The impact of the Covid-19 pandemic on the global economy has had major repercussions for many companies, including those participating in the securities markets.
The uncertainty that we currently live imposes on all participants in the stock market, the commitment to make additional efforts to strengthen and protect the activities of the stock market through transparent, ethical and corporate social responsibility management.
In more developed capital markets, where deeper evaluations of the corporate governance performance of companies are produced, including the use of technological tools that allow evaluating the quality of a company’s management systems, as well as its capacity to manage long-term risks and opportunities, there is evidence that companies that have solid corporate governance management have a sustainable competitive advantage and are a better long-term investment.
By virtue of the foregoing, it can be expected that companies that have adopted good practices in corporate governance will be more strengthened and their management and administration bodies will have the necessary tools to identify opportunities and lead the changes that any crisis imposes. Conversely, companies that have not effectively implemented these practices may face greater challenges in evaluating and managing the risks caused by this pandemic.
When we talk about the existing rules on Corporate Governance for the stock market, we refer to Agreement No. 5-2003 that initially established the rules of conduct for brokerage houses and investment advisers; Agreement No. 12-2003 that incorporates the principles of corporate governance of the Organization for Economic Cooperation and Development (OECD), of voluntary observance by registered issuers, but being obliged to disclose the absence, partial or total adoption of the international principles promoted by said Agreement; and Agreement No. 6-2018 by means of which rules and principles of good corporate governance are adopted, mandatory for brokerage houses and investment managers, investment managers of pension and retirement funds, unemployment fund investment managers and self-regulating organizations. However, the business challenges facing both issuers and intermediaries in the stock market, as a result of the economic crisis caused by the Covid-19 pandemic, require, in addition to complying with current regulations, a commitment and proactive leadership from their corporate governing bodies, in order to implement, in a timely manner, contingency plans and risk management that help preserve the sustainability of their businesses.
The current environment means that both issuers and intermediaries must expect greater emphasis on the development of their corporate governance as they address the consequences of the pandemic and the consequent market volatility. Especially, issuers with registered securities, whether stocks or debts, should understand how the crisis may affect their ability to meet their obligations to disclose relevant facts, presentation of financial information and other obligations to which they are subject and implement the tools. necessary for the continuity of their business and fulfillment of their obligations.
On the other hand, it has been observed how this new reality that is lived has promoted the use of technology and the practical application of means and technological platforms that we already had at our disposal, but that were not being used, either due to lack of need or by natural resistance to change.
The challenges that have been brought about by the limitations imposed by the health authorities, in terms of physical distancing, in order to mitigate the spread of the virus, have led companies to implement the use of all available technological tools, to continue their productivity and thus be able to fulfill their obligations.
Fortunately, unlike other jurisdictions, where there are certain restrictions or limitations to carry out virtual meetings of shareholders or of the management or administration bodies of legal entities, and where regulators have had to issue new regulations to allow and regulate this type of remote meetings, Panamanian legislation already allowed the possibility of holding meetings and shareholders’ meetings by technological or virtual means, and even the approval of resolutions by means of consent without the need to hold face-to-face or virtual meetings.
It is also important to highlight the efforts to develop, implement and maintain the use of technological tools and platforms in different institutions, such as the Electronic System for the Remission of Information (SERI) of the Superintendence of the Securities Market, which allows issuers and intermediaries to send information to the regulator electronically; the Virtual Window of the Public Registry that allows the electronic filing of public deeds and other online procedures; in addition to the use of electronic signatures, which have resulted in the pandemic, allowing business continuity and the management of corporate governance bodies.
This trend could be the beginning of a transformation process towards the digitalization of corporate governance of regulated entities in our stock market, a mechanism that provides transparency in the channels of communication between organizations and corporate governance bodies, and which is already in other jurisdictions, it has become an indispensable tool for compliance with current regulations and an international trend in governance.
In the framework of corporate governance management of entities regulated by the Superintendency of the Securities Market, it highlights the importance that the Boards of Directors ensure compliance with current regulations and assume their role of strategy, planning and monitoring that reflects for the rest of its employees, their commitment to managing the crisis. In this sense, the use of technological platforms that allow this management to continue plays a key role, allowing timely decision-making considering multiple risk factors.
