Bill 487.

Summary.

The bill proposes a framework for those who regularly provide financial services through digital technologies in the Republic of Panama. It covers payments and digital wallets, crowdfunding, digital banking, digital assets, investment, insurance, compliance tools, and digital financing for micro, small, and medium-sized enterprises. It sets out principles of technological neutrality, proportionality, financial inclusion, consumer protection, and transparency. It draws on practices of the Organisation for Economic Co-operation and Development (Organización para la Cooperación y el Desarrollo Económicos), the Financial Action Task Force (Grupo de Acción Financiera Internacional), and the European Union (Unión Europea), and defines the principal models, instruments, and users covered by the framework.

It creates a special framework administered by the Superintendency of Banks of Panama (Superintendencia de Bancos de Panamá), in coordination with the Securities Market Superintendency (Superintendencia del Mercado de Valores), the Superintendency of Insurance and Reinsurance (Superintendencia de Seguros y Reaseguros), the Superintendency of Non-Financial Entities (Superintendencia de Sujetos No Financieros), and the Financial Analysis Unit (Unidad de Análisis Financiero). It also creates the Interinstitutional Fintech Council of Panama (Consejo Interinstitucional Fintech de Panamá), with public, private, and academic participation. The Council would make policy and regulatory recommendations, coordinate the testing environment, promote education and international cooperation, monitor statistics, and report to the National Assembly (Asamblea Nacional) and the Executive Branch (Órgano Ejecutivo). It would meet at least once each quarter, adopt its internal rules within 90 days of its establishment, and publish an annual report.

It establishes a public register administered by the Superintendency of Banks of Panama and requires prior registration and licensing to provide Fintech services. It provides for licenses based on the activity and a simplified license for micro and small enterprises, with reduced requirements, an initial term of 3 years, and the possibility of conversion to an ordinary license. Applications would include a business plan, identification of beneficial owners under Law 129 of 2020, anti-money-laundering policies, information security measures, and proof of proportionate capital. Licensed companies would submit reports and maintain cybersecurity measures, operational continuity arrangements, dispute resolution procedures, and accessible contractual information.

It creates a supervised testing environment for innovative projects. To enter, companies would submit a testing plan, consumer protection measures, proof of technological viability, identification of beneficial owners, and evidence of minimum financial soundness. Testing would last up to 24 months, with a single extension of up to 12 additional months and possible limits on users and transactions. Participants would report quarterly; the authority could suspend testing in the event of significant risks. At the end, they would apply for a license or submit a closing report. Incentives and assistance for participants are contemplated.

It recognizes rights to information, data protection under Law 81 of 2019 on Personal Data Protection, digital security, dispute resolution, and financial education. It requires customer service, immediate notice of incidents, fraud prevention and reporting, certifications, audits, and annual digital trust reports. It makes companies liable for harm caused by security failures or noncompliance and provides for reimbursement when fraud results from vulnerabilities attributable to them. For state digital financial platforms, it requires approved and registered contracts and publication of their terms, responsible parties, and costs; it classifies noncompliance as a very serious violation.

It provides incentives for certain companies and creates the National Financial Innovation Fund (Fondo Nacional de Innovación Financiera), administered by the Ministry of Economy and Finance (Ministerio de Economía y Finanzas) and supervised by the Office of the Comptroller General of the Republic (Contraloría General de la República). It provides for education and inclusion programs and international promotion of Panama. It directs the Executive Branch to issue regulations under the law within 6 months of its promulgation, provides for technical rules by the authorities, and requires the Council to conduct an evaluation every 2 years. The proposed entry into force would be 30 days after promulgation in the Official Gazette (Gaceta Oficial). The content may be of interest to banks, insurers, investment platforms, technology companies, entrepreneurs, financial service users, and academic institutions; it also involves the Ministry of Education (Ministerio de Educación), the National Authority for Government Innovation (Autoridad Nacional para la Innovación Gubernamental), and the Ministry of Foreign Affairs (Ministerio de Relaciones Exteriores).