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Latin America Investment News on Viva Tropical

New Rules Wanted for El Salvador Stock Market

Article Summary:

The Stock Exchange of El Salvador recently asked the government to reform existing legislation by removing barriers to investment associated with financing, through identifying and promoting funding for infrastructure projects and supporting the public and private sectors.

Original Article Text From El Salvador via Google Translate :

Ask law reform Securities Market

To somehow mitigate the slow economic growth dragged the country will need many things, but one that could revive the productive activity and investment flows passing through the capital market more dynamic and make the necessary reforms to the Securities Market Law .

At least that’s the claim of the Stock Exchange of El Salvador (BVES), which recently asked relevant authorities to reform the current legislation in order to demolish the barriers to investment road connecting the financing, by identifying and promoting funding for infrastructure projects and support public and private sectors.

“Out of many figures is known as securitization or issuance of debt, can become tools perfectly feasible to finance projects as it has done the Chilean market, where pension funds have become partners for development”, said the president of the Exchange, Rolando Duarte.

In Chile, Peru and Colombia, for example, the construction of roads, power plants, ports and water treatment systems, among other works millionaires with funds from the Pension Fund Administrators (AFP), to be completed projects generate enough profit to pay the members of the AFP from 9 or 11% return.

Quite the opposite of what is paid to savers of the pension system in El Salvador, because the government takes money to pay the pensions of retirees and INPEP ISSS, and requires the AFP to buy securities that pay only 1.5%.

In that sense, Duarte stressed: We will not see spending another year watching how others manage to take those steps (to have higher returns) and generating a high impact in terms of growth in their economies. ”

The Exchange also insisted for the umpteenth time, approving the Investment Funds Act. “There is already a bill that was consensual with the various market participants, which was sent on Jan. 20 to the Finance Committee for approval by the Legislature,” he said.

In addition, the stock market sought to create the concept of “perpetual bond” as at the time did England during the Napoleonic Wars, and as recently as Mexico conduct.

Duarte concluded, “can not compete effectively in a globalized world of great marathoners, if you do not have the ‘dynamo’ I generate competitive advantage required to succeed.” -EDH

Link to Original Article:

From El Salvador

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