Securities mum on bill could hobble thriving Bourse, traders warn
Santo Domingo.- Dominican Republic Bourse Traders Association (APB) director Clara Gonzalez warned Monday that Securities superintendent Gabriel Castro refuses to organize a debate between the public and private sectors prior to an amendment of Law 19-00 and stated concern that a regulation could be approved that would brake the growth sector’s.
She said the regulator has rejected nearly all of their observations to draft laws -five in less than a year- without explaining the criteria to not accept them or open a debate to reach agreements.
In a visit to Diario Libre editor-in-chief Adriano Miguel Tejada, Gonzalez said the proposed legislation aims to change the sector’s operational framework to return to the commission system in place in 2006, when there were just five stock brokers and transactions tended not to exceed RD$1.0 million. In this model, "there are two buying and selling, the parts agree on a price and based on this a commission is generated."
She said now around RD$4.0 billion are traded each day, there are 17 brokerage houses and work similar to an investment bank "where dealers trade, take risks and then divide into fractional quantities towards the public both institutional as the small investor."
APB legal advisor Omar Victoria warned that the bill changes the business model which Law 19-00 stipulates, such as OTC trading (stock exchange) and removing the second and creating "a mechanism they call OTC, who all told replicates all obligations of the market."
"We do not understand why the government wants to close down a way that the same government is using for funding and development," Victoria said, noting that despite Castro’s pledged to form a working group involving the public and private sectors, that "hasn’t happened."
Gonzalez said the traders want to debate the amendment not only with the Securities Superintendence, but also with the Central Bank, Finance Ministry, Internal Taxes and the Economy Ministry "which interact in a way or another (…) in the process of buying and selling securities."