: face the problem of low volume and, in
consequence, the low scale of operations
Exchanges need to improve

Accessibility
–
–
opportunity for a wider range of investors
adequate infra-structure for:



Efficiency
–
–
–

minimize fiscal burdens
efficient settlement conditions
local market consolidation
Transparency
–

individual investors
institutional investors
enhance Corporate Governance
Liquidity
Several improvements at BOVESPA and
other Latin American exchanges have been
noticed
BOVESPA provide high level of
Accessibility

Electronic Trading System Mega Bolsa
–

Home-Broker/ After-Market
–

2000 terminals widespread
through 113 Brokerage
Houses
Device for remote access
and broader connectivity
Promotes retail investors’
trading
Internet trading
Connectivity
Possibility of linkage to
routing and trading
systems
Complementary services
Efficiency

Independent clearing house
DVP and full services in
custody and depository
services
 Efficient

Electronic trading for
corporate bonds
Migration to an electronic
trading environment

Developed derivatives market
– stock market (BOVESPA)
and mercantile and futures
(BM&F)
settlement routine
 Sophisticated
strategies
and safety
Regulatory improvement
Transparency and Corporate Governance
Protection to
minority
Shareholders
Corporate
Governance
Recover
market’s
confidence
Disclosure
Source: McKinsey
Infra-structure, regulatory framework for local
and cross border investment are completed.
What we still have to do?
Main achievement for a sustainable
capital market

Create a “consensus” about the importance of the capital market:
–
–

Enlarge individual’s investment by facilitating the access:
–
–

Adequate Taxes regime
To attract new participants: companies and investors
Internet Access
Investment Clubs
Strengthen the domestic investment:
–
Improve the knowledge about the market mechanisms through Strong
educational activities for investors
How we are working to develop the
Stock Market?
Sergio Luiz Cerqueira Silva
São Paulo Stock Exchange
WASHINGTON, APRIL 15, 2003