Development of a Trade Repository for the cross-border clearing and settlement of sovereign securities for Central America
- Beneficiary country(s): Regional
- Sector: Finance
- Year: 2021
- Beneficiary Executing Agency:
The Council of Ministers of Finance of Central America, Panama, and the Dominican Republic (COSEFIN), the Central American Monetary Council (SECMCA), and the Association of Capital Markets of the Americas (AMERCA)
The capital markets of the Central American Integration System (SICA) lag many developed countries. Such underdeveloped capital markets together with a lack of local institutional investors severely limit the amount and maturity of funding available to a country and can substantially increase the funding and currency risks in managing national public debt. In this sense, collective efforts of the region must be garnered to address these challenges through the modernization and development of capital markets, with a particular focus on the public debt markets.
Support the development for a Central America Trade Repository (TR) that will enable the cross-border clearing and settlement of sovereign and corporate securities. To this end, the project aims to evaluate the feasibility of establishing a regional market infrastructure with necessary hardware, software, and regulatory reforms to centralize the information of public debt securities traded across the region.
A feasibility study of the Central America Trade Repository that supports clearing, settlement, and custody services. Based on the findings and lessons learned from the proposed activities, this project shall highlight the positive impact of integrating capital markets in the region, as well as the feasibility and sustainability of the newly introduced TR system. This project can reduce the financial risks in the capital market through centralizing the collection, storage, and dissemination of securities transaction information, along with the introduction of DVP schemes and financial safeguard systems.