Capital Markets

Last verified on Thursday 22nd February 2018

Paraguay

Oscar A Mersán, Pablo Lu and Marcelo Corrales
Mersan Abogados
  1. 1.

    Which laws, regulations and administrative rulings govern the offering and trading of securities and how are they proposed, adopted and amended?

  2. The offering and trading of securities in Paraguay is governed by:    

    National laws and Central Bank General Resolutions 

    • Law No. 5810/17 – is the new law regulating the stock market, which regulates securities public offering, their issuers, the assigned values for public offering, the functioning of exchange houses, and all participant in the Stock Market establishing the National Securities Commission (CNV). This is an extensive and comprehensive new law, which contains 234 articles broken down into 11 separate titles covering all aspects of the stock exchange market. 

    It is worth mentioning that the provisions of this law shall not apply to the securities issued by the Executive Power through the Ministry of Finance or the Central Bank of Paraguay, unless the Executive Branch or the Central Bank decides to channel the placing of the bonds through the CNV.

    • Law No. 861/96 – regulating the operations of banks, finance corporations and other credit institutions.   
    • Resolution CNV CG No. 2817 – which establishes in a transitory manner, the validity of the Regulatory Resolutions issued by the National Securities Commission prior to Law No. 5810/17.
    • Resolution No. 763/04 – which regulates the roles and operations of the CNV created by Law No. 1284/98, Law No. 1036/97 which creates and regulates the operations of securitisation companies.   
    • Law. No. 1163/97 – which creates and regulates the operations of the exchange products houses.   
    • Law No. 5452 – 23 July 2015, which regulates the Investment Patrimonial Funds under the supervision of the CNV – The investment patrimonial funds are those formed with the monetary resources of physical or legal persons and  captured by companies specialised exclusively in their administration to be invested in the way that is provided in this law, at the risk of the participants, contributors or share-holders. The funds can be distinguished in “mutual” and “investment”, as follows:
      • Mutual fund: is the patrimony integrated with contributions of physical or legal persons, whose participation fees are essentially redeemable.
      • Investment fund: is the patrimony integrated with contributions of physical or legal personal, whose contributions are expressed in non-redeemable participation quotas.
    • Law. No. 921/96 – which regulates fiduciary business.   
    • Central Bank Resolution No. 8/11 – which regulates the bonds public offering through the Stock Market.

    Rules of The National Securities Exchange Commission (CNV)

    • Resolution CNV CG No. 3/11 - Rules governing the registration, publicity and submission of periodic information of bond issuance by financial intermediation entities licensed by the Central Bank of Paraguay.   
    • Resolution CNV No. 1273/10 – Rules governing the emissions trading under the Global Emissions Trading Framework.   
    • Resolution CNV No. 1260/10 Rules governing the issuance of debt securities under the Global Emissions Trading Framework.   
    • Resolution CNV CG No. 5/11 – which approves the Resolution No. 1010/11 adopted by the Board of BVPASA (Asuncion Stock Exchange) – which establishes the procedure for the registration of Bonds issued by Financial Intermediary Entities authorised by the Central Bank of Paraguay, to operates through the BVPASA.   
    • Resolution CNV No. 1244/09 – which approves the Asuncion Securities and Goods Exchange Operating Regulations and Electronic Trade System Operating Regulations, created by Resolution No. 9 of the board of BVPASA.   
    • Resolution No. 885/09 – Electronic Trade System (SEN) Operating Regulations.     

    Rules of The Asuncion Stock Market SA (BVPASA)       

    • Created by Public Deed No. 707/1977, the Asuncion Stock and Products Market SA (known as BVPASA) successively modified and updated its by-laws to adjust to the requirements imposed by the Stock Market Law No. 1.284/98 and the National Securities Exchange Commission, which was completed on 17 March 2009 and duly registered in the Public Records on 13 April 2009.    
    • Resolution BVPASA No. 1158/13 – which extends the terms of the Electronic Trade System (SEN) Operating Regulations and provides for the opening of sub-custodian accounts.     

