Strengthening Self-Regulatory Organizations’ Framework in Colombia

Project Development Objective (PDO)

The purpose of this project is to reinforce the systemic risk management and investor protection in the Colombian securities market by supporting a clear regulatory and institutional framework for self-regulatory organizations (SROs). The aim is to align this SRO framework with a more dynamic capital.


The recent growth of Colombia’s capital market, which included developing new products and intermediaries, has been followed by the modernization of its regulator (the Financial Superintendence of Colombia [SFC, Superintendencia Financiera de Colombia]). But changes in the SRO structure have lagged. 

The 2012 Financial Sector Assessment Program (FSAP) recommended deepening oversight of the securities market, particularly in light of the development of and increased use of new products and instruments. For example, current deficiencies in repurchase agreements in established margins for different types of maturities and instruments, as well as in related prudential regulations, require a stronger supervisory framework to contain excessive leverage and to minimize risks. According to the FSAP, the SRO framework needs to be strengthened and upgraded to align it with a more dynamic capital market, as well as with best practices followed in equivalent markets. Specifically, the International Organization of Securities Commissions assessment, carried out as part of the FSAP, recommended improvements to the governance structure and independence of SROs and to the inspection regime. 

Additionally, the intervention and liquidation of Interbolsa, the largest brokerage firm, in November 2012, opened up the discussion about the fact that the SRO framework should be reviewed to increase the capacity of SROs and the SFC to manage similar events.


The main activities of the proposed project are as follows:

1.  Assessment and policy recommendations and guidelines to improve the current institutional,
     regulatory, and supervisory framework of the Colombian securities markets, with special
     emphasis on the SRO framework and its capacity to manage serious market disruptions
     originated by shadow banking institutions 

2.  Delineation of responsibilities and harmonization of procedures—as appropriate—between the
     SFC and SROs (Autoregulador del Mercado de Valores [AMV], Colombian Stock Exchange [BVC],
     and Central Securities Depository [CSD]), including a review of current roles and
     responsibilities of the SFC and SROs in supervising (a) market activities, (b) participants,
     and (c) the approaches, tools, and procedures used by these institutions in carrying out their

3.  Guidelines to strengthen the corporate governance of SROs (AMV, BVC, CSD), thereby covering
     areas such as board composition and conflicts of interest

Expected Outcomes

The short-term outcome of this project is expected to be a more robust institutional, regulatory, and operations framework in the Colombian securities market. SFC and the SROs (AMV, BVC, and CSD) will more effectively (a) detect market misconduct with potential effects on systemic risk and investor protection and (b) enforce existing regulations and address corrective measures on a timely basis.