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Financial Regulation in Guatemala: A Comprehensive Overview

Guatemala’s financial regulatory landscape is shaped by a combination of laws, regulations, and supervisory bodies that aim to ensure the stability, integrity, and transparency of the country’s financial system. In this article, we will delve into various aspects of financial regulation in Guatemala, including fintech, insurtech, regtech, blockchain, open banking, and fraud.

Article 342 “B” - False or Inaccurate Information

According to Article 342 “B” of the Guatemalan Criminal Code, it is a crime to prepare, divulge, or reproduce by any means or communication system false or inaccurate information that undermines the confidence of clients, users, depositors, or investors of an institution subject to the surveillance and inspection of the Superintendency of Banks. The responsible person can be sanctioned with up to three years’ imprisonment and a fine of GTQ 5,000-50,000.

Conversation Curation - Unregulated

In Guatemala, conversation curation is not regulated by any specific law or regulation. Supervisory bodies typically issue warnings based on complaints and their own investigations.

Insurtech

The underwriting process in Guatemala’s insurance sector is governed by the general principles and norms of insurance activity, including solvency, liquidity, risk management, control, and supervision. The country has a range of insurance products, including life or personal insurance, damage insurance, and compulsory social security insurance.

Regulation of Regtech Providers

In Guatemala, only regtech providers that process and/or store technological information when executing an agreement with a bank, financial entity, insurance company, or other supervised entities are regulated. Financial services firms seek to impose data protection, confidentiality, consumer protection, non-compete provisions, and anti-money laundering regulations on technology providers.

Blockchain - Not Applicable

Blockchain is not currently applicable in Guatemala’s financial sector.

Open Banking - Prohibited

In contrast to some countries, open banking is prohibited in Guatemala under the Banks and Financial Laws. Banks and their employees are required to keep information about their operations and services confidential, unless there is a legal or judicial order to disclose it.

Fraud - Focus on Source and Transfer of Funds

The regulators in Guatemala are most closely focused on source and transfer of funds, as well as identity fraud, when it comes to financial services and fintech.

By understanding these regulatory frameworks, fintech companies operating in Guatemala can better navigate the complex landscape and ensure compliance with relevant laws and regulations. As the financial sector continues to evolve, it is essential for stakeholders to stay informed about developments and updates in this area.

About the Author

Consortium Legal is a specialized law firm that focuses exclusively on practice areas across Central America, providing technical excellence for clients. The firm’s fintech practice consists of lawyers with expertise in banking and finance, securities, insurance, regulatory compliance, corporate, taxes, intellectual property, consumer law, privacy, data protection, and litigation.

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