Marketing foreign products and services

Carlos Fradique Me´ndez	Lyana de Luca

The Colombian Financial Superintendence (SFC) recently issued Regulation 053 of 2011 which sets forth new requirements to establish a representative office in Colombia or enter into a correspondent agreement with a local brokerage firm or investment bank, with the purpose of undertaking marketing activities of financial products in Colombia. This is particularly relevant, as Colombian institutional investors are aggressively looking at investment opportunities abroad, largely as a result of the Colombian economy continuing to grow at very attractive rates.

Pursuant to Regulation 053, foreign financial institutions seeking to promote their financial products and/or services in Colombia will be allowed to market and promote exclusively the products and/or services authorised by the SFC. Any kind of promotion or marketing of products and/or services beyond those that were initially authorised must have the proper authorisation of the SFC. The SFC is itself authorised to impose sanctions to representative offices and local correspondents who undertake marketing activities with respect to non-authorised products and/or services.

In addition, the new regulation includes new reporting duties for the legal representatives of the representative office and for the local brokerage firms and investment banks who act under a correspondent agreement, along with new obligations in connection with providing to prospective clients, adequate information regarding the foreign entity's products and/or services. Another relevant amendment to the marketing regime, included by Regulation 053, consists of the obligation imposed on the legal representatives of the representative office and for the local brokerage firms and investment banks who act under a correspondent agreement, to take all necessary measures to prevent the foreign entity's operations from being used for the purposes of conducting money laundering activities.

Lyana de Luca and Carlos Fradique-Méndez

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