Peru - Securities market

- - rC-41 This report may not be published nor may it be quoted as representing the view of the Bank and its affiliatecl organizations. They do not accept responsibility for ts accuracy or completeness. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT PERU SECURITIES MARKET by Pierre Moxhet Consultant Subdirector Credito Bursatil S.A. Mexico, D. F. September 18, 1964   TABLE OF CT `-'ENTS Page No, PART I _ rNTRODUCTION A. Terms of Reference 1 B. Plan. of the Report 2 Cr Persons Consulted 2 PA RT II - THE CURM1J'T SITUATIONT AND NAJOR CONCLUSIONS AND RECOCrIE DATIOM7S A. Restrictions on the Demand for Securities 5 B. Volume of Transactions and Role of Bolsa -5 C. Major Conclusions and Reconmendations 7 PiRT III _ DRAFT LJU FOR IHE REGULLTION7 OF THE SECURITIES 1'4ARET A. Introduction 3 B. Major SuggestiDns 3 C. Specific Proposals for Revisions in Draft LegislatLon 1c) PART IV - ORGA2TIZAT:TOIN, OPERITI5OP APT FT..iITCING OF BOLSA APP ASSMCOIATIC OF SECTuII'IES BROKERS A. Present Arrangements 14 B. Proposal for New Organization of the Bolsa and its Financing 15 C. Projected Budget of the Colegio de Agentes de Cambio y Bolsa 18 PART V - RECOjETTDfAT-70S RE. FURTHER ACTIC3tS A. Possible Additional Listings in Bolsa 20 B. Suggestions Regarding Other !,cticri*- 22 iAFPETIIY A - CURRIGIT CAPIT\l STiRUCTUPE OF BOLSA DE CCMERCIO 24 APPE1TDIX B - STATISTICAL TABLES 27  PART I - DTiTRODUCTICIK A. Terms of Reference Dr. Javier Sa].azar, the Peruvian Finance Minister, in a letter dated Oc-tober 29, 1963 requested IBRD assistance for a study of the Capital MJarket. The Bank and the Goverrment of Peru subse- quently agreed upon the terms of reference for the initial phase of such a study, which was to provide an adviser to: 1) Review draft legislation, pending in Congress to establish a National Securities CoTmaission, to reorganize the securi- ties Exchange and to estab'lish certain tax exemptions in order to increase the volume of transactions on the securi- ties Exchange. 2) Review the present organization, the operation and financ- ing of the Exchange and of the Association of Securities Brokers. 3) Advise on a new organization, procedures and staff needed to implement the planned reorganization of the Exchange, and define functions and job descriptions and develop a financial plan to effect the reorganization planned. 4) Advise what further action needs to be taken -- b,y the Government, the Peruvian financial community or- the Bank -- to provide further assistance and develop a studies pro- gram in the folloTwing fields: (a) Economic - savings amounts and flows and transactions potential of Securities Exchange. (b) Administrative - sales and publicity techniques. (c) Leal - reviSion of 3ozmiercial Code. I -.as subsequently requested to nake the first phase cf the study and visited Lima during June 2-20, 196L. In this work I was assisted by 1Ir. Paul Craig-Martin, the Bank's Resident Representative in Peru and greatly appreciate h-iis helpfulness. My conclusicns and recor,.m.endations, presented belowT, are necessarily tentative, since they are based mainly on a brief visit to Peru.  B. Plan of the Report In line with the terms of reference listed above, th-s report is concentrated on specific action measures to strengthen the current securities market and strengthen the current stoc1Z exchange sVster, rather than a broad survey of the capital market in Peru. i.ccording- ly, no attempt is made to present an analysis of present and pros- ipective levels of savirgs or of ,olicy mreasures to increase the flow oI saviugs and channel thet toward priority investment. As a back- ground, however, a brief description of restrictions on the demand for and supply of securities is -resented in Part II. Subsequently the resl-ts of a review of draft legislation are presented us Part ITI and of a review of the organisation and oneration or the Bolsa de Comercio de Lima in Part IV. In addition, recoti7oendations for further actions alre Dresented in Part V. C. Persons Consulted 'IIame Company or Occupatioon Dr. Javier Salazar Vl<lanueva Iinister of Finance Sr. Felipe Marrou Ccorrea President - Balsa de Comercio de Lima Dr. Enricue Vidal C.rdenas Vice President - Bolsa de Comercio de Lima Dr. Guillermo Gubbirs F. Legal Adviser - Bolsa de Comercio de Lima Sr. Pedro Guzman Gormero Manager - Bolsa de Comercio de Lima Dr. "nrique Bellido President - Banco Central de Reserva Dr. Jose >Iorales General I'lanager - Danco Central de C Reserva Dr. Emilio Barrelto Econcmic Adviser - Banco Central de Reserva Ing. Ismael Benavides President - Banco Fomentc Agropecuario ing0 Raron Remolina. Manager - Banco Fonnento Agropecuario Dr. Arturno Seminario Garcia President - Banco Central Hipotecario Sr. Carlos Angosto Conti I'lanager - Banco Central Hipotecario  - 3,. cont d. Ing. Tulio de Andrea General Manager - Banco Industrial