Bolsa de Valores de Lima (BVL), Peru's domestic stock exchange, has rejoined the Mercado Integrado LatinoAmericano (MILA) initiative after reaching a resolution with its national congress on capital gains tax.
MILA, a market linkage between BVL, the Bolsa de Valores de Colombia (BVC) and Chile's Bolsa de Comercio de Santiago (BCS), was disrupted at the end of December 2010 after BVL said it could not participate until Peru's capital gains tax regime was standardised.
Following a meeting of the Peruvian congress in late December the tax, which was previously as high as 30% for some investors, will now be fixed at 5% for both foreign and domestic market participants.
MILA was created to provide domestic brokers with access across the three participating equity markets through an automated model of intermediated order routers. BVL will now rejoin the testing phase of the platform's technology, which began on 22 November. Trading is expected to officially begin later this month.
The MILA initiative will allow brokers in each country to send DMA orders via the infrastructure of local brokers in the other two countries, directly to the exchanges. Once the first stage of the project is completed, trading and post-trade will be conducted according to the rules of the market that lists the traded instrument.
The second stage of the integration, which is expected to be completed by the end of 2011, will see differences in tax and regulation ironed out by coordinating regulatory bodies' and exchanges' rules across Chile, Colombia and Peru.
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