One of the main challenges that issuers and intermediaries in the stock market have faced is the impossibility of holding face-to-face meetings of their boards of directors, shareholders and internal committees, having to coordinate them virtually.
Fortunately, in 1997 the opportune convenience of modernizing some institutions of our Commercial Code was seen, thus materializing the promulgation of Decree Law No. 5 of July 2, 1997, which modified several articles of the Commercial Code, allowing Legal entities the possibility of holding shareholders’ meetings and assemblies by technological or virtual means, and adopting resolutions by means of consent, without the need to convene or hold the meeting or assembly, thus complementing the provisions already contained in the Commercial Code that they apply to legal entities in general, and the provisions contained in Law No. 32 of 1927 that regulates Corporations and Law No. 4 of 2009 that regulates Limited Liability Companies.
Article 31 of Decree Law No. 5 of July 2, 1997, which amended Article 203 of the Commercial Code, is the legal basis that allows shareholders or partners, directors and administrators of any Panamanian legal entity to hold meetings virtually or remotely through technological means, from the place where they are, without the need for physical appearance; all in the same place, provided that the participants have been directly in communication by any of the means used for it.
Said article states the following: “Acts or contracts concluded by telephone or telefax or by electronic means of communication, shall be understood between those present if the parties or their representatives or agents have been directly in communication. Likewise, the meetings of the board of directors or the assembly of partners or shareholders, or of liquidators of companies of any kind in which the participants have been directly in communication by any of the means indicated in the preceding paragraph, shall be understood as being present. In such a case, a record should be made with the expression of the meeting held, the agreements adopted and the way in which the participants have been in communication. The agreements of directors, partners, shareholders, administrators or liquidators of companies of any kind will be valid, even if they have signed the document at different places and dates. ”
As noted, the rule requires that the meeting held by electronic means of communication be documented, imposing the obligation to issue a minutes that contains the information on the agreements adopted at the meeting and the method of communication used for the meeting. It is also recommended to record in the minutes the absent and participating members, as well as a manifestation of consent of the participants and those absent to carry out the meeting by technological means.
The legislation does not require that the president or the secretary of the company act as such, for the celebration of these virtual meetings, for which the assistants will be able to designate a president and / or secretary “ad hoc”; to act as such to replace the or the holders of said charges.
Said minutes, as allowed by the current regulation for face-to-face meetings, may also be replaced by a secretarial certification issued by the secretary of the company, or whoever acts as the “ad hoc” secretary of said meeting or assembly.
Regarding the content of the minutes, it is worth highlighting the provision of article 8 of Agreement 6-2018, which establishes that the content of the discussions of the Board of Directors meetings of entities regulated and supervised by the Superintendence of the Securities Market, “must be duly documented in the record of minutes of the Board of Directors of the company. In the event that under the same company name there is more than one (1) license, either issued by the Superintendency of the Securities Market or by another Regulator, they must distinguish and document the topics covered by type of license ”.
The norm in the Commercial Code also allows to dispense with the holding of meetings and assemblies, including by said technological means, to approve resolutions by written means, even when they were not in contact or communication. This modality is known as approval of resolutions by “means of consent”, given that the person limits himself or herself to expressing his or her acceptance or rejection through some written means.
In the case of the approval of resolutions by consent, even when the norm does not require it, it is convenient that the particulars that motivated the use of this mechanism also be consigned in a certification issued by the secretary of the company, in order to leave a written record of the respective consents, regarding the consent of all the directors, administrators, partners or shareholders of the company, to dispense with the holding of the meeting or assembly, whether with physical presence or virtual participation and the prior notice; and the approval to make decisions in writing, by consent; the way in which each one sent their communication and the vote they issued regarding the different resolutions submitted for their consideration.
From the rule it follows that, in any of the cases, the consent of all the directors, administrators, partners or shareholders of the corporations will be required to carry out the meeting or assembly by virtual means or, to approve the resolutions by means of written consent, regardless of how each one votes regarding the decisions to be adopted, especially in the case of corporations, since Law No. 32 of 1927, which regulates them, establishes as a rule that meetings and assemblies of shareholders are with physical appearance.
It should be noted that the new modalities introduced by Decree Law No. 5 of 1997 apply only to commercial companies that have been incorporated from the date of promulgation of said Decree and those companies incorporated before its validity that have modified their social pacts to introduce these modalities to its corporate governance standards.