Dre Percy Buzaglo Terry President - Caja de Depositos y Consig. Sr. Raul Arrieta Managing Director - Caja de Depositos y Consig. Sr. Federico Ruiz Diidobro Superintendent - Superintendencia de Bancos Mr. John M,11urphy Manager - The First National City Bank Dr. Guglio Restive TManager - Banco de Credito Dr, Alberto Righi Grl. - Banco de Credito Dr. Gianfranco Barde]la Asst. MTgr - Banco de Credito Sr. Norberto Brande Asst. Mgr. - Banco de Credito Dr. M,Xariano Prado President - Banco Popular del Peru Sr. Martin H. Lowe Manager - Banco Continental Sr. C,R. Tannel M4anager - Banco de Londres y America del Sud Sr. Mario Hazzoleni Director - Financiera Peruana S.A, Sr. Giulio Cannesa Manager - Financiera Peruana S.A. Dr, Claude Ward Manager - Del Peru Financiera y Comercial S.A. Dr. Carlos Mariotti Gr. Mgrd. - Lima Light and Power Co, Sr. Ernst Keller 14gr. Director - Peruano - Suizo de Fomento e Inversiones Sr. Ken Levene Legal Advisor - Peruano - Suizo de Fcnento e Inversiones Ing. Antonio Tarnawiecki Mgro Director Consultores e Ingenieros Asociados S.A. Dr. Roberto Ranirez del Villar President - Comision de Hacienda Publica "tAll Camara de Diputados Dr. Alayza Grundy Latwyer - Cerro de Pasco Corp.  M 4 - contt, Ing* Jaime Rizo Patron l4gr, Director - Cemento 5ndino S0A, Ar Ing, '.1fonso Montero Muelle President - Corp. del Mantaro Ing. Alfonso Rizo Patron Engineer - Cia. Minera Chanchami Dr. Hernando de Lavalle Go Lawyer  P." DT IT - 7T_C;UI??1T TT TFATCIC jiT, PIJ OR CONCLTJS IONS AND RECOlAENDATIONS A. Restrictions on the Demand for Securities The mission did not attempt to gauge the latent demand for securities but noted that there wiere many factors restricting effec- tive demand. The investing public is small in numbers and the practice of investing in securities is little known or understood* Only Cedulas, mortgage bonds having the general guarantee of the issuing company and the specific guarantee of a determined piece of real estEte, cormmonly favored by Latin American investors and the securities of Lima Light and Power Co, (Empresas Electricas Asociadas) enjoy a reasonably wide and active market0 In view of the constent fear of inflation, small and medium savings tend to be invested in real estate or durables. Nevertheless, savings accounts in banks total about S/ 4,000 million at present and are increasing by- S/ 1 million a day. It w,ould be unrealistic to estimate that more than 5% of the total would, over the years, be irvested on the market after its reorganization, In the absence of an active securities market and, therefore, liquidity of securities, investors are restricted to those wwho buy for long term holdina0 The vast hulk of new capital financing is obtained from banks and other institutions and only very little from individuals; ho wever, one finance company reports appreciaole success in "door to door" selling of new issues such as the one of Lima Light and Power Co. Although licuidity is probably the most important factor for the small investor, the absolute lack of protection of minority shareholders also restricts the demand for securities. Shareholders controlling 5l% of the stock of a company can elect the entire board, narme themselves to well paid positions, arrange special sales and purchases, etc, Interest rates are higho A stamp tax of 3.6% on bills of ex- change, drafts, promissory notes, etc, is a contributing factoro The effective rates of commercial banks are over 17%, of finaace companies 23% to 25% and for retail time sales 30%. Even though the Banco Industrial del Peru, for instance, pays a guaranteed 10lO dividend, free of all taxes, and paid 12% in 1963, there is little demand for these shares.  - 6 - Tax anr' other regrilations f.tvor in-vestr-.ert .n i,al estate. For instance, Insurance Conmpanies have to deposit a bond of orily S/ 5 million either in real estate property titles or Cedulas of the Banco Central Hipotecario del Peru. They may invest the rest of their reserves in securities but they prefer real estate. B0 Volume of Transactions and Role of Bolsa No overall estimate of the potential securities market was available locally. Nevertheless, the mission in the course of its enquiries did reach some rough conclusions. The present volume of transactions on the .9olsa of about S/ 32 million, or US$ 1.2 million, a year is totally inadequate to form an active market0 However, if there had existed an abDsolute obligation to conduct all transactions in listed securities tirough the Bolsa, the volume would have been much greater. The general consensus of estimates indicates that the total transactions -Df securities listed on the Bolsa was around S/ 200 nillion, including both those actually made through the Bolsa and the much larger por- tion made outside the Bolsa, Transactions in presently unlisted securities are variously estimated but, in general, the mission considers