Updates On Trust Regulations In Panama

Author:Arias Law
Profession:Arias Law

Law 21 of May 10th, 2017 establishes dispositions for the regulation and supervision of trustees and the trust business and issues other provisions that modify articles of the Fiscal Code, Law 47 of 2013 which adopts a custodial regime for bearer shares and Law 23 of 2015 on prevention of money laundering and regulation of non-financial obliged parties. This Law confers exclusive competence to the Superintendence of Banks to: (i) regulate and supervise trustees holding licenses or those authorized by law to exercise the trust business and; (ii) to ensure the proper functioning of trust business.

What should you know about the abovementioned Law?

They are listed as activities authorized to be carried by the trustees: Set up and managing trusts in accordance with what is established by the aforementioned Law. Manage bank accounts and escrow accounts. Provide financial consulting services. Act as a representative with the right to vote at Shareholders or Partners meetings and act as representatives of bondholders and other securities. Participate or intermediate in the constitution and/or administration of corporate, trustees and foundational structures. Acting as custodians of shares, documents and securities. Exercise any other activity related to the trustee activity authorized by the superintendent in a general or individual way. Trustees must keep separate accounting for each trust fund and submit audited financial statements of all trusts under their responsibility within three months of the end of the fiscal year. Trustee bankruptcy is established as inadmissible. Trustees are prohibited from performing operations, acts, and contracts with the assets of the trust for the benefit of the trustee, their officers, directors, shareholders, employees, external auditors or companies linked to the same economic group. Likewise, the trustees may not include clauses in which they are appointed directly or indirectly as the beneficiary. Trusts will have effects against third parties from the moment in which the signatures of the trustor and the trustee or the proxy of these have been...

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