EL SALVADOR Law and Practice Contributed by: Héctor Torres, Annette Herrera, Daniel Leiva and Raquel Santos, Torres Legal
governing what information can be shared. For example, to share information that involves third parties, additional consent may be required, or sharing may be restricted by third-party privacy rights. Only information that is publicly available or can be disclosed without violating any agree- ments or laws can be shared without restriction.
exchange in the home market or any other iden- tified markets. 10.3 Producing Financial Statements In all transactions and markets, bidders are usu- ally required to produce financial statements, pro forma or otherwise, in their disclosure docu- ments for both cash and stock-for-stock trans- actions. In El Salvador, these financial state- ments must be prepared in accordance with the applicable accounting standards, which are typi- cally based on international financial reporting standards (IFRS) or generally accepted account- ing principles (GAAP), as required by the regula- tory authorities. 10.4 Disclosure of Transaction Documents If a transaction is going to be reviewed by the Superintendency of Competence, the parties involved in a takeover offer or business combi- nation are typically required to file copies of the transaction documents, thus ensuring regula- tory oversight and transparency in the transac- tion process. The specific documents that need to be filed may include the offer document, prospectus and any agreements related to the transaction. Also, there are certain thresholds that are reviewed by the Superintendence, which typically sets a monetary threshold based on the combined turnover of the parties involved. If the transaction exceeds this threshold, notification and review may be required. Market Share The Superintendence may also consider the shares of the merging entities in relevant mar- kets. If the merger could significantly affect competition (eg, by creating or strengthening a dominant position), it may trigger a review.
10. Disclosure 10.1 Making a Bid Public
As of now, the only acquisition in El Salvador made through the stock exchange involved pension fund administrators (PFAs) and a bank. Shares were traded on the stock market, and this case is quite unusual because it involves regulated companies. Specifically, the regula- tions require that any investor intending to hold more shares of these companies, which are subject to specific controls due to their industry, must seek authorisation from the Superintend- ency of the Financial System for approval of the purchase at the conglomerate level. Additionally, when a natural or legal person will not own more than 50% plus one of the shares, but will own more than 10%, they must also request authorisation. However, this does not apply to technology companies but could be applicable in the future for a bank that operates solely as a digital plat- form, which, due to their nature, fall under spe- cial regulations. 10.2 Prospectus Requirements Under the regulations in El Salvador, a prospec- tus is not required for the issuance of shares in a stock-for-stock takeover offer or business com- bination. Additionally, there is no requirement for the buyer’s shares to be listed on a specific
158 CHAMBERS.COM
Powered by FlippingBook