What role does Asobolsa play in the development of Colombia’s securities industry?

LOPEZ: Asobolsa is an association that joins all of the brokerages in Colombia. Our mission in Colombia is to grow the market. We are helping to grow the market by bringing in new products, keeping relations with the government and our suppliers, and trying to become more efficient in our processes. We are the facilitators for all of this. This is our aim and objective. We maintain constant communications with our brokerages. We try to understand the problems that they have and the new initiatives that they are implementing. Our role is to bring all of them to the table and discuss the situation. We decide what is the best for our industry. According to this, we then approach the government and try to have these enacted. That is the way we help. We bring all of these things to the table and try to decide what is the best for the sector.

How has regulatory intervention helped facilitate the growth and sustainability of Colombia’s capital markets? What needs to be done in order to better enable the country’s securities industry?

LOPEZ: We are consistently in contact with the government. We approach the government when we want to have an initiative implemented. We try to get them to help us through decrees or laws depending on the situation. The government does the same thing as well. The government approaches us when they see the market developing in one direction or another. When they need to change something they call us with a proposal and ask for our comments. The government wants us to study their laws and, according to that, we try to reach a common ground based on our needs. In other words, the government just doesn't do what we want them to do. They ask us first because if the things we want to change are not drastic then they will usually implement them. We really think that we have the right regulations in place to grow. To be honest we are happy with the current laws and regulations. We know that eventually, according to the direction the market is taking, the government will have to make bigger changes. When this time comes we will talk to them and negotiate the laws. I think the government is very objective and responsible. They know that we are comfortable with the laws and regulations we have now. As a result, we do not currently need any big changes to the laws and regulations in order for the market to grow.

MILA (Integrated Latin American Market) is the second largest market in the region in terms of market capitalization and number of quoted stocks. At the end of 2012, MILA consisted of a total market capitalization of $678bn. What is Colombia’s overall contribution to the MILA market? What impact will the introduction of Mexico into MILA have on Colombia’s securities market?

LOPEZ: I think that the three countries have been contributing in any way they can. The most important thing the governments have to do with respect to MILA is to enact laws that help facilitate trade. It is very difficult to conduct business with the other three countries because the laws are different. We have to ensure that all of the laws match up and that is what we are working on now. I would say that the most important thing that Colombia has done within MILA is bring more investors into the country. It is incredible to see how Colombia has changed after MILA. Peruvians and Chileans are looking to Colombia as the country where you have to go to invest. Colombia is a big and stable country. It is a good place to invest and they know that now. We are all in the same market because of MILA. In a sense, MILA turns three countries into one market for investments. I think the most important thing to do is to bring investors here. Colombia welcomes investors from outside. That is something we feel really proud of. The entrance of Mexico into MILA will have a big impact. Mexico is a very important country. It is a country that facilitates our business because of the language.

How has Colombia’s past reputation with regards to safety and security impacted investor sentiment throughout the industry? What role does Asobolsa play in attracting further FDI and buyers into Colombia’s securities sector?

LOPEZ: Colombia’s past reputation had made an impact on investor sentiment. In the past, the country was almost at war with itself and we were a part of difficult times. However, Colombia is different now. The country had the strength to overcome the position that we were in. Now, we are in a great position. The mafia is very small and we are in the process of peace talks with the guerrillas. So, it is not the same situation that it used to be. I invite outside investors to come to Colombia. Colombia is a great country with very nice people. Colombia is very stable and democratic. Foreign investment is very important for the country. For instance, foreign investments are close to 30% of the stock market and growing. Investor confidence is increasing in Colombia. This is very important for speculation investment. Fixed income brings a lot of money to Colombia. It is incredible. We negotiate more than $1.2bn daily, which brings a lot of liquidity to the market. This is a result of the major investors making investments in Colombia. We want to stress that Colombia is stable and there are a lot of opportunities for investments. We partake in a lot of things to help promote this message. We publicize, speak with investment banks that come to Colombia, and travel outside of the country to help draw in investments. We have two types of investors. There are the fixed investors, which bring companies or subsidiaries to Colombia. Then there are the banks that invest in equity, fixed income, and speculation. We want all of them and we have all of them. Of course we like fixed investments because they help increase the employment rate. That is one thing we need to focus on. We need to create employment opportunities because our population is roughly 46m and unemployment is around 10.2%.

What are your future projections for Colombia’s capital markets? Which indicators are showing the most positive trends and which remain challenges?

LOPEZ: There is a big change occurring for the sector. The brokerage industry in Colombia is in a very special position. There have been a lot of investors, now fixed investors, which are buying. There are a lot brokers now and they are bringing new standards to the industry. They are bringing new products and a different viewpoint on the market. This is good for us because the market is changing. If the market is not evolving then we have to make changes. Brokers are investing in new technology, new products, analyzing the markets with new people, and bringing new ideas to the industry. They do this because they have the money, the standards, and the know-how. The new brokers are bringing the know-how and this is what is going to help make the market stronger. I think we are now feeling those changes. We are moving more towards asset management, and offering more products and derivatives. We have made some developments in derivatives but we are not where we should be. As a result, we are developing it very slowly and we will eventually find a way to do it.