that the volume may be put at around S/ 500 million. If all transactions of both listed and presently unlisted securities had been clhanneled through the Bolsa, a total volume of S/ 700 million might have been expected, A widespread distrust exists amongst the banks, financial cormpanies and other organizations trading in securities regarding the operative abilities and the ethics of the members of the Colegio de Agentes de Cambic y Bolsa, that is to say, of the individuals admitted to act as intermediaries on the Bolsa de Comercio. A similar lack of confidence exists on the part of the Agentes de Cambio y Bolsa, in the Banks and other institutions trading in securities, wThich they accuse of wilfully side-tracking the Bolsa in the pursuit of theeir on selfish interests, As a result both parties concerned ha,ve adopted the practice of not registering their securities operations on the Bolsa whenever they have thbe possibility not to do so, Theyr much prefer doing their trading outside the official. market on an "over the counter?? basis, thus making a larger than rnormal profit, through differences between the buying and selling prices, than they would obtain by trading officially on the Bolsa and charging the official commission rates,  7 - C. Ma,or Conclusions and Recommendations The volume of securities available and in sight is sufficient for the establishment of a securities market. If the securities market is to be amplified and become active, banks and finance companies must be admitted to trading on the Bolsa through their own representatives. As a corollary, all transactions of listed stock should be made on the Bolsa as proposed in the draft legislation at present under study by the Congressional Committee (see Part III), Given an adequate volume of securities, an active markiet could be developed primarily by investors from abroad and by the foreign resident community. The Peruvian investor can be expected to be in the minority for some years while the necessary knouledge and confidence are acquired regarding investments in securities. To provide guarantees for investors and protection of minorities, the proposed Comision Nacional de Valores should be given stronger regulatory and supervisory powers. The Bolsa should be provided with a larger staff and better accommodation, Adequate professional qualifications and financial status should be established for Agentes de Camnbio y Bolsa. G-iven the implementation of our recommendations, a highly qualified individual should be appointed as full time Genera. Manager of the new Comisiornc He and the Manager (Gerente) of the Bo-sa should have an oppor;unity to study the operation of Mexican agencies in the secu-rities field. Arrangements should also be worked out for the provision of Peru of foreign technical assistance to help in the establishment of the Comision Nacional de Valores and the Registro de Valores, as well as in the reorganization of the Bolsa.  -8- 1ART III - DrAFT LAr' FOR THE REGULATION OF THE SECURITIES MARKET A. Introduction A draft Decree-Law for the regulation of the Securities Market was presented to the Military Junta in 1962. This was submitted to a Technical Comunission, which reported on it in May, 1963. A revised draft law was submitted to Congress by the Minister of Finance in October, 1963, and is at present under consideration in a congressional cormittee. The current draft legislation is designed to establish a Coriision Nacional de 'Valores, to reorganize the Bolsa de Comercio and to establish conditions needed to increase the volume of transactions of the Bolsa de Comercio de Lima. The legislation is expected to be reported out by the Committee in August or September, 1964. B. Major Suggestions In view of the current situation, summarized earlier, we have come to the conclusion that the two most urgent steps to be taken to strengthen the securities market are to: 1) have all transactions in nresently listed securities made officially on the Bolsa, as proposed in the draft legis- lation which has been submitted to the Congress, and 2) have representatives of banks and financial institutions admitted to trading on the Balsa. It would be impossible to rejuvenate the market without the active collaboration Df the Banks and other Financial Institutions, which up to now have carried out a good 70% of the transactions on listed securities and practically all of the offerings of new securities, either of already esstablished companies or of new companies. It is an established fact that all recent issues of new securities hav3 been made through the joint efforts of the Financieras and the Banks and their accession to ther Bolsa ought to amplify considerably its total potential volume of trading. Because of the important role fulfilled by these institutions a ruling, even in the form of a law, making all trading mandatory throDugh the