|Diego Alejos Rivera|
Although the Securities and Commodities Market Act is 18 years old and was amended once in 2008, the market remains undeveloped in Guatemala, as the negotiation of securities through public or private placements is limited. To counteract this, the Monetary Board is seeking to pass a new law, which will regulate the market and its players. The Monetary Board through this bill seeks to facilitate the integration and eventual development of the market in Guatemala by substantially modernising the legislation.
However, the bill does not simply aim to modernise the way securities are negotiated in Guatemala, and those who partake in such negotiations. It is designed to overhaul it. In essence the bill aims to advance the modernisation of the national financial system, establishing a regulatory framework that develops new financial instruments and stimulates the securities market through strong supervision.
The Monetary Board intends to delegate to the Superintendence of Banks, as regulator of the financial system, the task of supervising the securities market through a highly technical but incomplete regulatory body. The bill establishes in many of its articles that specific regulations are to be promulgated once the law is in effect for such articles to be applicable. If the regulations are not promulgated in a timely manner, the law may be inapplicable in many aspects.
The fact that the securities market is to be regulated by a new but incomplete law has created great uncertainty as to the outcome of this so-called modernisation.
Diego Alejos Rivera