years ago when the minister for finance asked a group of us to actually do this stock take and advise him on how we can take the capital market further. we identified several issues and i would to share these with you this morning. 1. the capital market was in need of deepening on both products and participation ; 2. the investors were dominated by fnpf both in fixed income and equity. the proposed deregulation of fnpf could diffuse this dominance ; 3. individual participation in the market was negligible. to promote a wider participation, we recommended that the share investment scheme of the fnpf should be extended to government and government guaranteed bonds ; 4. there was a need to increase awareness on all aspects of the capital market ; 5. the preparation of prospectus was costly. avenues where this cost can be reduced should be examined. the possibility of government assistance in this area should be considered ; 6. government should consider issuing bonds only earmarked for small investors ; 7. we should establish what we call market makers ; 8. government to use brokers to float its bonds and treasury bills ; and 9. the cmda act should be reviewed to strengthen the role of cmda and to incorporate the lessons learnt from the last ten years of development. i agree with mrs. mereia volavola that it was about time that changes were made to the capital market act, companies act, foreign investment and other legislations to further enhance fiji ’ s economic growth. the minister in his budget speech last friday mentioned that cmda would study the impact of real time settlement on market trading activities in 2008. i support such a modernisation and i wish the cmda all the best with this project. we at the reserve bank of fiji recently launched a real time gross settlement system or fijiclear. provincial companies i said at the beginning that i was very glad that cmda has brought this group together to talk about you using the capital market more. as i look across our provinces, i note the increasing venture into businesses and investment. i fully support this move. it is inevitable. at the same time, i am impressed with the amount of savings that we can generate at provincial and district levels. we had our nadroga day earlier this month and the opening contribution alone was over $ 100, 000. we do have the ability to generate these high levels of savings. i wonder how much of such savings are being generated at our provincial, district and village level each year

funds ; 2. may get you a lower cost of funds ; 3. may avoid fees and charges ; and 4. equity funding does not fetch interest costs ; mind you there are also risks to using the capital market and i am sure that you will cover these issues in detail in your sessions today. i hope that i have given you a flavour of what the capital market can do for you. let us get back to the question : how does all these support investment and economic growth? there are basically two ways : 1. one, it may encourage more savings. fiji savings rate is very low. if we remove the mandatory savings through fnpf, our saving rate is even lower. for investment to happen, we need to generate more savings. successful countries are normally associated with higher savings rate ; and 2. two, it directly promotes more investment by giving the one borrowing the money alternative sources of funds. with diversified sources of funds, more investors can emerge or more investments are made thus taking us towards the target of 25 percent of gdp. development of the capital market it is therefore extremely important that we develop the capital market in fiji. i must say that we have come a long way since the establishment of the cmda. i was very much involved in the establishment of the authority as the groundwork was done at the reserve bank. i can remember some of the ground breaking decisions that were taken then. they have begun to bear fruit. of course, one of the key roles of the authority is to regulate the market to ensure that everyone plays by the rule. the underlying aim is to protect the investors ’ interest. this is very important. confidence in the operation of the market is critical to people like you using the market. a lot has been achieved over the years in this regulatory area. i recall that one of the other major roles that we identified the authority to have was to develop the market. that was why the word “ development ” was specifically included in the name of the authority. how can one supervise a market that was not there in the first place? this meant that the cmda had to strike the right balance between regulation and development. i said that the market has developed in the last fifteen years. but i still have a sense that we still have some way to go. the challenge therefore is to take stock and re - examine our route. are there constraints that we still need to overcome? if so how can we do that and who should do it? i recall some