Capital markets development

The project consists of private and public components, to be implemented respectively by the Financial Executives Institute of the Philippines (FINEX) and the Securities and Exchange Commission (SEC). Activities under the private sector component will fall into three categories. (1) FINEX will develop a private sector Automated National Trading, Clearing, and Settlement system (ANTCS), which will both enhance the SEC"s regulatory capacity and serve as a means of integrating the Philippines" two stock exchanges (the Manila and the Makati exchanges) into one network. Technical studies required to design and establish ANTCS will be funded on a progressively increasing cost-sharing basis with the private sector. (2) A market information service will be established to gather investment information (e.g., credit and bond ratings, securities investment analysis, and indicators of corporate and industry performance) and make it available to the investment public on a fee basis through a data-telecommunications network. A challenge grant of $1 million will be provided to stimulate private investors to develop and operate this service. The project will finance computer hardware, software, and TA for both ANTCS and the market information service. (3) To professionalize capital market institutions, FINEX will (a) organize short-term, fast-track training programs, workshops, seminars, and on-the-job training; (b) help to establish a private sector Institute for Capital Markets Management, Research and Policy, probably through a subgrant or contract with an existing business education institution; and (c) continue its own efforts in policy reform and advocacy. The public sector component will focus on improving the SEC"s capability to oversee a self-regulating capital markets structure. This component will help the SEC: (1) conduct technical studies on such issues as capital markets unification and automation, the workings of a self-regulated market in the Philippine setting, and SEC"s role in such an environment, etc.; (2) implement policy, administrative, and regulatory reforms, e.g., eliminating SEC investment evaluations, streamlining its functions and eliminating overlap, and promoting automated trading, clearing, and settlement; (3) restructure the SEC as an organization and develop a procedures manual; and (4) enhance SEC"s automation systems. Extensive short-term technical and management training will provided to SEC in such areas as: ANTCS operations, new systems and procedures, automation, records management, values and service orientation, etc. SEC will also be helped to develop technical training curricula and strengthen its personnel and career development systems.