In the case of the mercantile companies registered in the Superintendence of the Securities Market, the norms established in Title VI of Decree Law No. 1 of 1999 in relation to the Request for Voting Powers must be observed. Pursuant to article 137 of the Single Text of Decree Law No. 1 of 1999, “Any person or group of persons acting in concert with the request of more than twenty-five effective owners of registered securities to vote, authorize or consent in relation to any matter or meeting must comply with the provisions of this Title and with the agreements that the Superintendency dictates on the distribution and use procedure that should be given to said request, the information that must be disclosed in it for the benefit of the shareholders and on which form such a request should take. Requests for voting powers, authorizations and consents that the Commission deems appropriate to exclude from the application of this Title shall be excluded from the scope of application of this Title, provided that such exclusion does not harm the investor’s public interest. ”
Article 138 of Decree Law No. 1 of 1999, establishes that, “The Superintendency may require that a copy of the requests for voting powers, authorizations and consents be sent to them before they are used, and will prohibit their use in the event to determine that they do not meet the requirements established in this Decree Law or its regulations.”
Finally, article 139, also of Decree Law No. 1 of 1999, provides that, “When determining the information that must be included in the requests that this Title deals with, the Superintendency shall limit itself to requiring the inclusion of information of importance so that shareholders can make informed decisions on the matter or the meeting to which the request for voting power, authorization or consent refers, and will refrain from requesting information that does not fulfill this purpose or imposes an unjustified burden on the person who must disclose such information. The Superintendency may establish different information disclosure requirements based on the type of issue or meeting that is the subject of the request for voting power or authorization or consent, based on the issuer or the value in question or the type of shareholder to whom the request is addressed, among other factors. Requests for voting powers, authorizations and consents may not contain false information or statements about important facts, nor may they omit information or statements about important facts that must be disclosed under this Decree Law and its regulations, or that must be disclosed so that the statements made in such requests are not biased or misleading in light of the circumstances in which they were made. The requests for voting powers, authorizations and consents may contain any other additional information that the person making the request wishes to include, provided that it is relevant and is not information whose inclusion is prohibited by this Decree Law or its regulations. ”
Regarding the information submission from entities regulated by the Superintendence of the Securities Market, said regulator began in 2016 the implementation of the Electronic Information Remission System, better known as SERI.
This Electronic Information Remission System consists of a technological platform that allows the regulator more effective and efficient supervision and analysis through the expedited and secure transmission of information and reports carried out by regulated entities.
This system is allowing Brokerage Firms, Investment Advisers, Investment Administrators, Investment Companies, Issuers, Pension and Unemployment Funds and Self-Regulated Entities (BVP and Latinclear), supervised by the SMV, to send the information and reports as required by the regulations applicable to each entity, quickly and reliably electronically, to the regulator, which has meant the reduction of some operations, the standardization of the reports presented and the automation of the supervision processes, among others, allowing the regulator to better analyze the information received and the creation of a history for the exploration of the information of the regulated entities.
The rules that regulate the presentation of information and reports from issuers and regulated entities are found in the following Agreements issued by the Superintendence of the Securities Market:
Agreement 5-2016 “Adopting the Single Account Plan for Securities Offices regulated and supervised by the Superintendence of the Stock Market” (Modified by Agreement 1-2017 of January 04, 2017; Modified by Agreement 4-2017 of June 28, 2017; Modified by Agreement 8-2017 of December 27, 2017).
Agreement 8-2017 “That adopts the Single Plan of Accounts for Investment Advisers and Investment Administrators, and establishes the forms that must be submitted by the financial reporting entities supervised by the Superintendence of the Stock Market for the purposes of supervision effective ”(Modified by Agreement 1-2018 of May 02, 2018).
Agreement 8-2018 “Whereby Agreement 2-2018 of May 9, 2018 is subrogated, and the terms of the reporting forms on the issuer and investment companies, their operations, businesses and securities are modified. are registered with the Superintendency of the Stock Market ”.
