Public Offering of Securities in Foreign Currency Issued by the Private Sector, Domestic or Foreign

The National Securities Superintendency (the Superintendency), has published the rules regulating the trading of securities in foreign currency issued by private companies, domestic or foreign, in Directive No. 030 (the Directive) published in Official Gazette No. 41,877 dated May 12, 2020. The Directive list the types of securities that may be traded as follows: debentures, commercial papers, equity securities and debenture stock traded on regulated markets and offered to the public. In addition, at the request of interested parties, the Superintendency may also issue general or specific authorizations for other securities, financial certificates, contracts for agricultural products or inputs, or other types of papers(securities).

Anyone wishing to offer securities denominated in a foreign currency to the public must begin by applying for authorization from the Superintendency and recording the Securities in the National Securities Register as provided for in the rules and regulations governing the securities market. Custody of the securities will be recorded in the buyer’s account; they will be irreversible and irrevocable and be kept by a depository or other institution authorized for the purpose.  

The trades may be in the local or a foreign currency. The market value of the securities in question to be used when applying the exchange rate for each transaction is to be the market value in Venezuela or the value agreed upon by the parties in those cases when there is no market value as a reference.

The Directive stipulates the requirements and terms to be met by issuers of securities, both domiciled in the country or abroad. Furthermore, the Directive provides that brokerage services must be provided by brokerage firms, brokers and stock exchanges authorized by the Superintendency, and that the latter will also determine the commissions, fees or surcharges charged by the later for their services. 

Settlement of balances due following the trading of the securities is to be handled as follows: in local currency, using the weighted average exchange rate published by the Central Bank of Venezuela on its web page; and, in foreign currency, by depositing the amount in foreign-currency accounts kept at institutions that are part of the domestic financial system.

Lastly, the Directive allows for a term of 30 calendar days, following the date of publication, for brokerage firms, brokers and stock exchanges to adapt to these provisions; at the end of that term, the Superintendency will publish another Directive listing those who have met the requirements. 

Lubin Chacón García

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