GUATEMALA Law and Practice Contributed by: Ignacio Andrade Aycinena, Alejandro Solares Solares, Claudia Pontaza Rubio and Lester Meda Ruano, Lex Atlas
respected. There are no other hurdles to stakebuilding in Guatemala. Information rights are minimum require - ments under the law and cannot be waived in articles of incorporation. There are no confidential statutory rules for reporting standards, but certain entities have introduced articles of incorporation with mandated confidentiality rules for company information. 4.4 Dealings in Derivatives In Guatemala, dealing in derivatives is allowed. Some derivative regulation exists under the Law of the Securities Market and its Amendments. The only regulated derivatives are conditional and term agree - ments under the current Securities Law of Guatemala, Decree 34-96 and its amendments, with very general provisions in the law and no contract-specific type of registration requirements, except if such derivatives are subject to a public offering. Swaps agreements and other derivatives are unregu - lated and, usually, allowed under innominate agree - ments allowed under the Code of Commerce and the Securities Law. Tax treatment of derivatives is not regulated and may cause, for Guatemalan tax purposes, non-deductibil - ity of derivatives transactions. 4.5 Filing/Reporting Obligations Under the Law of the Securities Market, filing/report - ing obligations depend on the nature of the derivatives offer. When offered to more than 35 persons, it will be deemed a public offer and certain requirements (such as registration at a Stock Exchange Registry and for the issuer to obtain a risk qualification) shall apply. When offered to 35 people or less, it will be deemed private, and the offer should be made directly to each of them. Neither the law nor the regulations contain any derivative-specific registration requirements for public offerings of derivatives. There are no competition laws mandating the registra - tion of derivatives or filing obligations.
Derivative agreements remain unregulated as secu - rities; no securities disclosure exists regarding such agreements and when existing they are usually dealt with in extra-market activities under the securities law. 4.6 Transparency There is no legal obligation for a shareholder to notify the purpose of the acquisition. The only legal require - ment is to inform of the intention to issue shares of the company so that existing shareholders can exercise their pre-emptive right under Article 127 of the Com - mercial Code. For issuers of shares that are registered securities for public offering purposes, a notice of intent to acquire shares is a requirement under Article 39 of the Securi - ties Law with its general conditions, to the company, the registry and the exchange in which the shares are traded, with such requirements as the exchange and registry requests in addition to the price, terms of pay - ment and number of shares to be transacted. The acquisition of controlling voting trusts is also sub - ject to notices to be provided to the regulator and in any public notice of a shareholders’ meeting in which such rights will be exercised. As a practical matter, no registered public offering of shares is currently in place in the Securities Registry of Guatemala. Only if the target is a financial or insurance institution is it required to disclose a deal, preferably (but not mandatorily) when a negotiation starts, to the Super - intendency of Banks for its approval before obtaining the Monetary Board’s approval. If the target is a pri - vate company and only some of its equity holders or shareholders are negotiating, there is no requirement to disclose a deal unless the company will increase its share capital to complete the deal. Share capital increases are subject to a pre-emptive right by shareholders, which must be waived or not exercised before a third party can participate in any 5. Negotiation Phase 5.1 Requirement to Disclose a Deal
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