It should be noted that, in accordance with current regulations, the submission of information through the Electronic System for the Remission of Information (SERI) represents a statement under oath, for which said information must be truthful, true and timely, reflecting the reality of the operations and financial situation of regulated entities. Any violation thereof is protected under the provisions of articles 251 and 254 of Decree Law No. 1 of 1999, which indicate the following:
“Article 251. Records, reports and other documents presented to the Superintendency.
Any person is prohibited from making or causing to be made in an application for registration, in a license application, in a report or in any other document presented to the Superintendency under this Decree Law and its regulations, statements that said person knows, or have reasonable cause to believe, that at the time they were made, and in light of the circumstances in which they were made, they were false or misleading in any material respect.”
Article 254. Forgery of books, accounting records or financial information. Altering or falsifying accounting books or records, financial information or entries in records or in custody accounts of a registered issuer, a registered person or an entity with license issued by the Superintendency, knowingly or through gross negligence so that it makes them false or misleading in aspects of importance is prohibited.
This system represents an important advance in the supervision of the securities market, which has allowed the regulatory function of the Superintendence of the Securities Market to continue smoothly despite the challenges posed by remote work, both for regulated entities and for the regulator itself, since there was a secure platform for the submission of information and reports from regulated entities.
The Public Registry of Panama has also offered technological alternatives to corporate governance management, offering through its Virtual Window, among other services, the service of electronic filing of public deeds, a service that has become especially important in the days of Covid-19 as the possibility of presenting documents and formalities in person at the institution has been limited.
This service, which before the pandemic was not being widely used and went unnoticed, allows users of the Public Registry to carry out registration procedures online, without the need for the physical presentation of any document, since all procedures are entered and settled in line, saving time and costs in the process.
In order to use the service of electronic filing of public deeds, an account and a qualified electronic signature are required in a personal capacity to ensure the certainty and transparency of the process. The purpose of the electronic signature is to allow each user to electronically sign all the deeds and additional documents scanned in PDF format, for presentation, attaching them to the template of the electronic filing request. Said qualified electronic signature is a legal equivalent to the handwritten signature, by means of which the content of a document sent through an electronic medium is validated. The process of obtaining an electronic signature is carried out before the National Directorate of Electronic Signature, attached to the Public Registry.
Through the Virtual Window, the payment and registration fees for public deeds can be settled and paid by credit card and the registration fees to be paid can be done in the virtual calculator on the Public Registry website.
Another of the web services offered by the Public Registry through its Virtual Window is the electronic request for certificates. This request is completed online, payment is made by credit card, and the certificate is received by electronic delivery to the email indicated in the request so that the user can directly print their certificate. The certificate has a QR Code and the 32-digit electronic identifier that has replaced the security paper that the Public Registry had been using and that validates the legitimacy of the document, thus maintaining the security standard.
These tools allow issuers and intermediaries to continue carrying out registration procedures within the framework of their respective businesses and registration of minutes of changes in the board of directors and granting of powers, among others, reducing time and costs and ensuring the protection of their collaborators by avoiding the physical presence of the same in said entity.
According to figures provided by the Public Registry of Panama we can observe the increase in the use of electronic means for the processing of applications through its platforms: Virtual Window and Telematic Presentation. This trend reveals that due to the circumstances of confinement and social distancing caused by the pandemic, users have migrated towards the use of these tools, which shows that there is already a change in behavior among users regarding the use of technology in their managements.
The qualified electronic signature is a technological solution that is added to a cryptographic device (smart card or usb token), which allows to give legal value to electronic documents and transactions, by protecting the integrity of the data, authenticating the signatories and guaranteeing the no repudiation of their authors.
The difference with the simple electronic signature is that the qualified electronic signature has automatic legal value, which is presumed by right, while the simple one does not enjoy this legal presumption.
The qualified electronic signature is regulated in Law No. 51 of 2008 that defines and regulates electronic documents and electronic signatures and the provision of technological storage of documents and certification of electronic signatures and adopts other provisions for the development of the electronic commerce modified by Law No. 82 of 2012 that grants the Public Registry of Panama powers of the registry authority and root certifier of electronic signature for the Republic of Panama and creates the National Directorate of Electronic Signature of the Public Registry.
