Capital Markets

Ukraine Capital Markets Development – For USAID, FMI is implementing the Capital Markets Development Project to help Ukraine establish a vibrant financial sector, promote a dynamic private pension industry, and generate new pools of capital for investment, economic growth, job creation, and poverty alleviation. This project will implement initiatives in three key areas: legal and regulatory reform, financial instrument development, and institutional strengthening. FMI will address gaps in the legal environment for businesses by promoting passage of needed legislation such as a Company Law and a new Securities Law. Additionally, FMI will work to remove the legal and regulatory impediments for issuing and trading securities. Initiatives will also be designed to improve financial disclosure and deepen corporate governance reforms. For pension reform, FMI will focus on developing prudential regulation and operational guidelines for the nascent private pension fund sector. FMI will also support the development of necessary IT systems, rules for private asset managers, and monitoring and enforcement initiatives. The project will assist GOU policymakers in addressing selected concerns of the public pension system, such as fiscal soundness, administrative efficiency, and actuarial best practices. Period of Performance: 2005-2010

West Bank/Gaza Financial Markets Reform, Phase II – This USAID project expands FMI’s previous efforts to develop capital markets and non-bank financial intermediation in the West Bank and Gaza. FMR-II has six principal components: (1) development of the financial markets’ legal and regulatory framework, including the reform of company, bankruptcy, and other commercial laws; (2) introduction of new financial instruments, with a focus on mortgage bonds and debt obligations; (3) financial restructuring, which provides firm-level technical assistance on problem loans, and assists Palestinian banks with credit analysis and bankruptcy work-outs; (4) financial markets education, which involves working with private sector associations and universities to implement training programs to targeted audiences; (5) the Emergency Loan Program (ELP), which is extending credit to SMEs through selected Palestinian banks; and (6) land reform (titling, registration, surveying, etc.) and mortgage finance, which are focused on improving the titling and registration process in order to permit mortgage financing. In spite of the challenging work environment, FMI has made substantial progress in all areas. Period of Performance: 2003-2007

India Modernization of the Commodity Futures Market – FMI first conducted an assessment of the Indian commodity futures markets and recommended steps to further develop the contribution of these markets to growth in the agricultural sector. This included a detailed review of exchange rules and operations, comparing them to commodity futures markets best practices around the world, and development of a template which established the operations and practices of successful commodity futures exchanges. FMI subsequently implemented a 2-year program to strengthen the regulation and supervisory framework for commodity futures markets in India. FMI assisted the futures market regulator and leading Indian commodity exchanges in developing the legal, policy, regulatory, and operational environment necessary for promoting a vibrant and safe commodity futures market in India. The Project addressed the need to strengthen surveillance and enforcement, and the development of institutional infrastructure for an efficient commodity futures market. Period of Performance: 2006-2007

India Commodity Futures Markets Development Project – For USAID, FMI conducted an assessment of the Indian commodity futures markets and recommended steps to further develop the contribution of these markets to growth in the agricultural sector. Key tasks included assessing the institutional strengths and weaknesses of the futures markets’ regulator; designing a 4-year work plan for further development of the markets; implementing a short-term stakeholder awareness campaign; and conducting two training programs for Government of India regulators and senior commodity exchange staff. FMI also organized two U.S. study tours for senior Indian delegations. Period of Performance: 2004

Ukraine International Business Standards & Corporate Governance – This USAID funded project focused on transforming Ukraine’s corporate culture and had five integrated components: (1) work with businesses and non-governmental institutions to promote international disclosure standards and the free flow of reliable financial information; (2) improved government support for corporate governance through assistance to the National Bank of Ukraine in conveying to the public the state’s role in promoting best corporate governance practices, and work with leaders in the Verkhovna Rada to promote legislative reforms; (3) design and implementation of seminars and workshops on investor dispute resolution, shareholder rights, and enforcement for regulators and judges; (4) improved corporate governance in the private sector through assistance and training for directors, managers, and executives across multiple sectors; and (5) development of Ukraine’s first curriculum on corporate governance, which was implemented at leading law and business schools throughout the country. FMI also reviewed and proposed legislation for secured transactions and mortgage obligations, organized a Corporate Governance Task Force to serve as a public-private forum for securities markets participants to discuss regulatory reforms, orchestrated the drafting of new bond regulations, and evaluated the possible use of a DCA guarantee in a local effort to pool debt offerings from selected small-medium enterprises. Period of Performance: 2001-2004