    Legislation is initiated, considered or amended by the Paraguayan Congress, while the Commission regulations are proposed, incorporated or amended by their board of directors. Similarly, the Asuncion Stock Exchange (BVPASA) Regulations are proposed, incorporated or amended by their board of directors; however, they must be submitted for final approval to the CNV.

  3. 2.

    What is the rationale behind this legislation?

  4. The Paraguayan capital markets began operating in 1993 and to promote capital markets development in an equitable, efficient and transparent way; various new legal instruments were implemented.

    The rationale of the Paraguayan legislation is to create a legal and regulatory framework to assure capital markets development supported and based on reliable and accurate information. Hence, legislation and regulations on market participating companies seek to accurately regulate the information that issuers and offering entities or corporations shall provide on their legal, economic and financial situation, on the securities to be issued and about the information that should be released in their public offering.

    Careful consideration is given to the use of privileged information, avoiding the possibility of conflicts of interest and price manipulation.

  5. 3.

    Which regulatory authorities oversee capital markets and what is the scope of their jurisdiction?

  6. The supervision of the capital markets is overseen by the CNV. The CNV is the official body responsible for the promotion, supervision and control of equity markets in Paraguay. The CNV is an entity created and regulated by a public law, with legal autonomy with sufficient authority to exercise of its functions and duties, with jurisdiction covering the Territory of the Paraguayan Republic. Its main activities are as follows:

    • regulate the capital markets;
    • supervise and keep track of the register of participants in the stock market and of their issued securities;
    • carry out inspections and audits; and
    • promote the Paraguayan capital markets.

    Additionally, the CNV may impose sanctions or adopt corrective measures to activities that undermine the correct stock market development or avoid or elude the due and formal compliance of any of the market regulations.

    In conjunction with the CNV, there are other parties affected and submitted to the stock market regulations, such as the Stock Exchange, stockbrokers (brokerage houses for Paraguay), securities issuing companies, investors, external auditors, fund managers and risk rating agencies.

  7. 4.

    How is financial fraud and price manipulation in capital markets regulated?

  8. Since the CNV is mainly responsible for promoting a transparent and competitive securities market, it was granted with the power to force upon sanctions and adopt corrective measures to activities undermining the correct stock market development, watching and monitoring over the transparency of stock exchange markets transactions and ensuring the correct and free formulation of stock prices in the market.

    To achieve this aim, issuers and entities shall submit information on their legal, economic and financial situation and on any relevant data concerning the issuing company, the securities to be offered, the economics, financial, targeted market, growth potential, eventual operational and country risks factors, to the Commission, to the Asuncion Stock Exchange and to the public. The above-mentioned information must be disclosed in a truthful, sufficient and timely manner, with the time period and publicity in accordance with the formalities specified by the Commission.

    The advertising, publicity, or any other commercial practice managed or hired by issuers, brokerage houses, stock exchanges or any other person engaged in the issuance or placement of securities, must not contain statements that may mislead the public about the nature, prices, profitability, redemptions, liquidity, guarantees or any other characteristics of the securities offered or about the reliability of the issuers.

  9. 5.

    What sanctions and remedies can the regulatory authorities impose?

  10. Law 5810/17 bestows the CNV with sufficient power to impose sanctions to those who seek to provide false and misleading information or manipulate prices, violating the investors’ rights. The CNV may apply the following sanctions:

    • warning;
    • a fine up to an amount equivalent to two hundred minimum monthly salaries, established for workers of various activities not specified;
    • suspension or disqualification for up to 10 years to perform administrative or supervisory functions in institutions supervised by the Commission;
    • suspension of the authorisation to make a public offering of securities for up to two years;
    • prohibition to make public offer of securities;
    • cancellation of registration of the Registry that enables to perform any of the qualities that this law allows.

    Sanctions will be applied based on a graduation criterion that addresses the seriousness of the infraction and the existence of repetition or recidivism.

    The administrative sanctions are applied by the Commission, via a summary procedure, which may be carried out on its own initiative or by means of a filing a complaint.    