Law No. 51 of 2008 defines the qualified electronic signature as an “Electronic signature whose validity is supported by a qualified electronic certificate that:
The qualified electronic signature offers the following guarantees:
It is worth clarifying that, since, in some Latin American jurisdictions, the electronic signature is also called a digital signature, many times these terms are used as synonyms, however, in the Panamanian jurisdiction, the electronic signature and digital signature are not equivalent. Law No. 82 of 2012 indicates that the “digitized or scanned signature is an image of the trace of the handwritten signature, that is, that it is the result of its scanning. This type of signature is in no case a qualified electronic signature. ”
In practice, we see that a significant number of documents, contracts and resolutions are perfected, by agreement of the parties, using a digital signature, by signing the original document, followed by scanning and sending it to the counterparty to carry out the same procedure, with which the meaning and consent of the parties is understood to be materialized. It is presumed, in good faith, the legitimacy and legality of it because the Commercial Code establishes as a general rule in contractual matters the disregard of formalities for the perfection of contracts. In accordance with it, “Commercial contracts are not subject to special forms for their validity. Whatever the form and language in which they are held, the parties will be bound in the manner and in the terms that appear that they wanted to be bound. Except for this provision, contracts that, according to this Code or special laws, must be reduced to public deed or require forms or solemnities necessary for its effectiveness. ”
From said provision derives that it is permissible, even, the conclusion of contracts by verbal means, unless the law requires their written proof, as stated in article 197 of the Commercial Code, according to which, “The contracts that by provision of the law must be recorded in writing, in physical format or its electronic equivalent, will be signed by the contracting parties and must be kept and accessible, allowing the data relevant to the place, date and time corresponding to the improvement thereof to be determined, subject to the general rules of the legal system. If any or some of them cannot sign, another person will do so at their request and the signature will be legalized by two witnesses. If the law does not provide otherwise, the medium used will be equivalent to the written form, provided that the original medium is signed by the sender or it is proven that it has been issued by the sender. ”
Said norm is complemented by article 198, also of the Commercial Code, by virtue of which “The signature that comes from some mechanical or technological means will be considered sufficient, provided that it has been issued in compliance with the legal formalities established to recognize its validity. ”
From these provisions it derives that the digital signature will have efficacy and validity between the parties to the extent that they have accepted it as a means to express consent and improve the contractual relationship, subject to proof to the contrary by whoever alleges its ineffectiveness and lack of validity.
The use of the qualified electronic signature has been very useful in the securities market as a measure to mitigate contagion risks and guarantee the continuity of the administrative functions of the securities market regulator and compliance with the reporting obligations of the securities. regulated entities.
In this sense, the Board of Directors of the Superintendence of the Securities Market, using the technological tools that are available, issued General Resolution SMV No. JD-4-20 of April 23, 2020, by which it was allowed to in a special and temporary manner, those regulated by license or registration issued by said Superintendency and registered issuers could meet the requirement to authenticate signatures or grant sworn statements before a Notary Public, which are required by the Agreements in force as part of the periodic reports that the regulated and Registered issuers, by electronic sending of said documents in PDF format and with the qualified electronic signature of the grantor.
Likewise, General Resolution SMV No. JD-5-20 of May 21, 2020 was issued, allowing applicants for the registration of securities subject to a public offer to present the affidavit established in Article 2, numeral 14, of the Agreement. No. 2-2010 by sending the affidavit in electronic documents, in PDF format and with a qualified electronic signature.
In another more usual context of the use of electronic signature, the Superintendence of the Securities Market in Opinion No. 7-2019 of December 16, 2019, established its administrative position regarding the signing of contractual documents of regulated parties with clients by electronic signature, establishing that “Agreement 5-2003 is not inconsistent with what is regulated by Law No. 51 of 2008, since said agreement does not expressly contemplate the way of sending or receiving documents, much less makes the use of contentive digital media impossible of a document, the norm does not really require a physical proof on paper of the contractual document, so, in this case, the parties, understood by the Brokerage Firm and the Client, can sign a contract on electronic or magnetic material-device support and that for purposes of evidentiary validity it must have authenticity through the use of the electronic signatures of all the parties involved, having in mind that to be recognized, it must be a qualified electronic signature, in accordance with the provisions of article 9 of Law No. 51 of 2008. ”
Although teleworking was a modality that had been applied in Panama, until the promulgation of Law No. 126 of February 18, 2020, there was no specific regulation that protected the employment relationship of personnel who perform their duties outside the employer’s offices, either from your own home or from a place other than the employer’s facilities.
