FREE TRADE IN FINANCIAL SERVICES

Free trade in financial services (FTFS) is intended to improve the integration of Andean financial markets by enhancing the efficiency of the saving-investment process (lower financial costs for the user, a variety of financial instruments, better risk management and a positive impact on competitiveness).   

HARMONIZATION OF PRUDENTIAL CRITERIA

The Harmonization of Prudential Criteria originated in the Andean Development Corporation’s “Project to Standardize Andean Prudential Regulation” (1999), one of whose objectives was to facilitate FTFS.  The practical difficulties that arose in achieving legislative standardization following the initial discussions led the region’s banking superintendents in 2000 to establish the so-called “Harmonization of prudential criteria” objective.  This calls for an effort to standardize the general guidelines for regulating and supervising the banking systems in the Andean countries. 

The First Meeting of Government Experts on the Harmonization of Prudential Criteria took place in Lima in May 2003.   

INTEGRATION OF STOCK EXCHANGES   

Stock Exchange Integration had its start at the Sixth Meeting of the Andean Community Advisory Council of Treasury or Finance Ministers, Central Bank Presidents, and Economic Planning Officers (June 2003), which agreed to work on the formation of an Andean financial market.  It was later, at the Fifteenth Andean Presidential Summit (July 12, 2004), that it was agreed to instruct the Advisory Council of Treasury or Finance Ministers, Central Bank Presidents and Economic Planning Officers to, with the cooperation of the authorities that supervise and regulate the financial sector, expedite the integration of Andean financial markets, in order to form an Andean financial market in the medium and long terms.   At that same Summit, the Advisory Council of Treasury or Finance Ministers, Central Bank Presidents, and Economic Planning Officers was asked to draw up a proposal to create an Andean Capital Market for securities issued by the public and private sectors and Andean financial institutions, and to foster the adoption of the “Special Regime for Andean Regional Issues” prepared by the Andean Development Corporation. 

After consulting the Member Countries, the General Secretariat presented Proposal 155 on the Creation of the Andean Committee of Stock Exchange Regulatory Authorities followed by the approval of Decision 624 (July 18, 2005) creating the Andean Committee of Stock Exchange Regulatory Authorities made up of the heads of the Superintendancy of Pensions, Securities and Insurance of Bolivia, the Superintendency of Securities of Colombia, the Superintendency of Companies of Ecuador,  The Peruvian National Supervisory Commission for Companies and Securities, and the National Securities Commission of Venezuela.