    The acts of the following persons are punishable by criminal proceedings:

    • Those who spread false information with the purpose generate misleading on the stock market, even if they purposelessly leak information, which could generate advantages or benefits for themselves or to third parties.
    • Directors, administrators, managers of a public offer of securities issuer who maliciously make false statements disregarding their duty to report in accordance to the law.
    • Those who, breaching the capital markets legislation, trade securities transaction with the aim to stabilise, fix or vary prices artificially.
    • Those who deliberately violate the provisions of the law regarding privileged information.
    • Those who deliberately provide false records or certify false facts to the CNV or to the Stock Exchange and/or the public.
    • The securities intermediaries’ representatives who provide false certificates about transactions performed by them or register their operations without executing the security transfer.
    • Auditors who fraudulently report false statements about the financial situation to fool the public, or the qualification of a publicly held company or to obtain unlawful tax incentives.
  11. 6.

    What are the private remedies an investor may pursue?

  12. The public offering of securities should be submitted for approval to CNV, which could accept or reject the terms and conditions stated in the offering concerning resolutions of controversies. Investors may file complaints before the Commission or before the Asunción Stock Exchange. In the event of punishable acts, investors may also file a complaint with the Public Prosecutor’s Office. In the event of non-payment, they have the right to initiate a legal action in court against the issuer.

    There are no legal restrictions to insert mediation and arbitration clauses in the public offering and submit the same to international jurisdictions provided said terms and conditions are properly stated in the offering and become approved by the CNV.

  13. 7.

    Give details of the frequency and nature of enforcement actions or private actions. Describe whistle-blower protection and incentives under the regulations.

  14. In a permanent way, the Commission carries out controls of the supervised subjects. Administrative proceedings do not take place very frequently in Paraguay, as well as private complaints regarding non-compliance of the Capital Markets Law, mainly due to the reason that it is still an emerging market. 

  15. 8.

    What is the legal definition of a ‘security’ and which types of securities are commonly traded?

  16. The Securities Market Law defines the concept of securities as the necessary instruments to exercise the economic and financial rights therein stated. They grant property right to its holder.

    The types of securities that are usually traded on the Paraguayan Stock Market are:

    • stock company shares;
    • short-term and long-term corporate bonds;
    • treasury bonds;
    • municipal bonds;
    • promissory notes;
    • bank certificates of deposits (CDA);
    • inter-banking and financing institutions money calls (CCI);
    • investment titles (TI);
    • coupons generated or attached to certain financial instruments;
    • negotiable securities issued under fiduciary developments;
    • subordinated bonds; and
    • financial bonds.
  17. 9.

    How are securities offered and sold to the public?

  18. Any public offer of securities shall require the authorisation of the CNV. The Commission may exempt certain public offers from compliance with any of the requirements of Law No. 5810/17, by means of general regulations.

    Issuers that are in the process of liquidation will not be able to make a public offering of securities.

    Securities issued in certificates or title of ownership must be negotiable, have the same features and grant the same rights. 

    The values ​​will be represented in titles, which are necessary instruments to exercise the literal and autonomous right that is stated in them.

    A public offering may also be made with non-consigned securities that represent credit, subscription, ownership, participation or other rights, in which case, certificates must be issued stating the rights conferred, in accordance with the regulations of the Commission.

    The contracts of credits arranged under the modality of collective financing, either through electronic platforms, or through other means, are not included in the scope of this law 

    The public offering can only take place once these certificates or title are duly registered in the Stock Market Registry.    

    In addition, all securities issuers must be registered in a stock exchange, which must be done within a maximum period of 10 business days from the submission of the documents approved by the Commission.

  19. 10.

    What are the disclosure requirements for securities issuers for both public and private offerings?

  20. The Capital Markets Law requires entities listed in the Registry to disclose certain information to the Commission, the Asuncion Stock Exchange, and to the public, to disclose their legal, financial and economic situation, the securities issued and their respective offer and other relevant facts.

    The above-mentioned information must be disclosed in a truthful, sufficient and timely manner, with periodicity, publicity and in accordance with the formalities stated by the Commission.

