Various aspects of fund management, netting of operations, and securities issues are modified

On September 14, the Decree 1235 of 2020 was issued, modifying the rules applicable to the Stock Brokers’ guarantee funds that serve as collateral for the operations that these entities celebrate on behalf of their clients. Among the most significant changes we highlight:

1. No longer the operations authorized to these funds are limited in the regulation, but they will depend entirely on the policies established by its Board of Directors.
2. Said authorized operations must be reflected in the fund regulations to be approved by the Financial Superintendence.

Additionally, the Decree modified several aspects of financial regulation with respect to central counterparty risk chambers summarized here:

• It is now possible for financial entities to grant collaterals on operations carried out through central counterparty risk chambers, including those realized by the funds that some of these entities manage (pension funds, stockbrokers, trust companies, etc.).
• Financial institutions that manage funds, trusts, or third parties’ portfolios, may act as clearing or non-clearing members of central counterparty risk chambers on behalf of said entities.

On the other hand, the Decree includes additional operating conditions and of the delivery of information for Collaborative Financing Companies, authorizing them to carry out certain additional operations. The increase in the amount of resources that can be contributed in a collaborative financing operation stands out (it goes from 10,000 to 58,000 SMMLV).

Finally, the regulation extended the term for carrying out public offerings that are part of a securities issuance program from 3 to 5 years, included additional duties for the representatives of bondholders, and defined the corporate governance conditions that the “simplified shares companies” (SAS) must comply to issue securities in the Second Market.

In general, these modifications seek to facilitate the negotiation of securities in the Colombian market, becoming a possible business opportunity for your company as an issuer or acquirer of them.