The Stock Exchange Law: Analysis of its Possible Consequences over Colombian Corporations

Abstract

Law 964 of 2005 modifies the existent regulation on the management and investment of resources associated with the Colombian stock exchange. This paper makes notice on some possible effects derived from this law that might affect corporations in Colombia. Several previous reforms of the market are studied, preceded by a description of the configuration of property among Colombian corporations on the basis of recent methodological approaches (including La Porta, López-de-Silanes, Shleifer, and Vishny's research agenda). We conclude that given the particularities of the Colombian market, the new Stock Exchange Law may favor the growth of foreign investment funds with a Colombian portfolio, but it could also alter the incentive schemes by which corporations operate in Colombia.

Note: The downloadable document is in Spanish.

Keywords: Corporate Finance and Governance, Regulation, Stock Exchange, Colombia

JEL Classification: G38