    The CNV must authorise all publicity, prospectus or information to be addressed to the public about securities or stock transactions carried out by entities governed by said law. The CNV must order the immediate suspension of all advertising statements by those who make a public offering or those who act as intermediaries when they do not comply with the law or if the advertising is considered misleading by the Commission.

  21. 11.

    Are there exemptions from securities registration?

  22. The following must be registered in the Capital Markets Registry:

    • the public offer of securities;
    • the issuers, which may be corporations and other legal persons authorised by the Commission through general regulations;
    • the stock exchange markets;
    • the brokerage houses;
    • the asset management companies;
    • external auditors;
    • clearing houses;
    • security depositories;
    • the risk-rating agencies; 
    • the securitisation companies;
    • those determined by other Laws or the Commission, as the case may be.

    It will only be possible to carry out a public offering of securities once the issuer and the securities are duly registered in the Securities Markets Registry.

    In Paraguay, the private offering of securities is not subject to Securities Market Law No. 5810/17, therefore said offering will be governed by the terms and conditions mutually agreed among the intervening parties.

  23. 12.

    Do your accounting standards differ in significant ways from other jurisdictions’ generally accepted accounting principles?

  24. The accounting standards that authorised issuers and regulated entities must adopt are established by CNV Resolution 5/92, and based on the International Accounting Standards (IAS/IFRS), approved by the International Accounting Standards Board of the International Federation of Accountants and the Paraguayan Accounts Associations standards. 

  25. 13.

    To the extent that the International Accounting Standards Committee’s International Financial Reporting Standards have not been fully implemented, is full convergence planned? What is the expected timetable?

  26. There is no timetable for full implementation. The Central Bank is reviewing a resolution to adopt the IAS/IFRS rules as mandatory for financial institutions in Paraguay.

  27. 14.

    Does your jurisdiction offer policy and tax incentives to invest in the capital markets?

  28. Yes. Fiscal and economic incentives have been introduced to promote and strengthen capital markets in Paraguay.

    The following cases are exempt from income tax:

    • Dividends and profits obtained as shareholders of a publicly traded company (SAECA in Paraguay).
    • The interests earned on securities issued by a publicly traded company.
    • Public debts and sovereign debts.
    • The profits obtained as capital gain in trade, placement or sale of securities issued by a publicly traded company.
    • The profits derived from the purchase, use as collateral or any other negotiation on the secondary market done with securities issued by a publicly traded company.
  29. 15.

    Please describe the applicable tax withholding regime, the customary exceptions and the commonly used standard tax-planning devices.

  30. Foreign entities without tax residence in Paraguay are subject to a withholding tax on their income of Paraguayan source. The effective tax rates vary according to the nature of the activity, from 3 per cent up to 30 per cent. Natural persons without tax residence in Paraguay are subject to a withholding tax on the income of the Paraguayan source. The effective tax rates varied according to the nature of the activities, from 6 per cent up to 15 per cent.

    There are special regulations on these subject matters. Exceptions are for profits, which are not subject to income tax, as set out in question 14.

  31. 16.

    Where and how are securities traded?

  32. The Stock Market is basically divided into two distinct markets, the primary market for issuance and placements and the secondary market for resale.

    In the primary market the operating mechanism is as follows: A party interested in placing securities into the public offering must first be registered as issuer with the National Securities Commission and should also register the securities which are going to be placed for trade. Usually the guidance and assistance of a stock house agent is convenient for the adequate fulfillment of all the requirements imposed by the regulations.

    Subsequently the same process is performed on the Stock Exchange. Once the securities to be traded are issued and registered, the trade starts through its brokerage firm. The negotiation of the securities is done in the Stock Exchange Market under the conditions and deadlines stated in the trade regulations. This segment of the trade in which new issues are made is called primary market.

    In the secondary market the operating mechanism is as follows: investors buy and sell securities that are already owned, requesting its brokerage house to book an offer to buy or sell on the Stock Exchange. An interested investor, through its brokerage firm, may purchase or sell the offered securities and the negotiation process is closed. In the stock trading market the development of a secondary market is very important since it provides a mechanism for selling or buying securities as on the spot investment or to generate cash or working capital if so required by any of the intervening parties.

