Reforms to the Securities Market Law adopted by Law 23 of April 27, 2015

Law 23
Of April 27, 2015
That adopts measures to prevent money laundering, terrorism financing, and the financing of the proliferation of weapons of mass destruction, and issues other provisions

THE NATIONAL ASSEMBLY
DECREES:

Title XI
Additional Provisions

Article 69. Article 14 of the consolidated text comprising Title II of Law 67 of 2011 is hereby amended as follows:

Article 14. Powers of the Superintendent. The following are the powers of the Superintendent:

1. Resolve requests for the registration of securities for public offerings and any others presented to the Superintendence in accordance with the Securities Market Law.

2. Cancel ex officio or at the request of the party the securities registrations recorded with the Superintendence.

3. Suspend public offerings that violate provisions of the Securities Market Law or when so mandated by law.

4. Issue, suspend, revoke, cancel, and deny licenses whose granting is the responsibility of the Superintendence in accordance with the provisions of the Securities Market Law.

5. Receive notifications in cases of the opening of branches or subsidiaries in Panama and abroad by entities licensed by the Superintendence.

6. Examine, supervise, and audit the activities of licensed entities issued by the Superintendence, as well as their senior executives, securities brokers, and analysts within the functions inherent to their licenses, as applicable.

7. Examine, supervise, and audit the activities of investment companies.

8. Supervise and audit foreign branches of entities licensed by the Superintendence, in accordance with procedures established by agreement.

9. Issue, cancel, or deny the registration of credit rating entities and price-supplying entities according to procedures established by agreement.

10. Conduct inspections, investigations, and proceedings provided for in the Securities Market Law, subject to the investigation and sanctioning procedure of the Superintendence.

11. Impose the sanctions established by the Securities Market Law.

12. Authorize the draft articles of incorporation and reforms related to the securities market activity, when involving a change of corporate name, merger, liquidation, and reduction of share capital when it implies an effective refund of contributions by entities licensed by the Superintendence.

13. Establish bilateral or multilateral cooperation links with foreign securities market supervisory entities or authorities to facilitate effective supervision and international investigation.

14. Establish cooperation links with public institutions or private institutions of a guild or educational nature.

15. Issue certifications related to the existence and activities of entities licensed by the Superintendence or by the National Securities Commission based on information recorded with the Superintendence.

16. Issue certifications regarding securities registration with the Superintendence.

17. Initiate collective class actions, with the decision of the Board of Directors of the Superintendence, and use any other actions and measures within its reach to enforce the Securities Market Law.

18. Issue opinions expressing the administrative position of the Superintendence regarding the application of the Securities Market Law.

19. Issue necessary circulars with instructions for the compliance with the Securities Market Law and the regulations developing it.

20. Acquire goods and contract services necessary for the proper functioning of the Superintendence and to execute or perform the functions entrusted to it by the Securities Market Law.

21. Prepare the draft annual budget, the annual report of the Superintendence's activities and projects, and submit them for consideration to the Board of Directors.

22. Fix salaries and other emoluments, as well as select, appoint, transfer, promote, grant leave with or without pay, and dismiss employees and officials of the Superintendence, and apply the corresponding disciplinary sanctions.

23. Ensure the execution and efficient administration of the Superintendence's annual budget.

24. Approve contracts through exceptional procedures required by the Superintendence for amounts less than thirty thousand balboas (B/.30,000.00), in accordance with the circumstances provided for in the Public Procurement Law and its regulations on said procedure.

25. Present the following documentation to the Board of Directors:
    a. The unaudited financial statements of the Superintendence. Quarterly reports shall be presented within two months following the close of each quarter of each fiscal year, and the annual report within two months following the close. b. The annual and quarterly work reports on the same dates as the financial reports are presented.

    c. The monthly budget execution.

26. Resolve all matters of an administrative nature that are not expressly reserved for the Board of Directors or another authority.

27. Authorize, modify, and revoke exceptions to the use of denominations related to the Securities Market, as well as communications and actions referred to in Article 332 of Decree-Law 1 of 1999.

