PANAMA Law and Practice Contributed by: Kharla Aizpurua Olmos, Roberto Vidal, Miguel Arias and Eduardo Oteiza, Morgan & Morgan
2.5 Regulatory Sandbox There is currently no regulatory sandbox available for fintech companies. Regulators are aware of the lack of specific regulations relating to certain fintech companies, and depending on the business model, they try to accommodate fintech companies within the existing legal framework. However, they are ulti - mately limited by the lack of regulations, and in many cases, they simply state that the fintech company is not subject to their supervision. Draft Bill 487, cur - rently in discussion in the National Assembly, attempts to introduce a regulatory framework for a regulatory sandbox for fintech companies, although it has not yet been approved as law, and may undergo significant changes should it be enacted. 2.6 Jurisdiction of Regulators The regulatory scope of each of the three main finan - cial sector regulators is based on the activities con - ducted by a company, as outlined in 2.2 Regulatory Regime . For instance, if a company is involved in public lending and issuing securities, it will need to interact with both the MICI and the SMV. Therefore, it is essential for companies to clearly define the specific services they will offer and to obtain the necessary In Panama, regulatory authorities do not formally issue “no-action” letters, as is commonly understood in jurisdictions such as the United States. However, entities can request an opinion to seek regulatory guidance or clarification before undertaking activities. The Superintendencies (SBP and SMV) issue opinions ex officio or upon request, expressing the respective Superintendency’s administrative position regard - ing the law’s application. The opinions issued by the Superintendencies are limited to expressing the administrative position regarding the application of a specific provision of the applicable laws and regula - tions but may not contravene resolutions approved by the Board of Directors of the respective Superin - tendency or the Judiciary on the same subject. In the case of the SMV, and according to its regulation, the opinions are binding. However, in the case of the SBP, it is not expressly regulated, and therefore: registrations and licences. 2.7 No-Action Letters
• the SBP can specify that the opinions are of gen - eral application and binding for the specific consul - tations presented; and • the SBP can specify that they are non-binding without specifying a particular case. 2.8 Outsourcing of Regulated Functions Depending on the nature of the regulated function, it may or may not be allowed to be outsourced. When - ever local regulations allow for outsourcing, they gen - erally state the requirements that the vendor must meet or state whether said outsourcing is subject to notification or prior approval from the regulator. The vendor is generally responsible to the party contract - ing the outsourcing, but engaging in outsourcing does not exclude the contracting party from its obligations and responsibilities to the regulator. The outsourc - ing of regulated functions should be assessed indi - vidually for each case. For instance, Agreement 9 of 2005 issued by the SBP defines “outsourcing” as the practice in which licensed banks engage third parties – either individuals or legal entities, including compa - nies within the bank’s economic group – to perform activities, functions or processes that fall within the scope of their legal operations. Banks must seek prior authorisation from the SBP for all outsourcing agree - ments not exempt under Agreement 9 of 2005. 2.9 Gatekeeper Liability Panama has issued several laws and regulations relat - ing to AML matters. In this sense, financially obliged subjects are responsible for monitoring and examining the activities carried out on their platforms or servers. However, this responsibility stems from being a regu - lated financial subject and not from being categorised as a “gatekeeper”. At present, there is no formal cat - egorisation of a company as a “gatekeeper”. 2.10 Significant Enforcement Actions The three main verticals and their respective regula - tors share similar enforcement actions. The applicable regulator has the faculty to impose penalties based on the evaluation criteria determined by the corre - sponding legal source. Generally, the legal source determines which actions and/or omissions are defined as very serious infractions or lesser infrac - tions. Depending on the extent of the infraction, sanc - tions can include monetary fines, loss of licences or
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