Bolsa would not work if the Bankcs and similar institutions were not admitted as members. Their coo aeration is essential for thes development of an effective securities market. This is why a way must be established to have representatives of the Banks and Financial institutions admitted to trading on the BDlsa and, simultaneously, to have all transactions of securities listed on the Bolsa be executed on the Bolsa as proposed in Article 14 of the  - 9 - draft-law. This obligation is indispensable, althou-gh it does imply a monopoly and wve are of the opinion that great care should be taken than no amendment be added which would dilute in any way this obligation. The only exceptions which appear desirable are those suggested below for revision of the draft-law concerning Special Offerings, Under- writings and Secondary Offerings. To help in assuring that the security transactions of the banks and financial institutions are in fact transacted officially through the Bolsa de Comercic, as stipulated in the draft law, the Government should make sure that the Comision Nacional de Valores obtairs the full collaboration of the Superintendencia de Bancos whenever the latter's aid might prove helpful. Although this office has ample power and authority of inspection and surveyance of financial institutions, it appears to us that enforcement has not been fully effective. It seems to confine its activities to a statistical function and does not make effective use of its authority. The main changes which we are suggesting in the draft-law, in addition to providing for the admittance of representatives cf banks and other financial institutions to the Colegio de Agentes de Cambio y Bolsa as full active members, are provisions for: 1) Shifting various regulatory and slupervisory powers from the Bolsa's jurisdiction to that of the Comision Nacional de Valores so that the Bolsa can concentrate on its main goal of providing adequate trading facilities and regulating them. 2) Giving to the Comision Macional de Valores powers to protect securities holders and purchasers of new issues. 3) Creating a Registro Nacional de Valores to insure availa- bility to the general public and to the Comision Nacional de Valores itself of reliable data concerning all the companies listed on the Bolsa or who apply for public issuance of securities. 4) The appointment, fron amongst the members of the Comision de Valores, of a general manager who must be a full-time officer wvith an adequate salary. It is essential that his continuity in office is not affected by political changes.  - 10 - C. Specific Proposals for Revisions in Draft Legislation The following 3suggestions are offered regarding various revisions which might be made in the various articles of the cdraft legislation both to carry out the changes outlined above and Other- wise strengthen the organization and operation of the securities market: Article 1 - Wie think that the cost of operation of the Comision Nacional de Valores should not be covered by the Bolsa de Comercio, but by an annual assessment of one per ten thousand on the nominal value of the amount of securities listed on the Bolsa. At present this assessment would produce an amount of only S/487,980, which could be brought immediately to a total of s/66o,ooo, if the government consented to list on the Stock Exchange all the bonds of its internal and foreign debt, which at present are not listed. Further reference to this matter will be found in Part IV. The amount of' s/660,Coo will not be sufficient to cover the Comision's expenses at, its inception, but the proceeds of the assess- ment ought to increase rapidly as new issues are presented to the public for sale and/or for Listing on the Bolsa. We believe ,here- fore that 2 or 3 years after the Comision becomes operational the proceeds on the assessment could easily reach the S/2,000,000 mark and cover all expen'ses. In the meanwhiLe it is suggested that the Government arranges to finance any provisional deficit. Artlcle 2 - We agree that all operations should be centralized on the Bolsa, but specia:L provision should be made, whether in the law itself or in its Reglamento, to exempt new issues of securities not yet listed on the Bolsa offered to the public through special offer- ings or underwritings and also for Secondary Offerings of blocks of securities already listed. Article 3 - We agree to the gist of the text, but are of the opinion that the Comision shouild be composed of an even number of represent- atives of the Public Sector and of the Private Sector, thus forming a total of either 8 or I0 members. 'Je suggest, furthermore, that the President be chosen from among the Public Sector members and have a casting vote in case of a tie. We urge, furthermore, that the legislation provide tha, the President should havre adequate technical background and experience and that he should dedicate all his time to affairs of the Comision as a full time appointee., Article 4 - No conanent.  - 11 - Article 5 - We sug4gest thati the text of the first paragraph of this article be changed to read: "the statutes and by-laws of the Bolsas, the regulations for the inscription and quotation of securities, the various tariffs, commissions and fees applicable, and the regulations concerning trading on the Bolsa, be subrnitted to the Comision Nacional de Valores for their examination and approval as warranted. Later paragraphs of Article 5 would be substituted by the following: Article 5-A - The Comision Nacional de Valores will establish and maintain a National Register of Securities, in duplicate, in which the corporate history of all the companies listed in the Bolsa will be entered, together with the principal characteristics of the s-ecurities issued by them and any modifications which might occur subseqaently. In this Register will also be entered all pertinent informatiDn on all new issues presented to the public and all other pertinent facts necessary for an adequate appraisal of the financial status of a company. Note: The obligation to establish and maintain a Registro Na3ional de Valores shouLd also be mentioned in Article 1. Article 5-B - The Comision Nacional de Valores will establish and enforce the rules and regulations -ith which entities and coroorations must conform for the issuance of their securities to the public and also for listing of securities on the Bolsas. The main objective of these rules and regulatioris will be to ensure the protection of the investing public.A&cquate guarantee should be provided as follows: 1) The Balanice Sheets and the Accounts which entities and corporations are to present to the Comision Nacional de Valores for their inscription in the Registro Nacional de Valores and for the issue to the public of new seciarities should be certified by a Public Accountant, or by an office of Public Aiccountants, acting as independent Auditors, in harmony with the regulations that for this effect should be dictated by the Comision de Valores. 2) Require that Corporations applying for sale of their securities to the puolic should modify, when necessary, their Charter and By-Laws to the full satisfaction of the Comision. 3) The establ'ishment of a standard requirement that each share- holder or group of shareholders representing 20% of the issued stock has a rigDlht to elect one member of the Board of Directors. 4) Stockholders should be required to elect 2 overseers (ComisarioS in MIexico, Sindicos in Argentina, or Commissaires in France)),, one for the majority and one for the minority.  - 12 - 5) Provide protection to minority shareholders, by re-uiring that directors obtain shareholders' approval befora they mortgage or sell a company's assets. 6) A procedure by which a minority shareholder can ap?eal through the courts against decisions of the majority that are clearl:7 dama'-ing to his interests or to the co-mpany. This right does not exist at present and ought to be specified irn the Reglamento as it is no-t mentioned in the Codigo de vomercio. Article 7 - The procedures to be followed for securities is3ued by Central and Local GIoviernments (Gobierno Central y Gobiernos LDcales) should be the same as in Article 6. Article 8 - This .rticle should be replaced by Article 5-B. Article 9 - Should be modified to read: 111o public offering whatso- ever of securities wzill be allowed, either of national or foreign origin, or of new issues, unless they have been approved by the Comision Kacional de Valores, and have manifested their intention to apply for listing on -the Bolsa de Comiercio (see also Article 2). The bonds and Dther obligations issued by the Centra.l and Local Governrents are also to be considered as a public offerLng for the effects of this lawi, these issues mcreover will have to be presented to the Comision Naciorial de Valores for entry in the Registro Nacional de Valores. Mandatory sales by judicial order are exempt from the provisions of this ar-ticle. It is purposely that the phrase t'.. y la colocacion...." has been left out. Article 10 - No change, except that we consider thatCommercLal Banks should be included in this interdiction even though existing legisla- tion may do so. Article 11 - No change. Article 12 - Insert >-etween paragraphs 1 and 2 the following para- graph: "One half of the membership of each Colegio de Agentes de Cambio y Bolsa shall bze reserved to officers or employees of the Ban1:G. Financieras and other F.