In the past decade, the Republic of Panama has evolved
substantially in every single aspect, from the expansion of the
Panama Canal to the enactment of laws fostering investment and
the establishment of multinationals; and certainly, the
Panamanian capital market is not an exception.
Panama has enacted a law that amends the Panamanian
securities regime with the purpose of bolstering the local
securities market, and therefore the economy.
Law 66 of December 9 2016 (Law 66) amends the Panamanian
securities legal framework. The amendment vests the
Superintendence of Capital Markets of Panama (Superintendence),
with the flexibility to dispose of the funds received from
fines imposed on regulated entities; and bestows the board of
directors of the Superintendence with the authority to review
and modify the fees charged (originally limited to the
evaluation of the fees), so long as the modifications are
strictly consistent with costs incurred by the
Law 66 also serves to develop the regime that regulates the
systems of clearing and settlement, which are systems
exclusively managed by the central counterparty clearing houses
(CCPs), central security depositories and the National Bank of
Panama. The new law comprises an extensive array of principles
and provisions that grant a condition of irrevocability to the
obligations deriving from compensation orders, hence providing
legal protection to securities that guarantee the compliance of
undertakings previously agreed.
Besides the increase in the registration fees and the
modifications to the Panamanian securities regime, Law 66 also
adds two new elements into the Panamanian capital markets,
which are the CCPs and the providers of infrastructure
CCPs are known as entities that provide stability and
efficiency to financial markets. Under Panamanian legislation,
these are the entities that carry out as their main activity
the clearing and settlement of operations consisting of
securities and other financial instruments traded on formal
stock exchanges, or in over-the-counter exchanges (OTC).
Furthermore, CCPs interpose themselves between
counterparties in operations that have been previously accepted
for clearing and settlement. In this way, they become the buyer
to every seller and the seller to every buyer, thereby
mitigating potential risks of default.
As for the PoIs, deemed self-regulated entities, their
activity revolves around OTC trading, which includes the
negotiation, registration, payment, and the undertaking of
other financial activities through the offering of services,
infrastructure and systems.
These recent amendments represent another attempt by Panama
to remain at the forefront of the international financial