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
Investment advisors offers advice to clients or investors regarding the convenience of investing in, purchasing or selling shares or other participation quotas of the funds or investment companies. During the investment advisory services, they must disclose to their clients that they will receive a consideration for this. Dispositions in Article 40 of Decree-Law 1 of 1999, regarding the obligation to give correct recommendations will be applicable to the activities of the investment advisors as well.
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
The license will need at least 3 (three) natural person Fit and Proper Directors.
A minimum of one shareholder is required.
• 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.
An investment advisor license 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.
The Law does not specify the minimum capital requirement of an investment advisor.