What changed in your business over the last year and what was your biggest achievement?
In the past year, various factors such as market volatility and the influx of unregulated services and products have prompted us to reconsider the need to create greater value for our stakeholders. Committed to maintaining our core services and the purpose of developing our capital market, we are also seeking to increase and diversify our portfolio of products and services. Recognising the importance of staying at the forefront of technology, we have made significant investments in cutting-edge technology and resources to support these changes.
In 2023, we undertook several key projects. We initiated the upgrade of our trading system, Nasdaq ME, with the goal of aligning with market best practices and enhancing services for our members. We also selected and kicked off the implementation of Percival’s Depend & Hubble as Latinclear’s new CSD software. Additionally, we migrated our services and systems to the cloud, and we are on the verge of launching our new websites to streamline the user experience, providing agility in accessing market information and facilitating the efficient collection and distribution of data.
A significant achievement was obtaining the latest ISO27001:2022 certification in information security management systems for Latinex. This certification covers risk management, cyber resilience and operational excellence, highlighting our commitment to security and quality in all aspects of our operations.
What is your most important project this year (regulatory or otherwise)?
Our vision is to establish ourselves as the hub for the capital markets in the region, and we have actively worked on various initiatives to bring this vision together. Consequently, we have embarked on two fundamental projects.
The first project involves the implementation of the initial phase of iLink with Euroclear Bank, available since April 2014. This initial phase facilitates the availability of local debt from the Republic of Panama and quasi-governmental entities to international investors, with over $6 billion being 'Euroclearable.' We anticipate a substantial increase with the second phase of iLink, which we aim to have available this year. This will allow international investors to access corporate debt listed on Latinex, making it 'Euroclearable.'
Our second project focuses on providing listing services in the secondary market for international issuances (144A/RegS). The U.S. Securities and Exchange Commission recognises Latinex as a "Designated Offshore Securities Market", positioning us as an alternative for issuers in Latin America and the Caribbean. We offer conditions equivalent to other jurisdictions that also provide these services, leveraging the advantage of sharing the same time zone, language, a cutting-edge trading system (Nasdaq ME), and the U.S. dollar as our currency.
These strategic projects consolidate Latinex's position as a key player in the international financial landscape, unlocking new perspectives for issuers and investors in the region.
What are you most excited for in 2024?
We have integrated sustainability into our strategy, as well as into our products and services, working within the exchange towards our stakeholders. As members of the SSE and CBI, and signatories of TCFD, among others, we promote these standards in the issuance of labelled securities, providing tangible benefits, and emphasising the disclosure of ESG information from listed companies. Furthermore, we have committed to net zero by 2050 and, during COP28, endorsed the ISSB´s standards on General Requirements for Disclosures of Sustainability-related Financial Information and Climate-Related Disclosures.
As of 2023, we have $700 million in labelled securities, ranging from green bonds and commercial paper to sustainable bonds and sustainable investment funds. We are currently in the process of listing the first blue bond and social bonds with Latinex. We will be launching updated guidance for the issuance of labelled securities along with the Climate Bonds Initiative and for the ESG Reporting guidance to include the new ISSB’s standards. Additionally, we are working with the Environmental Ministry of Panama to launch Panama’s Voluntary Carbon Market.
What are your biggest opportunities?
Panama stands out as one of the leading economies on the rise in Latin America and the Caribbean. With a dollarised economy, an important financial center, an investment-grade rating, and its role as a hub for various services, the country is a key player in the region.
The Panamanian capital market is not trailing behind; we have diligently worked to elevate our standards to international levels and adopt best practices. We've embedded sustainability within our operations and made significant investments in cutting-edge technology, cybersecurity, information security and digital transformation.
Currently, we have more than 260 listed companies, with 8% being international, spanning a diversity of sectors and industries. Our initiatives aim to facilitate connections between issuers listed in Latinex and a broad group of Panamanian investors, as well as those in integrated markets in Central America. The implementation of Phase II of iLink creates opportunities for international investors to participate in both corporate debt and local government debt, building on the foundation established in Phase I.
With the successful conclusion of our "Listing" project, our goal is to position our market as an integral service offering. From Panama, we aspire to cater to issuers and investors from across the region and beyond. This strategic approach will allow Latinex to consolidate as a platform connecting key players, further strengthening our position in the regional and international financial landscape.
What do you see as the key themes and trends for your exchange and market infrastructure in 2024?
Technology will remain a top priority for us. The launch of the projects we have been working on will facilitate the incorporation of new products and services, such as data providers, among others. We continue to focus on incorporating new lines of business and products that will facilitate the participation of small and medium-sized enterprises in the capital market, along with initiatives that contribute to its overall development.
Our commitment to mobilizing resources for sustainable development will also be a top priority. We aim to attract issuers who see Panama as a platform for placing their issuances in the region and soon, with international access. Additionally, we are exploring the possibility of establishing Panama’s voluntary carbon market.
The views, thoughts and opinions contained in this Focus article belong solely to the author and do not necessarily reflect the WFE’s policy position on the issue, or the WFE’s views or opinions.