Draft bill 96.

Summary.

The draft bill proposes a framework for crowdfunding in the Republic of Panama that would apply to platforms, project promoters, investors, and other participants. It would require platforms to act neutrally and diligently, operate transparently, and provide clear information to their clients, a category that includes both promoters and investors. It defines the agreement, offering, project, risks, and participation, equity, lending, and donation models (Arts. 1-4).

To operate, platforms would have to obtain authorization, incorporate and register with the Public Registry of Panama (Registro Público de Panamá), and apply for registration in the public register of the Securities Market Superintendency (Superintendencia de Mercado de Valores). Registration would follow a technical, financial, and operational review. The draft bill requires paid-in share capital of at least 50,000 balboas (B/.50,000.00), professional liability coverage or an equivalent guarantee, and additional own funds based on the amount financed. The Securities Market Superintendency of Panama could require an action plan in the event of noncompliance with financial requirements. The draft bill also sets requirements concerning domicile, organization, directors’ experience, and the absence of certain criminal convictions (Arts. 5-7).

Platforms would have to verify projects and applicants, disclose risks, protect systems and personal data, comply with consumer protection and anti-money laundering and counterterrorist financing provisions, report suspicious activities, and retain records for 5 years. Their websites would publish selection criteria, risks, fees, and operating conditions. The draft bill establishes conflict-of-interest policies and prohibits personalized recommendations. It defines core and ancillary services, the execution of agreements on behalf of investors, and restricted activities, including discretionary investment management, certain order-related and custody services, and the raising of funds without authorization (Arts. 8-14).

An authorization application would include corporate documents and information on services, resources, significant shareholders, directors, complaints, and the flow of funds. Certain changes to corporate structure, control, and fund transfers would require authorization. The Securities Market Superintendency could revoke or suspend authorizations in specified circumstances and would validate voluntary surrenders; revocations would be recorded in the Public Registry of Panama (Arts. 15-17). Platforms would verify promoters’ identities and eligibility. Promoters would have to meet incorporation or residency requirements and limits on simultaneous projects and fundraising. Each project would have a target and a deadline; the draft bill governs possible extensions, the return of contributions, and funding when at least 90% of the target is reached. The platform would keep information accessible and current; promoters would publish periodic reports on progress and the use of funds, and investors could ask questions (Arts. 18-23).

The draft bill distinguishes accredited from non-accredited investors. Non-accredited investors would be limited to 5,000 balboas (B/.5,000.00) per project and 10,000 balboas (B/.10,000.00) over 12 months. Platforms would record investments, provide alerts, disclose the limits, and document statements acknowledging risks and giving consent (Arts. 24-28). The Securities Market Superintendency would supervise and inspect operations and receive audited financial statements and annual reports. Violations are classified as very serious, serious, or minor, with fines, suspension or revocation of authorizations, and disqualifications as applicable (Arts. 29-34).

Art. 35 proposes adding a registration exemption for crowdfunding within the applicable legal and regulatory parameters to Article 129 of the Consolidated Text of Decree Law 1 of 1999. The Executive Branch (Órgano Ejecutivo) would issue regulations under the law within 6 months of its promulgation, and the law would enter into force the day after its promulgation (Arts. 36-37). Given its subject matter, the proposal relates to the Securities Market Superintendency, the Public Registry of Panama, and the Executive Branch, and could be of interest to digital platforms, businesses seeking capital, investors, and payment service providers.