Latin American Capital Markets
Anne Stetson, Antonia Stolper, and Joseph C. Hill
Price: $125.00 915 pages. 1 Looseleaf Volume. Appendices. Updated annually or when needed.
ISBN-13: 978-1-57823-065-5 / ISBN-10: 1-57823-065-9
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CHAPTER 1
Argentina
I. REGULATORY FRAMEWORK OF LOCAL SECURITIES MARKETS
A. Relevant Laws Affecting the Securities Markets
1. Securities Law
2. Argentine Corporations Law
3. Foreign Investment Law
B. Local Supervisory Authorities
1. The CNV
2. Self-Regulation
3. Other Government Supervisory Entities
C. The Local Securities Market
1. The Stock Exchanges
a. Organization
b. Types of Securities Traded in the MerVal
c. Trading
2. The Over-the-Counter Market (AOTC@)
3. Clearance and Settlement
D. International Cooperation
1. Multilateral Agreements
2. International Organizations and Negotiations
3. Bilateral Cooperation Agreements
II. INVESTOR PROTECTION REGULATIONS: LAW AND PRACTICE
A. Disclosure Regulations
B. Registration Process
C. Market Transparency Regulations
1. Market Manipulation
2. Insider Trading
3. Availability of Real-Time Trading Information
D. Shareholders Rights
1. Appraisal Rights
2. Classified Voting Rights
3. Preemptive Rights
4. Proxy Rules
5. Defenses Available Against Hostile Takeovers
6. Right of Access to Information
7. Supervision Rights
8. Limit on the Company’s Ability to Pay Dividends
9. Enforceability of Foreign Judgments
10. Indemnity
E. Enforcement Measures
1. Enforcement by the Securities Authority
2. Civil Remedies
a. Source and Nature of Claims
b. Remedies
i. Violation of Registration and Prospectus Requirements
ii. Misstatement or Omission in Sale of Securities
(a) Registration Statement
(b) Prospectus or Oral Communication
Fraud in Offer, Sale or Purchase
Price Manipulation
(e) Documents Filed Under Securities Law
iii. Market and Price Manipulation
(a) Trading by Participants in a Distribution
(b) Solicitation
(c) Touting
(d) Wash Sales and Matched Orders
(e) Purchase During Tender Offer or Exchange Offer
(f) Stabilizing
3. Insider Trading
4. Fraudulent Brokerage Activities and Handling of Brokerage Accounts
a. Excessive or Unfair Profits or Commission
b. Operating While Insolvent or Not in Sound Financial Condition
c. Violation of Rules and Regulations of Self-Regulating Organizations
and Brokerage Firms
d. Violation of Margin Regulations
e. ABoiler Room@ Operations
f. Mismanagement of Customers Accounts; Conversion
5. Short-Swing Profits
6. Proxy and Tender Offer Regulations
7. Measure of Damages
8. Class Actions
9. Derivative Actions
10. Waiver of Rights
11. Implied Actions
III. CONCLUSIONS AND RECOMMENDATIONS
IV. BIBLIOGRAPHY
Appendix 1 Ley 17.811, Comision Nacioal de Valores1:App.1
CHAPTER 2
Brazil
I. REGULATORY FRAMEWORK OF LOCAL SECURITIES MARKETS
A. Relevant Laws Affecting the Securities Markets
1. Securities Law and the Corporations Law
2. Foreign Investment Law
a. General
b. Foreign Investments in the Brazilian Stock Market Through DR Programs
3. Access to the Brazilian Market by Foreign Companies Through BDR Programs
a. Sponsored Programs
i. Level I (Restricted Distribution, Limited Disclosure)
ii. Level II (OTC/Stock Exchange Distribution, Moderate to
Extensive Disclosure)
iii. Level III (Public Offering, OTC/Stock Exchange Distribution,
Extensive Disclosure)
b. Unsponsored Programs
c. Registration of the Program
B. Local Supervisory Authorities
1. The CVM
2. Self-Regulation
3. Other Government Supervisory Entities
C. The Local Securities Markets
1. The Stock Exchanges
a. Organization
b. Types of Securities Traded
c. Trading
2. The Over-the-Counter Market (AOTC@)
3. The Organized Over-the-Counter Market
4. Clearance and Settlement
D. International Cooperation
1. Multilateral Agreements
2. Involvement with International Organizations and Negotiations
3. Bilateral Cooperation Agreements
E. General Overview of Brazilian Corporate Structures
1. Legal Issues
a. Limitada
b. Sociedade Anônima
2. Corporate Gevernance
a. Limitada
b. Sociedade Anônima
3. Limited Liability
a. Limitada
b. Sociedade Anônima
c. Common Liability
