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SIA URGES MEXICAN SECURITIES MARKETS BE OPENED TO U.S. BROKER-DEALERS

SIA URGES MEXICAN SECURITIES MARKETS BE OPENED TO U.S. BROKER-DEALERS
 NEW YORK, March 5 /PRNewswire/ -- Mexican securities markets should be opened to direct participation by United States and Canadian brokerage firms to ensure the free flow of capital between Mexico and its neighbors, Edward I. O'Brien, president of the U.S.-based Securities Industry Association, said today.
 "SIA believes the North American Free Trade Agreement (NAFTA) negotiations on financial services, and specifically those related to U.S. broker-dealers, are a critical element of the proposed pact," O'Brien said.
 SIA cited nine principles to successfully achieve the objective.
 "Our recommendations seek to increase the flow of capital among all three countries, resulting in greater benefits to investors through enhanced investment opportunities, and to issuers via increased access to capital," he said.
 Negotiations seeking to reduce barriers to trade in financial services are part of NAFTA and are currently taking place. SIA has discussed the U.S. securities industry's view with U.S. government officials.
 Mexico's Barriers "Reduce Efficiency"
 "We seek, as a primary goal, immediate establishment of a U.S. broker-dealer presence in Mexico, and national treatment, including equal competitive opportunity," O'Brien said.
 "We realize there are legitimate concerns by the Mexican negotiators about their industry and we are willing to discuss those issues during the negotiations. But those concerns shouldn't be used to legitimize barriers which only stifle competition, reduce efficiency and innovation, and leave all parties worse off," he said.
 National treatment calls for foreign firms to be subject to the same rules and conditions as domestic firms.
 Without fair treatment, the potential for growth in Mexico's securities business by U.S. firms is artificially constrained, SIA said in an outline of the nine principles.
 Current rules limit foreign firm contact with Mexican customers, make access to information difficult, and make foreign activities expensive, among other problems, SIA said.
 Plan Urges Elimination of Barriers
 The plan urges: eliminating any discriminatory financial services barriers and bringing about further liberalization; mandating national treatment and equality of competitive opportunity; and, accommodating cross-border sale and purchase of financial services in primary and secondary markets.
 A primary market is the market for the sale of new securities with proceeds of the sale going to the issuer of the securities. A secondary market is one in which previously issued securities are bought and sold.
 In addition, SIA urged creation of a tri-lateral panel to review the phase-out of transitional arrangements; inclusion of existing or future services and products in any pact; and availability and disclosure of laws and rules of regulatory and government agencies.
 The plan also calls for provision for settlement of disputes; long- term harmonization of regulatory policies in the North American markets; and adequate provision for other hemispheric nations to become signatories to the agreement.
 U.S. Net Acquisitions of Mexican Stocks Topped $3 Billion
 As previously reported, U.S. investors alone made $3.3 billion net acquisitions of Mexican equities in the seven quarters through the third 1991 quarter, according to the latest available data, SIA said. In the entire previous decade, net acquisitions totaled only $224 million, SIA said. In addition, Mexican companies have raised $2.7 billion in 1991 through public and private offerings in the United States, SIA said.
 "The recent growth could be substantially altered if Mexico's market rules remain biased against foreign firms," O'Brien said.
 SIA is the securities industry's trade association, representing the business interests of more than 600 securities brokerage and investment banking firms in the United States and Canada. Collectively, the account for more than 90 percent of securities activity in North America.
 Among SIA's members are five U.S. broker-dealers with Mexico-based parent organizations. All have joined SIA within the last two years.
 -0- 3/5/92
 /CONTACT: Art Samansky or Karen San Antonio of Securities Industry Association, 212-608-1500/ CO: Securities Industry Association ST: New York IN: FIN SU:


CK-TS -- NY037 -- 5434 03/05/92 12:12 EST
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Publication:PR Newswire
Date:Mar 5, 1992
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