Panama Broker Dealer House License

Introduction

Broker-dealer and investment advisor activities are mainly regulated in Panama by Law Decree No.1 of 1999, as amended (the “Securities Law”). The license is issued by the National Securities Commission.

Permitted Activities

Broker-Dealer Houses are entities authorized to engage in activities to receive, process and execute orders and trades on behalf of others or on its own behalf.

• Provide advisement to clients concerning investment opportunities
• Management of custodial accounts
• Management of individual investment portfolios
• Act as agent of payment, transfer and registration
• Grant loans for the purchase of securities
• Mediation in public offerings on behalf of the issuer



Legal Requirements

Categories

Entity Requirements

The following types of investment companies can register with the National Securities Commission and apply for the license:
a) simple investment companies
b) umbrella investment companies
c) multiple class investment companies

Director’s Requirements

The license will need at least 3 (three) natural person Fit and Proper Directors.

Shareholder requirements

A minimum of one shareholder is required.

Compliance Officer

• The license must appoint a person that shall act as Compliance Officer.
• The compliance Officer may be any member of the organization and shall be a holder of the Main Executive License issued by the National Security Commission.

External Auditor

A Broker Dealer House shall appoint an independent external auditor who shall audit the Investment Company at least once a year and prepare the audited financial statements for the company in accordance with Accounting Regulations approved by the National Securities Commission and its Agreements.

Minimum Capital Requirements

In order to obtain a Broker Dealer license in Panama you need to have a registered capital of USD150,000.

Ongoing Obligations

• A broker dealer house must provide the information requested by the National Securities Commission.
• A Broker Dealer House shall reflect the sales information in the Global Monthly Transaction Report referred to in Article 17 of Agreement No. 2-2004 dated April 30, 2004, through Form DMI-5.6.
• Inform in writing to the Commission, any changes in the appointment of the certified public accountant that verifies their interim financial statements or of the certified public accountant or accounting firm that act as external auditor of the person registered or subject to report, within the fifteen (15) days following the date on which the change of accountant or external auditor was decided