Bolsa de Valores de Nicaragua (Stock Exchange of Nicaragua, or BVDN) was created in 1994 and is the only stock exchange

Stock exchange

A stock exchange is an entity that provides services for stock brokers and traders to trade stocks, bonds, and other securities. Stock exchanges also provide facilities for issue and redemption of securities and other financial instruments, and capital events including the payment of income and...

 operating in Nicaragua

Nicaragua

Nicaragua is the largest country in the Central American American isthmus, bordered by Honduras to the north and Costa Rica to the south. The country is situated between 11 and 14 degrees north of the Equator in the Northern Hemisphere, which places it entirely within the tropics. The Pacific Ocean...

.

Background

The exchange is the result of private sector

Private sector

In economics, the private sector is that part of the economy, sometimes referred to as the citizen sector, which is run by private individuals or groups, usually as a means of enterprise for profit, and is not controlled by the state...

 initiatives encouraging the country's market liberalization

Liberalization

In general, liberalization refers to a relaxation of previous government restrictions, usually in areas of social or economic policy. In some contexts this process or concept is often, but not always, referred to as deregulation...

 programmes which began in 1990. Trading operations officially began on January 31, 1994, and as of 2006 BVDN is the only organized stock exchange existing in the country. The institution is a private joint-stock company, founded by most of the private and state run banks, and by representatives of enterprising groups from various business sectors. BVDN offers domestic investors and foreign shareholders a platform to conduct operations within the framework of an open market economy. The main characteristics of this market are the following: (1) Fixed income

Fixed income

Fixed income refers to any type of investment that is not equity, which obligates the borrower/issuer to make payments on a fixed schedule, even if the number of the payments may be variable....

 financial instruments in U.S. dollars and local currency indices; (2) A total exemption of income and capital gains taxes for traded securities; (3) No restrictions on foreign direct investment

Foreign direct investment

Foreign direct investment or foreign investment refers to the net inflows of investment to acquire a lasting management interest in an enterprise operating in an economy other than that of the investor.. It is the sum of equity capital,other long-term capital, and short-term capital as shown in...

 (FDR); (4) An effective regulatory frame.

Legal Framework

Bolsa de Valores de Nicaragua is supervised by the Superintendencia de Bancos y Otras Instituciones Financieras (Supervision of Banks and Other Financial Institutions). This institution supervises trading activity, market positions, as well as stock brokers and issuers of securities. The specific regulatory frame of exchange activity is conformed by Presidential Decree 33-93 or Reglamento General sobre Bolsas de Valores (General Stock Market Regulations). The president of the exchange as of 2006 is Dr. Raúl A. Lacayo Solórzano.