The importance of Local Market instrument trading in the Emerging Markets debt industry has grown tremendously since 1994, when Local Markets composed only 19% of total Emerging Markets volumes. Investor interest in Local Markets assets (as measured by trading volumes) accelerated in the mid-1990’s to US$1.27 trillion out of a total US$5.30 trillion (24%) in Emerging Market debt trading volume in 1996, reflecting optimism about economic reforms and new market openness, and the prospect of exceptional Local Market returns.
In response to the increased appetite for Local Markets instruments identified in the mid-1990’s, EMTA implemented a comprehensive Local Markets Project to clarify and develop local regulations and practices, and to promote netting legislation and securities law reform in selected jurisdictions of interest to our Members, including Argentina, Brazil, Mexico, Poland and Russia. Many of EMTA’s Local Markets activities were scaled back in the wake of the Asian and Russian financial crises of the late 1990’s.
By 2010, the share of Local Markets trading as a percentage of overall trading activity by EMTA Members had increased to 69% (US$1.076 trillion out of US$1.551 trillion in 2Q 2010).
Given EMTA’s limited resources, and the inherent difficulties of being effective in multiple Local Market financial centers, EMTA’s Local Markets activities are limited primarily to involvement in the Global Documentation Steering Committee to standardize cross-default and insolvency clauses for international financial product documentation, and participation in the international Working Group sponsored by the Hague Conference on Private International Law to establish an international conflict of laws convention to determine which law is applicable to pledges and other transfers of interests in securities, which are held in indirect holding systems.
Summary of UNIDROIT Convention on Substantive Rules for Intermediated Securities
Securities Lending in Argentina - Regulatory Issues Chart (4/97)
Legal Memorandum prepared by EMTA’s Argentine Counsel on Cross-Border and Local Derivatives and FX Transactions (3/24/97)
Legal Memorandum prepared by EMTA’s Argentine Counsel on Cross-Border and Local Securities Financing Transactions (4/11/96)
Legal Memorandum prepared by EMTA’s Brazilian Counsel on Cross-Border and Local Securities Financing Transactions (12/4/96)
Legal Memorandum prepared by EMTA’s Brazilian Counsel on Cross-Border and Local Derivatives and FX Transactions (7/31/96)
Legal Memorandum prepared by EMTA’s Mexican Counsel on Cross-Border and Local Derivatives and FX Transactions (5/1/97)
Legal Memorandum prepared by EMTA’s Mexican Counsel on Cross-Border and Local Securities Financing Transactions (10/96)
EMTA Clarification Statement No. 3: "Trading Polish Treasury Bonds and Treasury Bond Settlement Issues" (6/2/97)
EMTA Clarification Statement No. 2: "Custodian/Brokerage Relationships and Mirror Brokerage Accounts" (4/97)
EMTA Clarification Statement No. 1: "Letters of Authority/Powers of Attorney and Lack of Recognition of Nominee Accounts" (12/96)
Comment Letter on the draft New Act on Public Trade in Securities prepared by EMTA and EMTA’s Polish Counsel, and filed with the Polish Securities Commission (9/12/96, English and Polish)
Memorandum drafted by EMTA’s Polish Counsel, providing an overview of the draft new Act on Public Trade in Securities expected to replace the current Act on Trading in Securities and on Trust Funds of 1991 (8/9/96)
Principles for Successful Trading Markets (11/16/01)
Information on Yugoslav DM-denominated Old Foreign Currency Savings Bonds (10/29/01)