28. Require any person, natural or legal, to submit information or documentation necessary for the purposes of effective supervision, investigation, or to share it with foreign supervisory entities or authorities of the securities market with which the Securities Market Superintendence has signed reciprocal cooperation agreements or are part of multilateral memorandums of understanding.

In cases where the Securities Market Superintendence requires banking information, it shall be requested through the Banking Superintendence. The Banking Superintendence shall be empowered to request information on liabilities and depositor identity from banking entities. Such exchange of information shall be carried out in accordance with a memorandum of understanding signed between both regulatory entities for such purposes.

The Superintendent may delegate functions, subject to the decisions and guidelines of the Board of Directors, to officials of the Superintendence, with the exception of adoption or modification.

29. Summon and take statements from any person who may contribute to or aid the success of investigations conducted by this Superintendence or another foreign securities market supervisory organism or entity that is part of a multilateral memorandum of understanding signed with the Superintendence.

The Superintendence may use any technical and legal means to obtain a complete, full, and faithful record of the statements, complying with the formality of being transcribed and signed by the declarants.

30. Establish bilateral or multilateral cooperation links with local supervisory authorities of financial activities to strengthen local effective supervision mechanisms, as well as to update preventive regulations, exchanging and supplying information useful for the exercise of the supervisory function by local authorities.

31. Exercise other powers assigned by the Securities Market Law and other regulations.

The Superintendent may delegate functions, subject to the decisions and guidelines of the Board of Directors, to officials of the Superintendence, with the exception of adoption or modification.

Article 70. Article 30 of the consolidated text comprising Title II of Law 67 of 2011 is hereby amended as follows:

Article 30: Understandings with foreign supervisory entities. The Superintendence shall conclude bilateral or multilateral agreements of understanding and cooperation with foreign securities market supervisory authorities or entities, with the object of facilitating effective supervision and international investigation, requesting, exchanging, or supplying necessary information for the better development of supervisory and investigative functions regarding securities market agents.

Cooperation between the Superintendence and supervisory entities abroad shall be based on principles of bilateralism and reciprocity, mutual cooperation, confidentiality of information, relevance of the information request for specific purposes of effective supervision and investigation regarding agents and participants in the securities market that could include an investigation or sanction procedure in the administrative, civil, or penal sphere, provided they are conduct derived from infringements of the securities market, as well as any other principle deemed convenient for the purposes of effective supervision of securities markets.

The Superintendence may issue norms, procedures, and requirements that must be complied with regarding the application of this article.

Article 71. Article 331 of the consolidated text comprising Decree-Law 1 of 1999 is hereby amended as follows:

Article 331. Access to information and confidentiality. All information and all documents presented to the Superintendence, or obtained by it, shall be public and may be examined by the public, unless:

1. They concern industrial or commercial secrets, such as patents, formulas, or others, or business or financial information whose confidentiality is protected by law and which is not required to be made public to fulfill the purposes of this Decree-Law.

2. They have been obtained by the Superintendence in an investigation, inspection, or negotiation related to a violation of the Securities Market Law.

Notwithstanding, the Superintendence may present such information and documents before justice courts in a collective class action, to the Public Ministry in case it has reasonable grounds to believe that a violation of criminal law has occurred or to comply with the provisions of the article regulating supervision in the Securities Market Law.

3. At the request of an interested party, the Superintendence has agreed to keep them confidential, because there are justified reasons for doing so and because the disclosure of such information or document is not essential to protect the interests of the investing public.

4. They concern information obtained through the Banking Superintendence in accordance with the powers established in numeral 28 of Article 14. The Securities Market Superintendence may only share such information with foreign financial supervisory entities of the securities market, provided it has signed a multilateral memorandum of understanding.

5. They concern information or documents that the Superintendence determines by agreement should be kept confidential.

The Superintendence must reveal information required by a competent authority of the Republic of Panama in accordance with the law. The Superintendence shall not be empowered to supply information that has been obtained through a local or foreign financial supervisory entity under a multilateral memorandum of understanding. In such case, the Superintendence will request the competent authority in the Republic of Panama to request such information from the supervisory authority of origin, whether local or foreign.

The Superintendence shall take necessary measures to preserve the confidentiality of all information and all documents that must be kept confidential in accordance with this article.