Country Manual Private Banking
Panama – Update 2024
BRP has updated its Country Manual Private Banking for Panama out of Bank’s Country of Establishment (DEF, RS, BT & RT)
| Source of changes | Answers |
|---|---|
| Law / Regulation | No |
| New Position of the Authorities | No |
| Evolution of Expert’s Interpretation | Yes |
Regulatory Template, Regulatory Summary and Behaviour Template
Material changes
We have reviewed the documents following consultations with our local counsel. We can confirm that there have been no relevant regulatory changes since the last publication of this Country Manual applicable to financial activities of a foreign bank’s representative in or towards Panama.
Notwithstanding the foregoing, the country manual has been updated to reflect the evolution of the expert’s interpretation of the regulatory framework in Panama regarding the rules applicable to a foreign bank’s cooperation with Panamanian third parties (finder, business introducers and EAMs). To highlight in this regard is the following:
The Country Manual now shows a laxer approach concerning the possibility to delegate KYC and contract related activities to locally licensed third parties (namely Investment Advisors or Broker-dealer firms) with whom the foreign Bank has entered into a cooperation agreement for the third party to refer clients to the foreign Bank to open investment/custody accounts and to buy or sell securities and other financial instruments located and operated outside of Panama.
As already reflected in the country manual, to note is that Investment Advisors and Broker-dealer firms must include referral/introducer activities in their business plans filed with the SCM and disclose/file referral/introducer/correspondent agreements with the SCM.
Provision of documentation related to the Bank’s custodian and brokerage services for the attention of clients to third parties is also permitted in these cases.
Provision of investment research or financial analysis and recommendation lists for the attention of clients will depend on the third party’s license and the type of agreement entered with the Bank (again, disclosed/filed with the SCM).
A cooperation for referral activities by unlicensed third parties or for the undertaking of activities that exceed the scope of permissible activities under the third parties’ respective licenses or that extend to services other than the Bank’s custody/investment accounts and related brokerage services, are (still) not allowed/recommended as they carry the risk of being seen as promotional activities to access the Panamanian market (or other regulated activities) on behalf of the foreign Bank in absence of a license requirement and the third party being seen as a representative/de facto permanent establishment of the Bank in Panama.
The Regulatory Template now also has a broader coverage of activities allowed for the representative office established by the foreign Bank in Panama.
Non-material changes
Several comments have been slightly reworded (without introducing material changes) to reflect the regulatory situation/current interpretation of the regulatory framework more accurately.
Regulatory Summary
This document has now a more user-friendly layout and reflects the changes contained in the RT.
BT Short Comparison
BRP has created a comparison document allowing users to quickly identify the modifications made compared to the previous version of the PB Manual (BT Short Comparison). The BT Short Comparison can be found on BRP’s platform (mybrponline) in the Search tab by entering in the Document Field “CM PB BT SHORT COMP” and “PANAMA” in the Target Country Field.
The BT Short Comparison should be read as follows:
The first column contains a short description of the activity in question. The second column contains the answers of the previous version of the Country Manual (online until the day of the alert). The third column contains the new answers of the most recent version of the Country Manual. Only the modified answers are displayed (in color). If the answers in the new version are unchanged compared to the previous version, they are shaded in grey.
For more information, please contact us: info@brpsa.com
Geneva, October 29th, 2024