Bulgaria Capital Markets Regulations Project – Under this USAID project, FMI served as the principal advisor to the Bulgarian Securities Commission (BSC) and assisted the Commission to strengthen its institutional capacity to regulate the capital markets. FMI also worked closely with other Bulgarian institutions (Finance Ministry, Central Bank, Parliament, Bulgarian Stock Exchange, and self-regulating organizations) to develop the legal and regulatory framework for the securities markets. For the BSC, FMI prepared procedures manuals for the various departments and provided the required systems training; designed and implemented a computerized system for monitoring stock trades and debt transaction; recommended, developed, and trained a new office devoted to accounting reform and financial disclosure; and drafted and secured passage of a major reform of the Bulgarian Securities Law. For market participants, FMI prepared and distributed a corporate governance manual and conducted multiple seminars on financial disclosure and accounting reform; worked with the Finance Ministry to harmonize Bulgaria’s capital markets framework with European Union standards; evaluated the Bulgarian government’s proposal to consolidate financial markets regulation under a unified regulator; and worked with several SROs to promote shareholders’ rights and investor education. Period of Performance: 2000-2003

West Bank/Gaza Capital Markets Development – For USAID, FMI implemented a capital markets development program in West Bank/Gaza focused on fostering private sector rebuilding and growth. Technical assistance on financial restructuring was provided to address the widespread insolvency in the private sector. The Palestinian Securities Exchange (PSE) received assistance on rule changes including disclosure requirements and measures to increase liquidity and volume. Additionally, FMI developed a set of non-bank financial initiatives in the mortgage finance, leasing, insurance, and pension sectors. These initiatives included administrative rule drafting and assistance to private sector actors. As part of its training initiative, FMI provided courses to financial intermediaries and worked with colleges and universities to develop curricula. FMI also provided a forum for communication between private sector development initiatives and international donors and investors that put qualified Palestinian firms in touch with sources of foreign capital. Period of Performance: 2000-2003

Ukraine Capital Markets Development – For USAID, FMI provided technical assistance to develop the Ukrainian legal and regulatory framework for capital markets. FMI experts drafted major pieces of legislation, which led to the establishment of the securities market, creation of an independent securities commission, and reform of the company law. The project, which was extended three times, focused on institutional development of the securities commission by establishing effective market monitoring and enforcement rules and procedures, accounting reform, financial disclosure, and education and training programs. FMI also provided policy advice to senior government officials on clearance and settlement systems, registries, and depositories, and conducted a landmark financial sector assessment, focusing on the legal, regulatory, and judicial requirements for an environment conducive to economic growth, investment, and poverty alleviation. Additionally, the team carried out a comprehensive corporate governance and shareholders’ rights program; published and distributed 3 million copies each of four brochures on capital markets; and provided technical input to over a dozen radio and television programs. Period of Performance: 1996-2001

World Bank IOSCO Securities Laws Comparative Analysis – For the World Bank, FMI worked with the securities markets regulators in a number of developing countries to analyze each nations’ securities laws. FMI analyzed these securities laws for their compliance with the IOSCO Best Practices Principles for Securities Markets (International Organization of Securities Commissioners). Period of Performance: 2000

Kazakhstan Securities Market Development – FMI assisted securities market development as advisors to the Securities Commission. Activities included design of the legal and regulatory framework for a Securities Commission, implementation of the required training for regulators and market participants, development of a capital markets monitoring unit for the Government, and assistance in the formation of a trade association to engage in market self-regulation, enforcement, and information dissemination. FMI drafted the Law on Securities and Stock Exchanges and the Law on Investment Companies. Period of Performance: 1994-1995

Options Clearing Corporation and Stratus Computers (Korea) – The Options Clearing Corporation is the largest clearing and settlement organization in the world for securities options products. Stratus Computer is the leading continuous processing computer manufacturer providing computers for securities exchanges throughout the world. On their behalf, FMI outlined the management consulting and training areas critical to the efficient functioning of a futures exchange, including exchange rules, governance, management, and regulation; systems to ensure financial and trading integrity; design and marketing of commodities contracts; and education and training for regulators, exchange participants, and end-users of exchange-traded instruments. Period of Performance: 1994-1995

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