{"id":30196,"date":"2020-03-04T16:30:08","date_gmt":"2020-03-04T21:30:08","guid":{"rendered":"https:\/\/morimor.com\/?p=30196"},"modified":"2021-10-20T09:26:16","modified_gmt":"2021-10-20T14:26:16","slug":"a-look-at-the-compliance-measures-applicable-to-the-stock-market","status":"publish","type":"post","link":"https:\/\/morimor.com\/es\/a-look-at-the-compliance-measures-applicable-to-the-stock-market\/","title":{"rendered":"A look at the compliance measures applicable to the Stock Market"},"content":{"rendered":"

Pablo Epifanio, Senior Associate, Morgan & Morgan<\/strong><\/p>\n

The stock market is undoubtedly one of the most important economic forces in the world. Every year, billions of dollars are moved through stock exchange operations, and year after year, in most jurisdictions, the stock market is promoted as a tool for financing or capturing capital for issuers and as an investment for thousands of participants seeking to place their funds in higher yield investments.<\/p>\n

Thus, it is not unreasonable to foresee that although the stock market has had such a positive and important purpose, and in which transactions are increasingly sophisticated and complex, may be used for illicit purposes, particularly those related to financial crimes, including laundering of assets, financing of terrorist groups, among others.<\/p>\n

This article succinctly analyzes the implications and scope of the compliance measures established in Agreement 6-2015 adopted by the Superintendency of the Securities Market of Panama, based on Law 23 of April 27, 2015, by which measures are being taken to prevent money laundering, financing of terrorism and financing of the proliferation of weapons of mass destruction (the \u201cCompliance Act\u201d).<\/p>\n

Regulatory Framework for Compliance Measures in Panama<\/strong><\/p>\n

The Compliance Act approved in 2015, regulated by Executive Decree No. 363 of August 13, 2015, which adopts measures that allow entities regulated under it to prevent the use of their platforms and businesses for purposes related to the crimes of money laundering, financing of terrorism and financing of the proliferation of weapons of mass destruction.<\/p>\n

The Compliance Act classifies those regulated entities: regulated non-financial entities, regulated financial entities and professional activities subject to supervision. The Compliance Act within the regulated financial entities includes the majority of the participants in the securities market, establishing that the provisions of the same apply to:<\/p>\n

a) Self-regulated organizations;
\nb) Securities Firms;
\nc) Investment Managers;
\nd) Pension Fund Management;
\ne) Unemployment Fund Management;
\nf) Investment Companies;
\ng) Self-Managed Investment Companies;
\nh) Investment Advisers; and
\ni) Administrative Service Providers of the Securities Market.<\/p>\n

An important fact to note is that the Compliance Act, Executive Decree 363 and Agreement 6-2015 do not include the issuers of securities registered with the Superintendency of the Securities Market within their scope of application. This is likely to be the case, since most of the essential intermediaries to carry out a public offering and issuance of securities are subject to regulations, including custodians, payment agents, brokerage firms and investment advisors, they are, in short, those that have a direct relationship with investors. At the same time, the issuer would unlikely be able to properly and efficiently apply due diligence measures to investors with whom it usually does not have direct contact.<\/p>\n

The Compliance Act seeks more than anything to establish the regulatory framework applicable to regulated entities in order to facilitate the adequate identification of customers with a risk-based approach, detect funds of illicit origin, establish guidelines regarding the due diligence that regulated entities must applied to their customers, in terms of the application of the \u201cknow your customer\u201d policy and encourage the adoption of risk policies.<\/p>\n

For the purposes of accurately understanding the applicable legislation on compliance, it is important to keep in mind the definition of \u201ccustomer\u201d under the Compliance Act: \u201cnatural or legal person, as defined by the legal provisions that apply for each economic or professional activity indicated in the Law, with which the regulated financial entities, regulated non-financial entities and activities carried out by professionals subject to supervision establish, maintain or have maintained, in an usual or occasional manner, a contractual, professional or business relationship for the supply of any product or services inherent to its activity.\u201d<\/em><\/p>\n

Lastly, the Compliance Act empowers the respective regulatory authorities for the activities carried out by the different regulated entities to oversee the compliance with the Compliance Act and adopt regulations that adjust to the reality of each regulated activity.<\/p>\n

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  1. Sectoral Regulation Applicable to the Securities Market<\/strong><\/li>\n<\/ol>\n