Development of Emerging Capital Markets: Opportunities, Challenges and Solutions

The Growth and Emerging Markets Committee of the International Organization of Securities Commissions (IOSCO) has published its final report on the development of emerging capital markets on 30 October 2020.

The report discusses both the opportunities and challenges - including specific challenges presented by COVID-19 - for emerging markets jurisdictions (EMs). Acknowledging that there is no one size fits all solution with regard to the development of capital markets, the report sets out several recommendations for EMs to consider as they develop their capital markets. Five key recommendations are set out:

• 1: Policy makers and regulators should develop a holistic strategy for the development of capital markets.
• 2: Regulators should seek to ensure that capital markets are fair and efficient for capital raising. Increasing institutional investor participation, providing
• diversified investment choices, and ensuring market confidence should be high priorities on their agenda.
• 3: Securities regulators should have adequate powers, proper resources and the capacity to perform their functions and exercise their powers.
• 4: Jurisdictions should establish strong national and international cooperation arrangements to develop capital markets with the key involvement of the securities regulator.
• 5: Regulators and market participants should develop and implement efficient roadmaps for investor education and guidance.

The full report can be found here.