y Law 47 of August 6, 2013, the Republic of Panama officially amended the regimen applicable to bearer shares issued by corporations. The new regime is one whereby bearer shares are immobilized. Thus, bearer shares have not been eliminated, nor have they been prohibited in any way. The new regime means that any bearer share certificates must be deposited into custody of an authorized custodian.
Entry Into Force of Law 47
First, Law 47 of 2013 shall enter into force on August 6, 2015. This means that before that date, there is no change.
But starting from August 6, 2015, every owner of shares represented by a certificate issued to bearer, whose date of issue is equal or after August 6, 2015, must designate an authorized custodian and deposit said certificates with that custodian.
Grace Period for Certificates Issued Before August 6, 2015.
With regards any bearer share certificates issued before the date of entry into force of Law 47 (August 6, 2015), its owner will have a grace period of three (3) years to be counted from the above mentioned date, to comply with the obligation to appoint an authorized custodian and deposit the certificates with said custodian.
Who Can Be Appointed As Custodian?
The following entities or persons may act as authorized custodians:
- Banks with general license established in Panama;
- Trust companies operating in Panama and licensed by the Panama Banking Superintendency;
- Brokerage houses operating in Panama and licensed by the Superintendency of the Securities Market of Panama;
- Clearing Houses operating in Panama and licensed by the Superintendency of the Securities Market of Panama;
- Attorneys at Law registered before the Fourth Bench of General Matters of the Supreme Court of Justice of Panama, in a registry that the Fourth Bench will establish to that effect.
In addition, foreign banks, trust companies and financial intermediaries licensed in jurisdictions that are members of the Financial Action Task Force on Money Laundering (FATF) or its associated members that are registered before the Panama Banking Superintendency, in a registry that will be open and kept for that effect.
What information must be provided to the authorized custodian? What will happen to bearer share certificates that do not comply with Law 47? What hereditary regime will apply to bearer share certificates in custody? The answers to these and other very important questions you will find in Part II of this Article.