>nancial Institutions. The Colegio de Agentes de Cambio y Bolsa shall submit for the aorproval of the Comision de Valores proposed professiornal qualifications and the f.inan- cial status that shal:l be required of its members". Article 13 - There is an error that needs to be corrected as follows: instead of "esta facultado para endosar los titulos..." substitute "esta facultado oara certificar las firmas de endoso de los titulos...". Also we suggest that the procedure for transferrirng registered securi- ties be simplified by eliminatiLng the requirement that the pu:'chasers have  - 13 - to sign. t*te also s':1r;est that the requirement that one or two Directors of a cormpany have too sign the register book be eliminated and that a system of "Registrar" or "Transfer Agent" be instituted. Article 14 - The following should be added in accordance with Article 2: "New issues of securities not yet listed on the Bolsa offered to the public through 4pecial Offering or Underwritings, and also Secondary Offerings" of blocks of securities already listed. Article 15 - No change. Article 16 - No change. Article 17 - No change. Article 18 - No change. Article 19 - No change. Article 20 - The following should be added: "This disposition shall apply to dividends of registered shares of new issues sold through Special Offerings or Underwritings and also through Secondary Offerings of securities already listed and purchased by individuals. In the case of the shares of new issues the provision applies as of the eate of listing on the Bolsa de Comercio. Article 21 - Same observation as for Article 20. Article 22 - No change. Article 23 - No change.  - 14 - PART IV - ORGANIrZATIZTI OPERLATION AND -,.4 X- v 'y5r .fS ij:-) A2ES OCIATTQI< 1?;OL 3L UBJ;TI :s L~; TC)s ;I A. Present Arrangements Bolsa The authorized capital of the Bolsa is S/2 million. Present issued capital is S/5CO,0000 -Receipts of the Bolsa in 1963, nainly listing fees, amounted to S/1,322,000 and expenditures to S/1,188,000, thus leaving a profit of S/133,000. A dividend of 10% has been paid on 500 shares of S/l,,OOO n,v, each year since 1959. There are two classes of issued shares, the common reserved to the brokers (members of the Colegio de Agentes de Cambio y Bolsa) and the members' shares reserved to individuals or entities who are not brokers. The Board of the Bolsa is com-posed of 8 persons. Recenit nomi- nations to the Board, Antonio Tarnawiecki (Sept. 1963) and Alfonso Montero and Carlos iMariotti (MIarch 1964), all are well known and re- spected in Peruvian business circles, have gre3tly strengthened it. The new members accepted nomination only on the understanding -hat necessary steps, however drastic, would be taken to create an effective stock exchange. The staff is composed of a manager, secretary and four assistants. The manager, Pedro Guzman, is young and able. The Bolsa de Comercio de Lima (Stock Exchange) is housed in cramped quarters in a small second floor section of the building it occupied 30 years ago. it has one external telephone lines Daily bulletins are issued. A monthly magazine "Actua-idad Economica" is published and is of high standard. Securities listed as of May, 1964, amounted to: (In millions) Bonds (Govrt. and Corpn.) Local Currency .. S/ 833.5 Foreign O. 549.L (a) Stocks Local " se 23485.9 Foreign l,00910 (a) Total S/ 4.877.8 (a) One U.S. dollar = S/ 27.00.  - 15 - Pr-aing occur3 b&_t-e--n 12 noon and 12:26 p.:. ( Tondany through Friday). Transactions on the Bolsa in 1963 totalled S/ 31.6 million. ivore than 34% of all transactions on the exchange were of stocks of Lima Light and Power Co. and Hidrandina. As concerns the quotations which are posted sporadically during the 15 minute daily Bolsa session, the general concensus is that only the ones on half dozen securities, notably on Cedulas Hipotecarias and various issues of Enpresas Electricas have any real value. Colegio de Agentes de Cambio y Bolsa The Colegio de Agentes de Cambio y Bolsa (Stockbrokers Association) may have under present regulations 30 members, with the sole right of trading on the Bolsa. The Colegio is managed by a Coimmittee of 7 of its members. At present there are 12 Agentes, of which only 6 to 8 attend sporadically the daily sessions of the Bolsa. Only two, who have small finance companies, can be considered active, the others doing an in- significant "door to door" business without any office. No special professional qualifications nor financial standing are required of the Agentes. The income of the Colegio amounted to S/ 3,000 in 1963, coming from annual dues paid by the 12 Agentes. In addition, the Colegio re- ceives S/ 120,000 annually from the Bolsa for distribution among members in proportion to the:ir attendance at sessions of the Balsa. B. :Proposal for New Organization of the Bolsa and its Financing Prospective volume of Balsa activity As mentioned e:Lsewhere, we have come to the conclusion that, if in 1963 all transactions on listed securities had been made through the Bolsa, the total vw0ume of trading would have reached an amount of between S/ 180 million and S/ 200 million, instead of the actual figure for that year of S/ 31,160,456. Therefore, we have established for 1