With the arrival of Covid-19 in Panama, Executive Decree No. 500 of March 19, 2020 is promulgated, by which the closure of a large number of companies and commercial establishments was ordered as an additional sanitary measure, with the aim of mitigating and control the spread of Covid-19 in the Republic of Panama, in addition, Executive Decree No. 507 of March 24, 2020 is promulgated, which exempts personnel from the Superintendency of the Securities Market and financial institutions from so that they continue to provide their services, but, in any case, strictly abiding by the instructions issued by the health authority in this regard, in particular: maintaining the physical distance and the number of people allowed in each physical space, which is why many companies they saw the need to implement telework as the only alternative to maintain their productivity.
In this situation, the Board of Directors of the Superintendence of the Securities Market issued General Resolution SMV No. JD-2-20 of March 16, 2020, which among other provisions allowed the implementation of the teleworking modality contemplated in Law No. 16 of 2020 to those regulated with a license issued by the Superintendency of the Securities Market in order to comply with the requirements of the Agreements adopted.
In accordance with the provisions of said Resolution, the regulated parties, in addition to complying with the requirements of Law No. 16 of 2020, must guarantee the development of their businesses, the continuity of their operations and the attention of their clients, contemplating and applying the pertinent computer security measures to preserve the confidentiality and integrity of the information of its clients. Additionally, those who implement telework must inform their clients and the Superintendence of the Securities Market via email.
The Covid-19 crisis has prompted the creation of standards aimed at mitigating the spread of the virus. Specifically, Executive Decree No. 78 of March 16, 2020, which establishes mandatory compliance with the objective of avoiding the spread of Covid-19 in companies in the country, including teleworking.
What was previously a worker option, which could be opposed, becomes an employer option that is mandatory for the worker, leaving behind the consensus to welcome a mere notification of a new work modality.
Today, companies opt for teleworking for mere survival reasons, instead of adopting this modality in a strategic and coordinated way. However, this modality does not fail to provide important benefits to companies such as: the reduction of operating costs, an increase in the productivity of workers, a reduction in absenteeism, cost savings and time in commuting and the opportunity to add value to the lives of workers, allowing them to reconcile their personal and family life with professional life.
Article 18 of Law No. 126 of 2020, establishes that “the Ministry of Labor and Labor Development will promote the creation of a National Telework Network that includes private companies, universities, the public sector and social organizations, to promote national and regional cooperation around the exchange of learning, research and good practices in telework. The network will promote, sensitize and use telework as a tool that allows bringing work to workers through the use of ICT (information and communication technologies), guaranteeing conditions for decent work. ”
Based on the foregoing, we can foresee that telework will continue to be encouraged and is probably a modality that many companies will continue to resort to even after the crisis. Those issuers or intermediaries of the stock market who have applied telework in their businesses should consider important elements for its proper implementation and regularization, since due to the haste with which some companies applied the measure, it is probable that they have not been complied with all the formalities required by the standard for employers.
As a first consideration, Article 3 of Law No. 126 of 2020 indicates that in the event in which you wish to apply the teleworking modality, either at the beginning of the employment relationship or later it must be established in the employment contract or through an addendum to the employment contract, that the worker will provide services through the teleworking modality, regardless of whether it is part-time or full-time. This article also indicates that the worker who has initiated the employment relationship in person may freely reject or accept the transformation to the telework modality. In the event that the worker rejects this modality, the employer will not be able to consider it as a cause to end the labor relationship nor will he be able to modify the relationship to the detriment of the worker.
On the other hand, Article 5 of the referred norm indicates that the telework contract must be in writing, signed in three originals and sealed before the Ministry of Labor and Labor Development. Said contract must contain the clear manifestation on the part of the worker of his desire to avail himself of this work system, among other declarations, such as, for example, the one that indicates that he has adequate facilities to carry out his duties as a teleworker.
In accordance with the aforementioned, all companies whose work modality was full-time face-to-face and who at this time have agreed on the telework modality with their workers must enter into an addendum to the employment contract, and must register it with the Ministry of Work and Labor Development, using the Mitradel Digital platform. Said addendum must contain the formal specifications required by the new special regulations, which include, among others, the time of the working day, the description of the duties of the teleworker, technological equipment provided by the employer and subsidies for public service expenses.
