Collective Investment Schemes in Emerging Markets

Collective Investment Schemes in Emerging Markets A Report of the Emerging Markets Committee of the International Organization of Securities Commissions July 2006 2INDEX 1. Introduction...................................................................................................................3 2. Methodology and processing of data ........................................................................4 3. Characterization and segmentation of the responses..............................................5 4. Aspects referring to the financial markets in the countries under study .............7 5. The CIS industry and its practices in EMC countries..............................................9 6. Conclusions and further developments ..................................................................20 Annex 1: Possible issues for future discussion within EMC..................................23 Annex 2: Responses................................................................................26 31. Introduction In October 2003 at its meeting in Seoul, the IOSO Emerging Markets Committee (EMC) mandated its Working Group on Investment Management (WG5) to carry out a mandate on the state of the Collective Investment Funds (“CIS”) industry in emerging markets. Through a survey WG5 would examine the size, structure and functioning of the industry, as well as the related regulatory framework. A questionnaire was drawn up and distributed at the EMC meeting in Egypt, December 2004. It was completed by 42 jurisdictions. This means that the results presented here represent by some distance the broadest survey ever carried out on this topic. This report, based on the data collected in the questionnaire, was presented and approved for publication by the EMC at the Hong Kong meeting, in June 2006. The survey’s main objective was to make both quantitative and qualitative assessments of the growth and development of the mutual fund industry in emerging markets. The results play an invaluable role in providing the EMC with a basis for planning future areas of study. The jurisdictions that responded to the questionnaire were: # Jurisdiction # Jurisdiction #Jurisdiction # Jurisdiction 1 ALGERIA 11 CZECH REPUBLIC 22MALAYSIA 33 ROMANIA 2 BAHAMAS, THE 12 EGYPT 23MALTA 34 SLOVAKIA 3 BAHRAIN 13 HONDURAS 24MAURITIUS 35 SLOVENIA 4 BARBADOS 14 HUNGARY 25 MONTENEGRO 36 SOUTH AFRICA 5 BRAZIL 15 INDIA 26MOROCCO 37 THAILAND 6 BULGARIA 16 INDONESIA 27NIGERIA 38 TUNISIA 7 CHINA 17 ISRAEL 28OMAN 39 TURKEY 18 KENYA 29PAKISTAN 40 UGANDA 8 CHINESE TAIPEI 19 KOREA 30PANAMA 41 VENEZUELA 9 COLOMBIA 20 LITHUANIA 31PERU 42 VIETNAM 10 COSTA RICA 21 MACEDONIA 32POLAND 42. Methodology and processing of data The conclusions presented in this report are based on the completed questionnaires returned by EMC members. Occasionally, other public information referring to the countries concerned has been used for the purposes of comparison. In some cases where the information supplied appeared to contain inconsistencies or mistakes that could lead to inaccurate conclusions, either such information has not been considered or its apparent flaws have been highlighted. No quality check was carried out with the respondents, so there is the possibility that at times jurisdictions have used differing interpretations of the concepts involved. Although completed questionnaires were received from over half the EMC membership, this does not necessarily entail that the conclusions are 100% representative for the group as a whole. Also, when broken down into segments the number of respondents within each segment was relatively small, which means that the conclusions may not always be considered statistically robust. This is especially true in the case of questions that were not answered by all of the participants. However, it is our view that the conclusions presented here can be considered valid as indicators of trends and characteristics of the participant jurisdictions. The conclusions can also be consi