|Carlos Fradique-Mendez||Hernán Vidal Baute|
The Colombian Superintendence of Finance (SF) issued rules last July creating the category of well-known seasoned issuers or WKSIs (emisores conocidos y recurrentes) for the first time in Colombia. The Colombian WKSI rules largely resemble the WKSI rules from other jurisdictions to the extent they provide a fast track for the registration and public offering of securities. Such fast track translates into time and costs efficiencies, giving issuers better opportunities for taking advantage of market windows and opportunities.
To be considered eligible as a WKSI, local or foreign issuers must meet the following requirements within the three-year period prior to filing the application with the SF, and certify annually that the requirements are being met on an ongoing basis. They must: (i) be registered with the RNVE (Registro Nacional de Valores y Emisores); (ii) complete and publish the survey on Best Practices of Corporate Governance issued by the SF (Nueva Encuesta Código País); (iii) have made at least three registered public offerings of securities in Colombia, for a minimum aggregate amount of approximately $257,740,000 and one of such securities must still be registered and outstanding; (iv) have issued shares, bonds or securities resulting from a securitisation process; and (v) the issuer, its controlling shareholder, and their managers and directors must not have been sanctioned for violations to the rules of the securities' markets in Colombia or abroad.
Colombian WKSIs will be able to launch a public offering two business days after filing with the SF a certificate of compliance with registration and public offering requirements. The offering memorandum and other offering documents are filed with the SF only as a reporting requirement, thereby avoiding the SF's review process that typically takes several weeks.
Sometimes, the SF's review process has resulted in proper amendments and clarifications to the offering documents, promoting market transparency and mitigating liability risks. In some cases, the time required by the SF's review process has even allowed issuers to react to changing market conditions adjusting the structure of the offering. Since Colombian WKSIs will be able to bypass the SF's review process, the diligence standard required to issuers, managers, directors, financial and legal advisors will likely be enhanced in the Colombian securities' markets.
Carlos Fradique--Méndez and Hernán Vidal Baute