    The Stock Exchange is where the trading takes place; is the physical establishment in which stock exchange operations are carried out. In this establishment suppliers and demanders of financing funds interact, negotiating public or private securities at predetermined prices. The negotiations are done on an electronic platform. There are very few operations stills negotiated in the traditional way.

    In Paraguay, stock exchanges are stock corporations having exclusively as stockholders to the exchange houses with the sole purpose of operating the Stock Market. Both, the exchange houses and the securities to be traded must be previously authorised by the Commission and the Paraguayan Stock Exchange.

  33. 17.

    Where and how do securities clear? Can securities denominated in a foreign currency clear?

  34. Securities are cleared daily via the banking system. Securities denominated in a foreign currency are accepted and can be also cleared through the same procedure.

    Asuncion Stock & Products Market SA (Bvpasa) has a payment and compensation system made through a designated Paying Bank: the Itaú Bank of Paraguay SA. Payments are made in both local currency and foreign currency, depending on the currency stated in the issued bond.

  35. 18.

    Please provide a general description of securities settlement systems in your jurisdiction.

  36. All securities negotiations must be settled within 48 hours of completion, through the deposit in the settlement account. Regarding maturities, issuers must deposit the receivables 48 hours before the due date.

    BVPASA has enabled custodian and sub-custodian accounts to the securities dealers and to institutional investors, banking and financial institutions, through which payments are made. 

  37. 19.

    What are the distinguishing characteristics of your debt and equity capital markets?

  38. The volume negotiated (December 2016) in BVPASA was approximately of US$591 million, of which 92 per cent were in local currency and 8 per cent in US dollars.

    Of this negotiation, approximately 95 per cent corresponds to fixed income and 5 per cent to variable income.

  39. 20.

    Where and how are derivatives traded?

  40. The derivatives market it is not yet enabled. It is currently undergoing for implementation. 

  41. 21.

    Can you explain development of structured finance instruments in your country?

  42. Structured financing instruments are still under development. Fiduciary agreements are the most similar type of transaction being used.

    Locally we have securities offering with asset-backed securitisations and collateralised debt. Mortgage backed securitisations we have only between banks and its clients. 

  43. 22.

    How are institutional investors defined and regulated?

  44. The legal framework governing capital markets in Paraguay does not contain a definition of institutional investors. However, per practice, a corporation with substantial amount of money available for investments is considered an institutional investor as well as the financial intermediation entities (ie, banks), insurance companies, pension funds and fund managers, among others.

  45. 23.

    Can foreign broker dealers offer and sell securities in the jurisdiction? To which investors and under what circumstances?

  46. No. Current regulations do not allow it. Only brokers duly authorised and registered with the CNV and the BVPASA can offer and sell securities in Paraguay.

  47. 24.

    What is the definition of ‘insider trading’,  and who enforces the insider trading law? Outline the major developments in insider trading law giving details of any recent cases.

  48. Inside trading information is the one if disclosed to the market before trading can substantially affect the value of the offered securities. It is also understood by privileged information that one that releases operations values ​​to be realised, of acquisition or alienation, by an institutional investor in the stock market.

    Inside information shall also mean information to purchase, sell and accept or reject specific offerings from an institutional investor in the stock market.

    With the approval of three-quarters of the directors in exercise certain information may be reserved particularly if they are related to certain facts or background that refer to negotiations still pending that if are released prematurely may be detrimental to the issuer. In the case of issuers not managed by a board or other collegiate body, the reserve decision must be made by all directors.

    Decisions and agreements shall be communicated to the Commission on the next business day upon adoption. In addition, the board will report continuously on the progress made in the negotiation, so that the Commission establishes the maximum time of the reservation in the information.

