Panama Forex Licence
Obtaining a forex license in Panama is made significantly easier through enlisting the professional services of an experienced consultancy firm, who can offer guidance throughout the entire procedure. By understanding the requirements to meet and documentation to provide, you can speed up the procedure and avoid unnecessary complications, thereby allowing you to obtain the license in a timely manner.
Panama Forex Broker Firms – The Panama CVN (Panama ComisiónNacional de Valores, or in English, the Panama National Securities Commission) is the financial authority of Panama that is responsible for the regulation of the stock exchange. The CVN is also responsible for the regulation of the Panama securities industry.
Changes to Panama Securities Law In September 2011 significant amendments to the 1999 securities law were adopted in Panama, (law 67 of September 2011), which materially change the internal governance structure of the regulator and introduced major changes in a number of specific areas. The amendment provides for the change of the name of the regulator, previously named “ComisiónNacional de Valores”, to “Superintendencia del Mercado de Valores”. The amendment replaced the three-commissioner structure with a board of directors and a Superintendent. Also a special council was created (“Consejo de CoordinaciónFinanciera”) to coordinate actions amongst all financial regulators supervising securities brokers, banks, insurance, coops, pension funds and finance companies, with the participation without vote of the anti-money laundering bureau of Panama and the Accounting Board.
Licensing and Registration amendments In addition to modifying the fees that the Superintendant can collect from regulated entities and activities, in connection with, for example, the grant of brokerage licenses and registration of securities offerings, the amendment introduced certain substantive changes in licensing and registration. Juridical persons organized under the laws of Panama or operating locally that are using in its name terms such as “mutual fund”, “pension fund”, “brokerage house”, “broker dealer”, “investment advisor”, “investment fund manager”, “fund administrator”, “credit rating agency”, “price appraiser”, “liquidity provider”, “stock exchange”, “clearing house”, “registered issuer”, “forex” or “FX trading” (in any language) were given 180 days to obtain the applicable license or make the corresponding registration as required under the amended securities law, change its name or proceed with its voluntary dissolution and liquidation. Effective 1st of March, 2012, all forex companies – whether they operate inside or outside of Panama – are required to apply for a brokerage house license (“casa de valores”) granted by the new Superintendent of Securities.
Regulation and Provisions of the Securities Law A major revamp of the provisions regarding violations of the securities law and the consequences thereof, including the procedure to be followed by the Superintendant and some of the penalties that may be imposed, has also been introduced by the amendment. For example, fines for engaging in forex operations without a license are now of at least US$1,000,000. Superintendent may also instruct the Public Registry Office of Panama to make an annotation in the registry dissolving any juridical person using any of the foregoing terms without the corresponding license or registration. Definition of Forex activity in Panama Article 44 of the amended law defines Forex activity as the operation of buying and selling coins and currency at a price or exchange rate (Foreign Exchange Market) on a recurring basis, and authorizes the Superintendent to develop procedures and special requirements and technology that the brokerage houses should maintain for the exercise of this activity. Some exceptions from the compulsory licensing are granted to government transactions. While forex futures and options could only be traded by licensed companies, spot and cash operations were exempt from licenses.
Obtaining a Panama Forex License The requirements for the brokerage house are as follows:
- Applicants must have a paid-up capital of at least US$150,000.
- Be exclusively dedicated to activities related to the broker-dealer house business.
- Applicants must have fully fledged offices in Panama.
- A Board of Directors or its equivalent should be composed by at least three individuals (no corporate directors are permitted), with “proven business and professional integrity”.
- At least one third of the members of the Board of Directors must possess knowledge and experience in subjects related to the stock markets or the financial sector in general. Note: Only individuals who have working experience as principal executives or other similar responsibilities in other public and private entities engaged in financial business, for a period of at least 2 years, are deemed to have appropriate knowledge and experience.
- Have the number of principal executives that the broker-dealer house business volume requires, who must have the corresponding licenses issued by the Superintendant. Every broker-dealer house must at least appoint one person as principal executive.
- Articles of Incorporation must have a corporate purpose adequate to the activities related to the broker-dealer house business.
- Fees for Forex licensing applications
The 2001 Supreme Court Schedule sets attorney fees for brokerage house license application at least US$5,000. Government registration fees for a brokerage house are of US$5,000. In addition yearly supervision fee must be paid to the Superintendent equivalent to 0.0025% of yearly trades (min US$5,000.00 and max US$100,000.00).