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NetEase, December 2 Tenth China Securities Investment Fund International Forum held in Shenzhen on December 2, the Association of Directors of the Brazilian financial and capital markets, HSBC Asset Management in Brazil CEO Pedro Bastos, to further strengthen investor education fund should be consistent with investor demand. []
, Pedro Bastos, to further strengthen investor education fund should be consistent with investor demand. Similarly, China is concerned, it is also very important.
Pedro Bastos said that in Brazil, 20% of the fund management companies can purchase international assets. However, the fund industry in Brazil faces an enormous challenge, because the industry is still concentrated in the short-term fixed income products. In the past 20 years, Brazil has long been the world’s highest real interest rates. He believed that this situation will change, and Brazil must cut interest rates to lower levels.
following speak, Pedro Bastos Record:
First of all, I congratulate to the Tenth China Securities Investment Fund International Forum, and today I represent the Brazilian financial industry associations, and very grateful to have such an opportunity so that we first came to China. Fly from Brazil to China to spend 36 hours time, but this way thousands of miles of distance and not separated our two countries apart.
I would like today to tell you about us and the Association of some of the goals is to expand the scope of the fund management company, it is very important. Brazil has recently done a decision, 20% of the fund management companies can purchase international assets, we now have to further strengthen investor education, as well as the appropriateness of the products to investors. Our cooperation with the local is very important, because our industry is very young. So China is concerned, it is also very important.
before specific description of our industry, I would like the development of Brazil. Because we also need to have such a framework, in order to better understand the challenges we are currently facing.
First of all, Brazil is a vast land of the continental countries, and China, we are the fifth largest country in the world, and we have 180 million inhabitants, we still enjoy a demographic dividend, because we are 16 years old – 60-year-old population, which means that the labor force is very large, and we are increasingly involved in international affairs, play a role in the international arena, we compare the early signing of the Kyoto Protocol.
very rapid development of our market, the actual size of the $ 1.3 trillion, and our sovereign rating to investment grade, and we are an important exporter of iron ore, beef, regardless of any an asset resources, we are important exporting countries. We may not know much about, is also a major exporter in the oil. By 2020, we will is the world’s largest democratic country of an oil-exporting. And we are an open society, we are very much welcome international investment. In fact, this is a very important point.
talk to us about our history. In fact, Brazil, before the two lost decades, from 1979 to 1999, in 20 years time, our economy grew by only 2%, and our high-speed growth is very different. From 1994 a series of institutional and institutional reforms, then really started to take off in the late 1990s. We have now is to benefit a lot of reform measures implemented in the 1990s. From the perspective of macro-economic environment, we have a modern financial system, you can achieve real-time transfer from one account, and from north to south, but also established a variety of clearing systems. In terms of infrastructure, now have the security.
There is also an important progress is to be implemented now, is to make Sao Paulo to become an international financial center for investment, and perhaps more of a regional investment center.
after 1999, our GDP began a very rapid growth, of course, keep up the speed of China. But our GDP per capita 1/3 higher than China. Taking into account the inflation factor less excluding, and our growth is between 2.5% -5.5%.
in such a turmoil, our foreign exchange reserves of nearly $ 270 billion, less than 40% of the share of GDP, more and more international investors, as well as international asset management companies are very concerned about Brazil , and the ratio of investment to expand their presence in Brazil.
I have already talked about our financial system is an important growth engine in Brazil, our bank ROE of 20%, it can be said that one of the highest in the world. The mean BIS ratio of 16%, and the median in fact, has reached 11%, has been growing, it is very important. And it is also very important in terms of our actual growth,
I also talked about our relationship with China is close. To a large number of Chinese export commodities, China has now become one of our major trading partners.
the same time, we also aggressively imports of Chinese manufactured products, as well as infrastructure products, our mutual relations of cooperation is fruitful, we also hope to extend this cooperation to the management of our financial institutions asset management work.
the entire Asset Management 1.1 trillion, we have a total of 11 300 registered asset management company. In the past we have some tax incentives, but a growth of reasons is an open industry, and our mutual funds, private equity funds, as well as other types of companies, they are everywhere in Brazil. The new international hedge funds and recently has come to Brazil.