    The Law defines that the following have privileged information:

    • people linked to institutional investors and brokerage firms that operate with securities of the issuer;
    • people linked to the issuer;
    • the directors, officers, agents, consultants and advisers of the stock exchange;
    • the shareholders and administrators of the external auditors of the issuer;
    • the shareholders, administrators and members of the rating committees of the risk rating companies, who rate securities of the issuer or the latter;
    • the dependents who work under the direction or direct supervision of the directors or administrators of the issuer or the institutional investor;
    • persons who provide permanent or temporary advisory services to the issuer;
    • public officials dependent on the institutions that monitor issuers of public offering securities or endowment funds authorised by law; and
    • the spouses or relatives up to the second degree of consanguinity or affinity, of the persons indicated in the preceding paragraphs. 

    The CNV is the entity in charge of enforcing the law on privileged information and may apply sanctions.

  49. 25.

    What are the roles of the authorities when a foreign issuer makes a public offering? Who has jurisdiction over the public offering?

  50. Legal entities incorporated abroad that intend to make public offer of securities in the country, shall be subject to the provisions of this law and other normative provisions of the stock market.

    In any case, the authorisation of the Commission shall be subject to reciprocal treatment by the foreign country in relation to national values ​​or, in the opinion of the Commission, to the interests of the country.

    However, any foreign securities issued in the country that come from companies that are members of the Treaty of Asunción (MERCOSUR) or from countries that are associated with such a treaty, will be governed by the guidelines or rules established by the protocols Subscribed by member countries.

    Such emissions shall be recorded in the Register and shall be subject to the information regime applicable to local issuers.

  51. 26.

    Is there a formal understanding with other jurisdictions to share information and provide reciprocal assistance in enforcement matters? If so, which jurisdictions?

  52. No. There is no formal understanding with other jurisdictions for the sharing or exchange of information in enforcement matters.

  53. 27.

    Describe the framework for corporate governance.

  54. Paraguay is part of the OECD, with 30 member countries from all over the world, including some European, the United States, Canada, Mexico, Australia, Korea and others.

    This organisation provides governments with an environment in which to discuss, develop and improve economic and social policies, comparing experiences, seeking answers to common problems, and working to coordinate domestic and international policies that increasingly form a seamless interweaving of national practices. The general principles that should be collected by the regulation of the societal law of economies in transition is a clear example of their efforts. As well as issues related to stock market regulation, among which are the principles of “corporate governance” related to the good management of the executive bodies of publicly traded companies.

  55. 28.

    Which governing bodies must public companies adopt and what are their main functions and duties?

  56. Publicly traded companies (SAECA) shall be governed by a board of directors, consisting of a fixed and odd number of at least three members appointed by the general shareholders’ meeting. The ordinary shareholders meeting may appoint the external auditors to examine the accounts, the inventory, the balance sheet and other financial statements.

    If the company only issues bonds and not stocks, it can adopt the form of SAE (sociedad anónima emisora – stock company) or SE (sociedad emisora – limited liability company).

  57. 29.

    Are there any laws governing capital markets that are unique to your jurisdiction?

  58. No. The legal framework governing capital markets in Paraguay is in line with other international jurisdictions’ regulations.

  59. 30.

    How do authorities and issuers resolve matters that are not expressly provided for in the securities laws and regulations?

  60. Pursuant to Law No. 5810/17, stock market practices shall be applied in addition to the laws and resolutions governing the securities market.

  61. 31.

    Which types of companies may make public offerings in your jurisdiction?

  62. The companies can adopt any type of organisation (Corporation, Limited Liability Company and others). It depends if the company will issue stocks and bonds, or only bonds.

    Any public offering of securities requires prior authorisation of the National Securities Commission (CNV).

  63. 32.

    Which economic activities or segments are the most active in the capital markets in your jurisdiction?

  64. The most active segments of our economy in capital markets are the commercial and the banking sector (subordinated bonds).

  65. 33.

    Describe the main stock exchanges and OTC networks.

  66. The Stock Exchange of Asuncion (BVPASA) is the main stock market of Paraguay, where the companies are listed.

    Regarding OTC networks, there are some operations, mainly negotiations of CDA (bank fixed-term deposit) and agricultural products, between private companies and investors. 

  67. 34.

    Describe recent initiatives undertaken by the government to improve the regulation and efficiency of its capital markets and, if applicable, to incentivise or facilitate companies’ access to the capital markets.