Some important elements of teleworking that employers should consider are:
As noted, the companies that participate in our stock market, whether as registered issuers, as intermediaries or self-regulated entities, have various technological tools at their disposal to support their corporate governance management. Although technology is not the solution to all the challenges that corporate governance of companies is facing with the crisis caused by the Covid-19 pandemic, it has become an essential tool for compliance with current regulations, effective communication with the regulator and to encourage informed strategic decision-making that guarantees the continuity of its business.
According to the brief regulatory overview to which we have referred we can also conclude that Panama is at the forefront of corporate regulation due to its flexibility and liberality, by allowing entrepreneurs and the securities regulator to implement practical and creative solutions for the decision-making and the conduct of business in general by virtual means without them being stopped by the lack of traditional contact and the formality of face-to-face meetings.
Book “Treatise on the Panamanian Corporation Law, Commented by Article”, by Juan Pablo Fabrega, 2008.
Agreement No. 6-2018 of the Superintendency of the Securities Market, by means of which rules and principles of good corporate governance are adopted, mandatory for brokerage houses and investment managers, investment managers of pension and retirement funds, Unemployment fund investment managers and self-regulatory organizations.
Agreement 5-2016 of the Superintendency of the Securities Market, which adopts the Single Plan of Accounts for Securities Offices regulated and supervised by the Superintendence of the Securities Market. (Modified by Agreement 1-2017 of January 04, 2017; Modified by Agreement 4-2017 of June 28, 2017; Modified by Agreement 8-2017 of December 27, 2017).
Agreement 8-2017 of the Superintendency of the Securities Market, which adopts the Single Plan of Accounts for Investment Advisers and Investment Administrators, and establishes the forms that must be submitted by the financial reporting entities supervised by the Superintendence of the Securities Market Values for the purposes of effective supervision. (Modified by Agreement 1-2018 of May 02, 2018).
Agreement 8-2018 of the Superintendency of the Securities Market, which subrogates Agreement 2-2018 of May 9, 2018, and modifies the deadlines of the forms of the reports on the issuer and investment companies, their operations, businesses and securities that are registered before the Superintendence of the Securities Market.
Commercial Code of the Republic of Panama; August 2019 edition; Mizrachi & Pujol publishing house.
Law No. 51 of July 22, 2008, which defines and regulates electronic documents and electronic signatures and the provision of technological storage of documents and certification of electronic signatures and adopts other provisions for the development of electronic commerce.
Law No. 82 of November 9, 2012, which grants the Public Registry of Panama powers of registration authority and root certifier of electronic signature for the Republic of Panama, modifies Law No. 51 of 2008 and adopts other provisions.
Executive Decree No. 684 of October 18, 2013, which regulates Law No. 51 of 2008 and Law No. 82 of 2012.
General Resolution SMV No. JD-4-20 of April 23, 2020, which establishes special and temporary considerations for those regulated to comply with the notarial requirements established in the Agreements adopted by the Superintendence of the Securities Market, in the documentation that accompanies or it is part of the periodic reporting of reports, and extends the deadline for the delivery of certain reports, as part of the temporary measures adopted before the State of National Emergency declared by the Cabinet Council as a consequence of Covid-19.
General Resolution SMV No. JD-5-20 of May 21, 2020, which establishes special considerations to comply with the presentation of the sworn declaration established in Article 2, numeral 14, of Agreement No. 2-2010 of April 16 2010 adopted by the Superintendency of the Securities Market, as part of the temporary measures adopted before the State of National Emergency declared by the Cabinet Council as a consequence of Covid-19.
Law No. 126 of February 18, 2020, which establishes and regulates teleworking in the Republic of Panama and modifies an article of the Labor Code.
Executive Decree No. 78 of March 16, 2020, which establishes labor-related measures to prevent the spread of Covid-19 in companies in the country.
General Resolution SMV No. JD-2-20 of March 16, 2020, which establishes special considerations for regulators and users of the Superintendence of the Securities Market to mitigate the risk of contagion of Covid-19.
 Summary adapted from the book ” Treatise on the Corporation law of the Republic of Panama
commented by articles”, by Juan Pablo Fábrega, 2008.