Corporate governance

OECD work on capital markets


This page provides a non-exhaustive overview of OECD work relating to capital markets.

OECD Equity Markets Review of Asia

Changing business models of stock exchanges and stock market fragmentation

Since the turn of the millennium, Asian companies have used public stock markets to raise a total of USD 4 trillion in equity capital. Today, Asian companies are the world’s largest users of public stock markets, with initial and secondary public offerings accounting for 47% of all public equity capital raised in the world. As a result, stock exchanges in Asia have emerged as the world’s fastest growing trading venues for listed stocks and several domestic investment banks in the region have started to establish themselves as global actors.

This new annual OECD report follows and analyses trends in Asian public equity markets. It provides policy makers, regulators, corporations and other market participants with a comprehensive and comparable picture of the use and the functioning of public equity markets in Asia.

This report provides an overview of structural changes in the stock exchange industry. It provides data on mergers and acquisitions as well as the changes in the aggregate revenue structure of major stock exchanges. It describes the fragmentation of the stock market resulting from an increase in stock exchange-like trading venues, such as alternative trading systems (ATSs) and multilateral trading facilities (MTFs), and a split between dark (non-displayed) and lit (displayed) trading. Based on firmlevel data, statistics are provided for the relative distribution of stock trading across different trading venues as well as for different trading characteristics, such as order size, company focus and the total volumes of dark and lit trading. The report ends with an overview of recent regulatory initiatives aimed at maintaining market fairness and a level playing field among investors.

The OECD Corporate Governance Factbook

Growth Companies, Access to Capital Markets and Corporate Governance

The Factbook supports the implementation of good corporate governance practices by providing an easily accessible and up-to-date, factual underpinning for understanding countries’ institutional, legal and regulatory frameworks. Governments may use the Factbook to compare their own frameworks with that of other countries or to obtain information about practices in specific jurisdictions.

The Factbook compiles information gathered from OECD and non-OECD delegates to the OECD Corporate Governance Committee as part of its ongoing work. First published in 2014, the Factbook has been updated and expanded to cover 47 jurisdictions.

This report to G20 is about the relationship between corporate governance and corporate access to capital markets. The focus is on growth companies that have the potential to escape a static state of being a small or medium-sized enterprise. Based on company level data, the report provides an extensive empirical overview of how corporations enter and use public equity markets and corporate bond markets. It looks at the functioning of these markets, the investors that use them and the companies that provide them with services, such as credit ratings. From the perspective of growth companies, shortcomings and initiatives for improvements are identified and discussed.

Corporate Bonds, Bondholders and Corporate Governance

Institutional Investors as Owners - Who are they and what do they do?

Worldwide, primary corporate bond markets have become an increasingly important source of financing for non-financial companies. This trend is coupled with a relative decrease in traditional bank lending to non-financial companies and low levels of bond interest rates. Just as shareholders, bondholders can play an important role in corporate governance. They can use both exit and voice.

This report provides a comprehensive global overview of all corporate bond issues since 2000. The report also analyses trends in secondary bond markets, including market liquidity. In order to analyse trends over time with respect to governance, the report provides detailed data on the use and relative importance of different categories of covenants. It suggests that bond investors in their search for yield have overall traded governance rights for higher expected returns. This shift also seems to be associated with higher risk-taking.

This report provides a framework for analysing the character and degree of ownership engagement by institutional investors. It argues that the general term “institutional investor” in itself doesn’t say very much about the quality or degree of ownership engagement. It is therefore an evasive “shorthand” for policy discussions about ownership engagement. The reason is that there are large differences in ownership engagement between different categories of institutional investors. There are also differences in ownership engagement within the same category of institutional investors such as hedge funds, investment funds, etc. These differences arise from the fact that the degree of ownership engagement is determined by a number of different features and choices that together make up the institutional investor’s “business model”.

Strengthening market-based financing of corporate investments

Who Cares? Corporate Governance in Today's Equity Markets

Corporations’ use of capital markets has changed in a number of important ways since the turn of the century. These changes have partly been driven by macroeconomic events that have affected traditional sources of funds and shifted some of the corporate debt from traditional bank lending to corporate bonds. They may also have been influenced by regulatory changes that have contributed to a decrease in the use of public equity markets by small and medium-sized enterprises. In a low interest environment, where institutional investors are pressed to meet their client obligations, corporations have also had to respond to investor campaigns for higher dividends and share buyback programmes. There are two main sources of confusion in the public corporate governance debate. One is the confusion about the role of public policy intervention. The other is a lack of empirical knowledge about the corporate landscape where rules are supposed to be implemented and the functioning of today’s equity markets, where voting rights and cash flow rights are traded. To mitigate some of this confusion, this paper provides both an analytical framework for the role of public policy and a description of the empirical context that influences the conditions for that policy.



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