Panama’s Financial Regulatory Landscape: A Guide to Securities, Payment Processors, and More
The Republic of Panama has implemented various regulations to govern the financial sector, ensuring transparency and stability for investors and businesses alike. In this article, we will delve into the key aspects of securities offerings, payment processors, fund administrators, and marketplaces in Panama.
Securities Offerings
Registration with the SMV
In Panama, public offerings of securities must be registered with the Superintendence of the Securities Market (SMV) when made by an issuer or its affiliates, or by offerors affiliated with said issuer. A sale or offer for sale of securities is deemed to have been made in Panama if it is made to individuals domiciled in the country, regardless of whether it was made from within or outside the country.
Exemptions from Registration
While registration is required for most public offerings, certain exemptions apply:
- Sales or offers for sale made to persons outside Panama
- Sales made by issuers or their affiliates to fewer than 25 individuals
- Sales made to institutional investors
However, even in exempt cases, formalities must be complied with, such as notifying the SMV of the offering.
Payment Processors
A Growing but Unregulated Market
Panama’s payment processor market is growing rapidly, but currently lacks specific regulations. While the Sistema Nacional de Pagos (National Payment System) has been the focus of attention in recent years, regulation is primarily focused on clearing houses, with no authority to monitor or authorize non-bank entities involved in payment processing.
Cross-Border Payments and Remittances
Regulation
Money transfers are regulated by Law No 48 of 2003, which requires registration with the Directorate of Financial Enterprises (DFE) for money remittance companies. Cross-border payments performed by banks are regulated by the Superintendence of Banks of Panama (SBP).
Fund Administrators
Licensing and Regulation
Fund administrators in Panama are regulated by SMV Agreement 5-2003, which requires a licence from the SMV for individuals conducting fund administration activities within or from Panama. Contractual terms between fund administrators and investment companies are determined by a model contract presented to the SMV when requesting a licence.
Marketplaces, Exchanges, and Trading Platforms
Licensing
Securities trading platforms in Panama must be licensed by the SMV and comply with the Securities Law. The law defines securities broadly, including bonds, stocks, and other financial instruments.
Conclusion
While Panama’s financial regulatory landscape is evolving, it provides a framework for businesses operating in the country to ensure compliance with relevant laws and regulations. As the market continues to grow, it is essential for companies to stay informed about the latest developments and requirements to maintain a stable and transparent business environment.