On May 28 the Colombian Ministry of Finance and Public Credit and the World Bank signed a cooperation agreement to work in the coming months on the launch of an Issuer-Developed Exchange Traded Fund (ID-ETF). The alliance aims to promote innovation, efficiency and diversification in the development of bonds for both the National Government and private institutions, seeking to reduce transaction costs and risks for both issuers and other market players.
The objective of the initiative is to support the development of local bond markets, promote financial stability in emerging economies and democratize access to capital markets through financial services. The introduction of this exchange-traded fund seeks to increase the liquidity and transparency of securities at a lower cost.
César Arias, Director of Public Credit and National Treasury, said that “in the case of Colombia, the underlying asset of the sovereign wealth fund will be a basket of TES bonds in local currency, which represents the most liquid security in the country, with a diversified base of local and foreign investors and a solid market maker program.”