PANAMA Law and Practice Contributed by: Kharla Aizpurua O., Roberto Vidal and Miguel Arias, Morgan & Morgan
Action Task Force (FATF). Since the enactment of Law 23 in 2015, Panama has been actively taking significant steps to comply with FATF rec - ommendations. However, its progress and effec - tiveness have been subject to periodic scrutiny by the FATF. 2.16 Reverse Solicitation Local regulation does not explicitly permit reverse solicitation, albeit it does often apply to operations carried out in or from Panama. Under that premise, when a Panamanian customer independently approaches a foreign provider to access a regulated product or service, the provi - sion of said foreign product or service would not be caught by local regulation. It is very important that the foreign provider does not carry out any prior marketing, solicitation, or advertisement directed at the Panamanian market. 3. Robo-Advisers 3.1 Requirement for Different Business Models As mentioned previously, Panama does not have a special regulatory framework for companies in the fintech industry, including robo-advisers. Therefore, there are no regulations or require - ments for robo-advisers besides the applicable AML legislation (Law 23) and the Data Protection Regulation. SMV regulates “investment advis- ers,” defined as individuals or entities that, for compensation, provide advice to others on the pricing of securities or the suitability of investing, buying, or selling those securities. This includes preparing and publishing studies or reports relat - ed to securities, as well as advising on forex. These regulations apply to both individuals and companies, along with their employees, that offer investment advisory services to clients. However, there is currently no clear guidance on
whether these regulations also extend to robo- advisers. 3.2 Legacy Players’ Implementation of Solutions Introduced by Robo-Advisers Legacy players in Panama have not developed or are only beginning to develop robo-adviser services for their clients. However, it is only a matter of time before all legacy players will offer these services to their clients since there is a trend in Panama for legacy players to create and implement fintech products and services based on modernisation and the current chang - ing dynamic of services offered to a new wave of clients that want to leverage technology for their financial services. 3.3 Issues Relating to Best Execution of Customer Trades Panama has no special regulations regarding the best execution of customer trades. How - ever, some securities laws applicable to brokers establish that the individuals who carry out bro - ker services have an obligation to perform their duties with the diligence and care that a person uses in their business. Brokers must carry out their duties with strict adherence to ethical prin - ciples, good conduct, and transparency.
4. Online Lenders 4.1 Differences in the Business or Regulation of Fiat Currency Loans Provided to Different Entities
There are no significant differences in the busi - ness or regulation of loans to individuals, small businesses, and other entities. The regulation of loan activities is based on the use of the funds rather than the recipients of the loans. Enti - ties that extend loans fall into two categories: licensed banks or financial companies ( empre-
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