PANAMA Law and Practice Contributed by: Kharla Aizpurua O., Roberto Vidal and Miguel Arias, Morgan & Morgan
tions do not yet include more flexible parameters or simplified licensing requirements for fintech companies. 2.5 Regulatory Sandbox There is currently no regulatory sandbox avail - able for fintech companies. Regulators are aware of the lack of specific regulations relat - ing to certain fintech companies, and depending on the business model, they try to accommo - date fintech companies within the existing legal framework. However, they are ultimately limited by the lack of regulations, and in many cases, they simply state that the fintech company is not subject to their supervision. 2.6 Jurisdiction of Regulators The regulatory scope of each of the three main financial sector regulators is based on the activi - ties conducted by a company, as outlined in sec - tion 2.2 Regulatory Regime . For instance, if a company is involved in public lending and issu - ing securities, it will need to interact with both the MICI and the SMV. Therefore, it is essential for companies to clearly define the specific ser - vices they will offer and to obtain the necessary In Panama, regulatory authorities do not formally issue “no-action” letters, as is commonly under - stood in jurisdictions like 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 administra - tive position regarding the law’s application. The opinions issued by the Superintendencies are limited to expressing the administrative position registrations and licenses. 2.7 No-Action Letters
regarding the application of a specific provision of the applicable laws and regulations but may not contravene resolutions approved by the Board of Directors of the respective Superin - tendency or the Judiciary on the same subject. The opinions in the case of the SMV, and accord - ing to its regulation, are binding. However, in the case of the SBP, it is not expressly regulated, therefore: • the SBP can specify that they are of general application and binding for the specific con - sultations 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 func - tion, it may or may not be allowed to be out- sourced. Whenever local regulations allow for outsourcing, they generally state the require - ments that the vendor must meet or state wheth- er said outsourcing is subject to notification or prior approval from the regulator. The vendor is generally responsible to the party contracting the outsourcing, but engaging in outsourcing does not exclude the contracting party from its obligations and responsibilities to the regulator. The outsourcing of regulated functions should be assessed individually for each case. For instance, SBP Agreement 9 of 2005 defines “outsourcing” as the practice in which licensed banks engage third parties – either individuals or legal entities, including companies 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 agreements not exempt under SBP Agreement 9 of 2005.
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