Capital Market Reform in Asia: 7th Round Table

Post-event Statement

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Background

The round table was established in 1999 in the aftermath of the Asian financial crisis. It has offered an annual forum for discussion among Asian securities regulators, experts, practitioners, scholars and international organizations on specific topics from the viewpoint of capital market reform in Asia.

The main topics of this year’s round table are: 

• Financial Policy Landscape
  Structure follows Strategy: What is the “optimum” financial structure and how should a policy maker structure the regulatory framework to suit national financial policy objectives? Since lines between different financial service providers are becoming more blurred and “borderless”, the traditional regulatory structure of regulation along product lines – banking, insurance, securities and retirement funds – has been called into question. Greater internalization of financial services in large integrated service providers may also bring about a higher potential for conflicts of interest. How should policy makers think about the overall financial sector policy and structure, sequence any desired reforms and achieve higher efficiency, greater financial stability and protection of savings and investments. Based on the report of the OECD and others, Asian securities market regulators could address the policy implications of those market developments.
   
• Integration of Capital Markets in the Asian Region
  Under WTO rules, greater intra-regional trade and high rate of financial savings in Asia, financial markets in Asia are beginning to integrate at a faster pace. The Asian Bond Market Initiative is expected to promote development of local and regional capital markets and facilitate utilization of regional savings for regional investments. The recent initiatives to introduce Asian Bond Funds (ABF1 and ABF2) have been warmly received in the region. At the same time, bilateral arrangements are beginning to be made to allow the greater convergence of regulatory standards in the Asian region to facilitate cross-border trading or listing of financial products. How could Asian financial regulators and policy-makers help to facilitate faster integration within the Region?
  
  
• Investor Education
  In the financial markets an increasing amount of risk is transferred implicitly or explicitly to the household sector. This is particularly true in the context of pension reform where corporate pension plans are generally shifting from defined benefit to defined contribution. At the same time it is important to foster better knowledge among individual investors in order to attain more efficient securities markets. The OECD has conducted a comprehensive international study on financial education, the executive summary of which has been distributed. Asian securities market regulators could discuss the implications for policy of this study.
  
  
• Developments in Venture Capital and Private Equity since the end of the “Tech Bubble”
  The ability to provide financing to high growth SMEs is regarded as important to enhance the resilience of the economy. In the late 90’s efforts were made among OECD countries to develop specialized exchanges to assist SMEs in attaining public listing. Since then the markets have experienced the bursting of the bubble and the “growth exchanges” do not seem to have had satisfactory results. It would be a good time to reassess prospects for financing high growth SMEs through markets. Discussion will cover applicability of OECD experience to emerging markets where family-owned companies are dominant in general.
  
  
• Governance Issues Related to Securities Markets
  There is controversy about what is the most effective way of governing market infrastructure institutions. The widespread focus on corporate governance in general has also raised questions concerning the governance of market infrastructure institutions. Consolidation amongst market infrastructures, and their perceived growing market power, has led to controversy about whether there should be greater legislative or regulatory intervention in their governance. There is mounting concern about the presence of conflicts of interests at market infrastructure institutions, and about whether governance mechanisms should be put in place to minimize or manage the occurrence of such conflicts.
  

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Outputs

• Summary of proceedings
• Materials published on the ADBI and Organization for Economic Cooperation and Development (OECD) websites.

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How to Apply

Participation is by invitation only.

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Language

English

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Cosponsors

This is jointly organized with the OECD in cooperation with the Government of Japan.