InterAm Database

National Law Center for Inter-American Free Trade

ROMERO ARTETA PONCE

ABOGADOS

Av. 18 de septiembre 213 y 6 de diciembre, piso 9

Tel. (593-2) 563332/563334/563338

Fax: (593-2) 563718/521394

P. O. Box 17-03-719

Telex: 22364

Rometa Ed.

Quito Ecuador

CAPITAL MARKETS LAW IN ECUADOR

The growth of Security Markets in several countries under development compelled the Government of Ecuador to promote such security markets in this country, for which reason a new law became necessary to allow the investment of foreign capitals.

The Ecuadorian security market originated with the Capital Markets Law, which was issued on 28 May 1993 and recorded in the Supplement to Official Register No. 199.

Within the Programrne of the present Government of Ecuador aimed to achieve agility and modernization in the Ecuadorian Stock Market and allied markets, the Capital Markets Law was issued, in order to promote the stock market and other capital markets and make them more efficient. Thus, such markets will be better organized, integrated and transparent; transactions will take place at stock markets, stock dealers, risk qualification companies, securities and stocks centralized compensating balance and liquidation organizations, investment funds, and fund administrators.

This law shall in turn require a legal and financial complement in order to establish financial and legal systems guaranteeing foreign investments. Therefore, the Law for Financial System Institutions was also issued.

Obviously, this is a new market still under development, but thus far has achieved acceptable levels and it is anticipated that in the next few years Ecuador will have a modern capital markets system making possible internal and external savings, generating favorable conditions for economic growth, and additionally, create new employment sources, reduce inflation and poverty and as a logical consequence promote Ecuador's population progress and well-being.