Beside the linking of trading processes, it is also useful to create such regional instruments as warrants and depositary receipts which might be attractive for risk-avoiding investors both intra- and extra-regional. Among the "instruments", there should be a particular focus on projects envisaging regional "country funds", with a large basket of enterprises from both countries with wide experience in the field as well as new ones. This can solve the problem of information exchange and protect small investors.
"Country funds" are the best instruments for separating country risk from company risk. There are two reasons for this: (a) investors can choose the most attractive and best-performing enterprises of the countries of the region, and, (b) "country funds" pool risks associated with individual companies, i.e. the good performance (high yield) of certain companies in a fund's basket may compensate for any failure of others. These funds may sometimes be floated on international financial centres but there may also be locally traded ones at the disposal of extra-regional investors who have little experience in intra-regional individual enterprises.
The creation of "country funds" is an issue promoted jointly by private actors (stock exchanges, interested companies) and public regulators who may participate in setting criteria and actual selection. It can also, like in Argentina and India, be endowed with special treatment in tax, capital repatriation and other special provisions.