From the macroeconomic point of view, the capital markets fulfil two major functions: they provide financing to companies and governments and liquidity to the investors who channel their savings through a portfolio of financial assets.

The regulatory scheme of the market has to prioritize these objectives by assuring information and transparency as well as transactions costs and volumes that optimize the allocation of resources. In order to achieve these targets and to protect investors' interests, stock markets are organized. The development of capital markets contributes to the efficiency and dynamism of the economy, transforming savings into productive investments.

The Buenos Aires Stock Exchange, founded in 1854 is a self-regulated, non-profit organization through which almost all securities transactions in the country are carried out.

This institution authorizes and supervises the quotation of private and public obligations in the Mercado de Valores de Buenos Aires, "MERVAL" (Buenos Aires Securities Market) under the supervision of the Comisión Nacional de Valores. "CNV" (National Securities Commission).

By year-end 2005, over 100 companies and 11 closed-end investment funds were listed in the Bolsa de Comercio de Buenos Aries, "BCBA" (Buenos Aires Stock Exchange) while about 110 companies were authorized to quote their debt bonds (commercial papers). Thus, market capitalization amounts to approximately US$ 2.6 billion, including the Spain-based companies that quote in the local stock market.

The Merval is a private institution associated with the BCBA, organized as a corporation whose capital stock is composed by 183 shares. Each shareholder is entitled to carry out business activities as a broker or a brokerage firm. At year-end 2005, there were 133 brokers and brokerage firms registered with the Market.

The MERVAL regulates, settles and guarantees the transactions carried out by its members. It owns 50% of the Caja de Valores S.A., of which the BCBA owns the other 50%. The Caja de Valores is in charge of the transfers and custody of securities by means of a collective deposit.

Finally, the CNV is a government entity that rules and supervises the public offering of securities, controls the operations of the above mentioned institutions and has regulatory and disciplinary powers.

Legal framework