Updates on Investment Account Rules at Securities Brokerage Firms in Panama

• Published date: 15 February 2024
• Author: Rafael Amar
• Law Firm: Blogs Alemán, Cordero, Galindo & Lee

Updates on Investment

Account Rules at Securities

Brokerage Firms in Panama

The Superintendency of Capital Markets of the Republic of

Panama has introduced signif‌icant updates to rules regulating

investment accounts with simplif‌ied processing. These new

provisions aim to facilitate the investment process and make it

more accessible to many investors.

Investment accounts with simplif‌ied processing are designed

to streamline the processes associated with investing in the

securities market. To be considered within this category, the

following requirements must be met:

• A natural person must open the account.

• It must be opened as an individual account.

• Only one investment accounts with simplif‌ied processing

per natural person may be opened in Panama.

• The natural person must meet a low-risk classif‌ication.

• Their opening balance and assets under management

must not exceed the sum of B/. 250,000.00 under any

circumstances.

Among the most relevant developments presented by the Su-

perintendency of Securities Markets, we can observe the fo-

llowing:

1. Client Identif‌ication Parameters.

The new rules remove administrative obstacles by simplif-

ying the documentary requirements for opening investment

accounts to reduce documentation’s complexity, making the

process faster and more accessible, without compromising the

basic components of a complete due diligence. In this sense,

securities brokerage f‌irms must keep detailed records of the

information and documentation applied for due diligence in

identifying and verifying the identity of the natural person

opening the account.

2. Focus on Transparency and Protection.

Applying the simplif‌ied investment account mode requires

securities brokerage f‌irms to develop procedures to monitor,

evaluate, and control inherent risks. This approach is intended

to prevent any misuse of the account, ensure its operation un-

der established conditions, and take additional relevant mea-

sures to keep the product in line with the standards of a low-

risk account.

3. Prohibitions.

The use of the accounts with simplif‌ied processing will be subject

to certain restrictions; therefore, it is prohibited for a person to

open more than one account with simplif‌ied processing in the Re-

public of Panama. Additionally, under no circumstances may the

account exceed the amount of B/.250,000.00. The new provisions

establish that the investment accounts with simplif‌ied processing

may not be subject to leverage, and transfers to third parties are

prohibited. In case of non-compliance with the requirements con-

templated in the agreement, the Superintendency of Capital Mar-

kets will apply the established sanctions.

The recent updates to the rules for investment accounts with

simplif‌ied procedure mark a signif‌icant step towards democrati-

zation and accessibility in Panama’s f‌inancial market. These mea-

sures, which simplify procedures and documentation and have a

clear focus on risk management and investor protection, seek to

encourage broader and safer participation in the capital market.

In this new scenario, these measures are expected to contribute

to the strengthening and sustainable development of the f‌inancial

landscape in the Republic of Panama.

Author: Rafael Amar Lawyer in Alcogal