Cross-border stock trading has a long way to go

Cross-border stock trading has a long way to go
Posted: 2:41 AM | Jun. 30, 2004
Inquirer News Service

OFFICIALS of the Securities and Exchange Commission are keen on allowing cross-border trading on the stock exchange but they admit that there is still a lot of work to be done before they can go ahead with listing and trading of companies registered in other countries.

Registration requirements related to cross-border trading still have to be established in the Philippines, SEC Chairperson Lilia Bautista said.

The law requires companies to be registered first with the SEC before they are traded or listed on the stock exchange.

Bautista, who attended a June 19 ASEAN capital markets forum meeting in Bangkok, said most ASEAN members were still consulting one another on the standards that would make an integrated capital market possible.

According to a working paper discussed in the forum, integration of capital markets would make the ASEAN region more self-reliant, and development of a regional capital market in Asia would improve the region's economies by reducing reliance on bank loans.

With INQ7.net

The Prudent Investor: Cross-border stock trading should be one of the priorities of the SEC and the PSE in the pursuit of the development of our largely outmoded capital markets.

First it allows local investors to tap opportunities within the region which has thus far been the primary beneficiary of the US-China centric global growth engine. Second, it would dissuade domestic funds from habitually fleeing the local market out of the perceived 'lack of opportunities' and lastly, volume turnover would most likely improve as dometic investors would gradually learn of the intricaties of stock market investing. As volume improves, the sophistication of new products or instruments for investments would eventually emerge which should likewise expand the access of capital by local investors and entreprenuers.