but we have a very huge challenge, our industry is still concentrated in the short-term fixed income products, I think we all are not surprised. In the past 20 years, Brazil has long been the world’s highest real interest rates. Although the day before yesterday, our central bank again reduce interest rates, the nominal interest rate is still 11%, our effective interest rate reached 5.5%. Since our real interest rates to achieve such high levels, but our systems are very high mobility, so that our investors have daily liquidity, their funds are very safe, and return high. But we think that this situation will change, we must put our interest rates down to a lower level, but we must also educate investors and the introduction of other asset classes and alternative investments, but this transition is very fine process, we must be careful disposal. As an industry association, we are very close and our regulatory cooperation, the necessary supervision and investor education.
the size of the fund industry is a global ranking of the top six, second only to Ireland and Australia. Brazil’s income continues to increase, we say that 2/3 of the population in a constant process of cumulative savings, and our fund company is also focusing on global development. To do this, our model is very clear.
talk about our regulatory framework, all fund managers have to get to Brazil, the Commission and the certification of our association, we will not direct exchange of information with regulators. If the irregularities, we also have the right to punish. I want to say this punishment is implemented jointly by the SFC in Brazil and we.
We also clarified the requirements of governance, as well as operating some of the rules. If a fund manager, you must first register. File you submit, including your resume, your ID card, and you must be a university graduate, you must prove you have enough experience in the industry and should not be involved in the past five years, to any legal lawsuit.
this rule may have to change, CBM will introduce a new appraisal system, all Brazilian fund managers are required to take such examinations. Fund company in Brazil, your fund manager must be directly responsible for the company’s activities. In other words, on the open market, you can not assume other responsibilities conflict with the interests of any company.
In addition,rs gold, the company must have R & D department, but this one can be outsourced.
our industry associations have over 340 members, 700 companies have followed this self-regulatory requirements. This self-regulatory best practices, we also reached an agreement and CVM, which is very important. PE in China is very high, so that our responsibility is to emphasize that the underwriters and their analysts, and the work they do is correct, can not bring any misleading information. Particularly in the approval process of the regulatory side, it is necessary to prevent it.
it comes to products and services, every day must be for the price of a disclosure. There education is also very important, our association is a very important job.
in the past 10 years, we have a lot of investment professionals, serious work, almost 10 million people around the scale.
with you briefly tell us about our self-regulatory rules which include the following:
first, the Fund’s prospectus by us to examine, including the Fund’s classification, advertising, sales methods, flow control, and the fund manager’s license, license, etc., seem to be very complex. But we have done all of this is to avoid the scandal and the practice of non-compliance may appear on the market. We are now in a transition process, that is, from the money market investment,rs gold, and gradually transition to more of these bond market, stock market investments, and other alternative investments.
Here are a lot of self-regulatory requirements (see PPT), including disclosure of documents to the SEC approved in Brazil, investors more information in this way. That is, every day in the SEC disclosure, so that you can avoid many of them black-box operation of the Fund’s investment portfolio.
let us look at the difference between fund administrators and fund managers. Fund managers, they are responsible established by law, registration, approval of fund, then they have to provide prospectuses, advertising, and marketing materials. The focus of the fund manager, is to focus on the management and investment of the assets of the fund itself, of course, he also responsible for various aspects of the mobility control of the entire fund, as well as professionals qualifications, certifications and so on.
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we are constantly monitoring and tracking the activities of the Fund. We see more need to regulate the areas, we also see our fund assets continue to internationalization, we need to ensure that these new international assets in line with the provisions of the Brazilian local. We need to ensure that the pricing of these products is very reasonable, every day on the disclosure of information in these prices.
In addition, in terms of product sales, we have a very simplified guiding principles for the conduct implementation. We are also concerned about some new types of assets and current control methods, we are constantly adjusted and updated way of examination and supervision.
over time, we hope to have more opportunities and exchange, and regulatory agencies and peer cooperation, because this is indeed a very bright market. We also look forward in 2016 we look at our
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