Greater cooperation among ASEAN equity markets is desirable. Through collaboration, exchanges in the region can achieve the following benefits:
a. Decrease the cost of operations and technology;
b. Facilitate broker access across exchanges, thus boosting liquidity;
c. Increase the value of the pool of listed companies, preventing flight to other markets outside ASEAN.
The ASEAN Common Exchange Gateway (ACE) initiative of the regional exchanges to forge alliances and provide trading links requires the exchanges to regulate cross-border trading on their markets effectively. It is also important for securities regulators to collaborate more closely to enable effective and timely regulation of cross-border transactions through enhanced information sharing and regulatory coordination. In many aspects, the proposed mutual recognition initiatives and their sequencing (under Strategic Component I) would provide the foundation for the ACE initiative. In response to emerging challenges, ASEAN exchanges have decided to build an alliance to link their exchanges to promote liquidity through increased intra ASEAN trades. As they dismantle barriers to trade and adopt international standards, they will attract more international funds. Key recommendations are summarized in figure 5 below, further elaborated in Attachment to this report (under Strategic Component II).