PANAMA Law and Practice Contributed by: Kharla Aizpurua Olmos, Roberto Vidal, Miguel Arias and Eduardo Oteiza, Morgan & Morgan
of 2001, such as notifying the SMV of the offering (as opposed to registering it). 4.4 Syndication of Fiat Currency Loans Loan syndication frequently occurs in Panama; how - ever, there are no specific laws or regulations regard - ing this. 5. Payment Processors 5.1 Payment Processors’ Use of Payment Rails In general terms, payment processors use existing payment rails or create and implement new ones to the extent they relate to new technologies such as blockchain. 5.2 Regulation of Cross-Border Payments and Remittances Cross-border payments and remittances are regulated from the perspective of tax implications, regulated banks or financial entities and AML/CFT standards. 6. Marketplaces, Exchanges and Trading Platforms 6.1 Permissible Trading Platforms The Securities Law mandates that trading plat - forms for securities and other financial instruments are regulated by the SMV and must have a licence issued by this entity. The law defines a “security” as “[a]ny bond, negotiable commercial instrument, or other debt security, stock (including treasury stock), recognised stock right in a custody account, share, participation unit, participation certificate, securitisa - tion certificate, trustee certificate, deposit certificate, mortgage certificate, option, and any other security, instrument, or right commonly recognised as a secu - rity or determined by the [SMV] to constitute a secu - rity”. Conversely, a “financial instrument” is defined as “[a]ny contract that gives rise to the creation of a financial asset for one entity and the creation of a financial liability or equity instrument for another enti - ty”. This includes all financial assets and liabilities, whether securitised or not, as well as their derivatives, with underlying assets such as currencies and pre -
cious metals. The Securities Law classifies securities trading platforms as “self-regulated entities”. These platforms must establish internal rules and regulations based on the following principles: • protecting the interests of investors; • promoting co-operation and co-ordination among individuals responsible for processing information about securities, as well as for trading, safeguard - ing, clearing and settling securities; • ensuring fair and representative participation of members in governing bodies; • ensuring that fees and expenses paid by members are reasonable and equitably shared; • reporting any violations of the Securities Law by members, directors, officials or employees to the SMV; • monitoring members, directors, officials and employees to ensure compliance with internal rules, and establishing corresponding disciplinary procedures and sanctions; • ensuring the confidentiality of transactions; and • preventing deceptive and manipulative practices or any actions that may affect market transparency, promoting fair practices in securities trading and fostering the development of an efficient market. Commodities Trading Platforms Panama also permits commodities trading platforms under Law 23 of 1997 (as amended) and Executive Decree 11 of 1998 (as amended). The National Com - mission of Commodities Exchange regulates these platforms and requires them to have a licence to operate. Brokers also need a special licence to trade commodities on those platforms. Panama has one commodity trading platform, the Bolsa Nacional de Productos, S.A. (BAISA). Products that can be traded on commodities exchanges include any goods, ser - vices and products, whether domestic or foreign, and contracts or commercial documents that represent, establish or grant rights over these goods, services or products. 6.2 Regulation of Different Asset Classes Securities and financial instruments are regulated by the Securities Law and the SMV. In contrast, commod - ities are regulated by Law 23 of 1997 (as amended) and Executive Decree 11 of 1998 (as amended). Cur -
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