COSTA RICA Law and Practice Contributed by: Douglas Soto, Miguel Elizondo-Soto and Osvaldo Madrigal Méndez, Zurcher, Odio & Raven
4. Governance 4.1 Corporate Governance Requirements The corporate governance regime applicable to banks is defined by the Regulation of Corporate Governance, CONASSIF 4-16. This regulation is mandatory and covers a comprehensive set of governance rules, including:
Competition Commission The Competition Commission is the authority that enforces the competition law, even though there are some special regulations or guidelines issued by SUGEF that cover regulated entities and must be complied with. Thus, regardless of whether or not the transaction is classified as a concentration under the Competition Act, SUGEF requires, pursuant to Regulation SUGEF 08-08, that regulated entities notify and update the information in respect of any relevant owner - ship modification when it occurs. Relevant own - ership is defined as direct ownership of 10% or more of an entity, or indirect ownership of 25% or more of the entity. However, the supervised entity must always conduct a due diligence exer - cise to comply with the know-your-shareholder policy, and ensure that all documents related to it are updated. Exemptions This information is required from all the share - holders down to the final beneficiary level, regardless of whether or not the shares are held through agents, custodians or other legal enti - ties through which the capital may be owned, including trusts, except when the shareholder is: • a company that is a public institution; • a company that is an international or multilat - eral development organisation; • a company whose shares are traded on the domestic or an international stock market; • a financial entity that is subject to consolidat - ed supervision by the supervisory authorities in the shareholder’s legal domicile; or • a co-operative association, a mutual associa - tion or a solidarity association. There are no restrictions or different treatments for foreign shareholders.
• board member duties; • board responsibilities; • board composition; • board member profiles; • nomination processes; • documentation; • board evaluations; • conflicts of interest; • committees; • risk management; • audits; • remuneration; • transparency; • subsidiary governance; and • shareholder rights.
As a consequence of this regulation, the bank is required to approve an internal corporate gov - ernance code. The Regulation on Suitability of Members of the Management Body and Senior Management, CONASSIF 15-22, complements the Regulation of Corporate Governance, with more specific assessment duties for the regulated entity upon appointing a director and/or senior manager, including the subsequent performance assess - ment. Pursuant to this regulation, regulated enti - ties must approve a suitability policy and apply an assessment test for such positions. The current corporate governance regulation draws upon leading international benchmarks
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