1. How we are working to develop the Stock Market?
Sergio Luiz Cerqueira Silva
São Paulo Stock Exchange
WASHINGTON, APRIL 15, 2003

2. 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 ?

3. Macroeconomic level must provide a healthy environment for the development of a sound microeconomic structure

4. 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
CHALLENGES FOR
EXCHANGE’S
COMPETITIVENESS
New demands from investors
Prominent role of institutional investors
Recover the confidence
Investors became much more demanding after the scandals in US stock market

5. Exchanges in Latin America have an additional challenge: face the problem of low volume and, in consequence, the low scale of operations

6. Exchanges need to improve
Accessibility
opportunity for a wider range of investors
adequate infra-structure for:
individual investors
institutional investors
Efficiency
minimize fiscal burdens
efficient settlement conditions
local market consolidation
Transparency
enhance Corporate Governance
Liquidity

7. Several improvements at BOVESPA and other Latin American exchanges have been noticed

8. BOVESPA provide high level of Accessibility
Electronic Trading System - Mega Bolsa
2000 terminals widespread through 113 Brokerage Houses
Home-Broker/ After-Market
Internet trading
Connectivity
Device for remote access and broader connectivity
Promotes retail investors’ trading
Possibility of linkage to routing and trading systems

9. Complementary services Efficiency
Independent clearing house DVP and full services in custody and depository services
Electronic trading for corporate bonds
Developed derivatives market – stock market (BOVESPA) and mercantile and futures (BM&F)
Efficient settlement routine
Migration to an electronic trading environment
Sophisticated and safety strategies

10. Regulatory improvement Transparency and Corporate Governance
Protection to
minority
Shareholders
Recover market’s confidence
Corporate
Governance
Disclosure
Source: McKinsey

11. Infra-structure, regulatory framework for local and cross border investment are completed.
What we still have to do?

12. Main achievement for a sustainable capital market
Create a “consensus” about the importance of the capital market:
Adequate Taxes regime
To attract new participants: companies and investors
Enlarge individual’s investment by facilitating the access:
Internet Access
Investment Clubs
Strengthen the domestic investment:
Improve the knowledge about the market mechanisms through Strong educational activities for investors

13. How we are working to develop the Stock Market?
Sergio Luiz Cerqueira Silva
São Paulo Stock Exchange
WASHINGTON, APRIL 15, 2003