  68. The enactment of the abovementioned new Law No. 5810/17 represents one of the recent initiatives undertaken by the government to further develop the regulation and improve the efficiency of its capital markets. This includes the support of the World Bank for the development of the stock exchange to have a futures and derivatives market.

  69. 35.

    Describe the main obstacles that a company may confront in your jurisdiction when it is trying to become public. Describe any reform that you feel should be a national priority to improve capital raising by companies.

  70. Most companies are familiar-type governed corporations, therefore lacking sufficient formality to operate in a regulated market. If multinational or large enterprises require long-term financing they have easy access to facilities for obtaining long-term financing from local, international and multilateral financial institutions.

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Questions

  1. 1.

    Which laws, regulations and administrative rulings govern the offering and trading of securities and how are they proposed, adopted and amended?


  2. 2.

    What is the rationale behind this legislation?


  3. 3.

    Which regulatory authorities oversee capital markets and what is the scope of their jurisdiction?


  4. 4.

    How is financial fraud and price manipulation in capital markets regulated?


  5. 5.

    What sanctions and remedies can the regulatory authorities impose?


  6. 6.

    What are the private remedies an investor may pursue?


  7. 7.

    Give details of the frequency and nature of enforcement actions or private actions. Describe whistle-blower protection and incentives under the regulations.


  8. 8.

    What is the legal definition of a ‘security’ and which types of securities are commonly traded?


  9. 9.

    How are securities offered and sold to the public?


  10. 10.

    What are the disclosure requirements for securities issuers for both public and private offerings?


  11. 11.

    Are there exemptions from securities registration?


  12. 12.

    Do your accounting standards differ in significant ways from other jurisdictions’ generally accepted accounting principles?


  13. 13.

    To the extent that the International Accounting Standards Committee’s International Financial Reporting Standards have not been fully implemented, is full convergence planned? What is the expected timetable?


  14. 14.

    Does your jurisdiction offer policy and tax incentives to invest in the capital markets?


  15. 15.

    Please describe the applicable tax withholding regime, the customary exceptions and the commonly used standard tax-planning devices.


  16. 16.

    Where and how are securities traded?


  17. 17.

    Where and how do securities clear? Can securities denominated in a foreign currency clear?


  18. 18.

    Please provide a general description of securities settlement systems in your jurisdiction.


  19. 19.

    What are the distinguishing characteristics of your debt and equity capital markets?


  20. 20.

    Where and how are derivatives traded?


  21. 21.

    Can you explain development of structured finance instruments in your country?


  22. 22.

    How are institutional investors defined and regulated?


  23. 23.

    Can foreign broker dealers offer and sell securities in the jurisdiction? To which investors and under what circumstances?


  24. 24.

    What is the definition of ‘insider trading’,  and who enforces the insider trading law? Outline the major developments in insider trading law giving details of any recent cases.


  25. 25.

    What are the roles of the authorities when a foreign issuer makes a public offering? Who has jurisdiction over the public offering?


  26. 26.

    Is there a formal understanding with other jurisdictions to share information and provide reciprocal assistance in enforcement matters? If so, which jurisdictions?


  27. 27.

    Describe the framework for corporate governance.


  28. 28.

    Which governing bodies must public companies adopt and what are their main functions and duties?


  29. 29.

    Are there any laws governing capital markets that are unique to your jurisdiction?


  30. 30.

    How do authorities and issuers resolve matters that are not expressly provided for in the securities laws and regulations?


  31. 31.

    Which types of companies may make public offerings in your jurisdiction?


  32. 32.

    Which economic activities or segments are the most active in the capital markets in your jurisdiction?


  33. 33.

    Describe the main stock exchanges and OTC networks.


  34. 34.

    Describe recent initiatives undertaken by the government to improve the regulation and efficiency of its capital markets and, if applicable, to incentivise or facilitate companies’ access to the capital markets.


  35. 35.

    Describe the main obstacles that a company may confront in your jurisdiction when it is trying to become public. Describe any reform that you feel should be a national priority to improve capital raising by companies.


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