Policy makers thinking about developing a stronger Asian regional capital market will have to assess this situation in depth. 10. Various potential barriers, which may be related to regulations, taxation, or monopoly, pose serious challenges towards the capital market integration. Regulatory barriers like exchange controls and restriction on foreign listings restrict the movement of capital towards its efficient use.
Taxation barriers alter the economic comparison between different activities or participants leading to narrower markets and higher costs. Monopolistic structures like limitations on the total number of stock exchange members prevent access to particular parts of the market, reduce competition, and increase costs for all users. 11. Also important are fairness barriers and information barriers.