4. Fianacing
a. Limitada
b. Sociedade Anônima
c. Common Aspects
5. Tax Issues
a. Common Aspects
6. Management
a. Limitada
b. Sociedade Anônima
II. INVESTOR PROTECTION REGULATIONS: LAW AND PRACTICE
A. Disclosure Regulations
B. Registration Process
1. Requirements for a Company to Become Publicly Listed
2. Requirements for a Public Offering
a. General
b. Preemptive Rights
c. Filing Requirements
d. Review and Approval of Public Offerings by the CVM
C. Market Transparency Regulations
1. Market Manipulation
2. Insider Trading
3. Availability of Real-Time Trading Information
4. Transaction in a Companys Own Stock
D. Shareholders Rights
1. Appraisal Rights
2. Classified Voting Rights
3. Preemptive Rights
4. Proxy Rules
5. Defenses Available Against Hostile Takeovers
6. Enforceablity of Foreign Judgments
7. Indemnity
E. Enforcement Measures
1. Enforcement by Authorities
Civil Remedies
Source and Nature of Claims
Remedies for Violations of Registration and Prospectus Requirements;
Misstatements or Omissions in the Sale of Securities;
(iii) Market and Price Manipulation
c. Insider Trading
d. Fraudulent Brokerage Activities and Handling of Brokerage Accounts
i. Excessive or Unfair Profits or Commission
ii. Operating While Insolvent or Not in sound Financial Condition
iii. Mismanagement of Customers Accounts: Conversion
e. Class Actions
f. Waiver of Rights
g. Implied Actions
h. Procedural Requirements
i. Jurisdiction
ii. Venue
iii. Personal Jurisdiction
iv. Statute of Limitations on Actions and When It Begins to Run
III. CONCLUSIONS AND RECOMMENDATIONS
Appendix 1 Law 7,913 of 12.07.89
Appendix 2 Law 6,385 of 12.07.76
Appendix 3 Law 6,404 of 12.15.76
Appendix 4 Law 9,457 of 05.05.97
Appendix 5 Law 4,595 of 12.31.64 -the Banking Reform Law
Appendix 6 Resolution Nr. 1,289 of 03.20.87
Appendix 7 Instruction CVM Nr. 13 of 09.30.80
Appendix 8 Instruction CVM Nr. 255 of 11.05.96
Appendix 9 Instruction CVM Nr. 243 of 03.01.96
Appendix 10 Instruction CVM Nr. 08 of 10.08.79
Appendix 11 Instruction CVM Nr. 202 of 12.06.93
Appendix 12 Instruction CVM Nr. 238 of 10.11.95
Appendix 13 Resolution Nr. 702 of 08.26.81
Appendix 14 Deliberation CVM Nr. 233 of 12.02.97
Appendix 15 Resolution Nr. 401 of 12.22.76
Appendix 16 Resolution Nr. 1,120 of 04.04.86
CHAPTER 3
Chile
I. REGULATORY FRAMEWORK OF LOCAL SECURITIES MARKETS
A. Relevant Laws Affecting the Securities Market
1. The Securities Law
a. Public Offering
b. Regulations Brokers and Dealers
c. Offering of Foreign Securities in Chile
2. The Corporations Law
3. Foreign Investment Laws
a. General
b. Exchange Controls
c. Foreign Investment Funds
d. Placement Abroad of Equity and Debt Securities
i. Placement Abroad of ADRs
ii. Placement Abroad of Bonds and Convertible Bonds
e. Taxation of Foreign Shareholders and Bondholders
B. Local Supervisory Authorities
1. The SVS
2. Self-Regulation
C. The Local Securities Markets
1. Stock Exchanges
a. Organization
i. The Santiago Stock Exchange
ii. The Valparaíso Stock Exchange
iii. The Electronic Stock Exchange
b. Stockbrokers
c. Types of Securities Traded on the Stock Exchanges
d. Trading on the Exchanges
i. Trading on the Santiago Stock Exchange
2. The Electronic Stock Exchange
a. Organization
b. Trading on the ESE
3. Clearance and Settlement
D. International Cooperation
II. INVESTOR PROTECTION REGULATIONS: LAW AND PRACTICE
A. Disclosure Regulations
B. The Registration Process
C. Market Transparency Regulations
1. Market Manipulation
2. Insider Trading
D. Shareholders Rights
1. Appraisal Rights
2. Preemptive Rights
3. Proxy Rules
4. Defenses Available Against Hostile Takeovers
5. Related Party Transactions
6. Enforceability of Foreign Judgments in Chile
E. Enforcement Measures
1. Enforcement by the Securities Authorities and Criminal Courts
2. Civil Remedies
III. CONCLUSIONS AND RECOMMENDATIONS
CHAPTER 4
Colombia
I. REGULATORY FRAMEWORK OF LOCAL SECURITIES MARKETS
A. Relevant Laws Affecting the Securities Markets
1. Securities Laws
2. Corporation Law and Other Relevant Statutes
3. Foreign Investment Law
B. Local Supervisory Authorities
1. The Superintendency of Securities
2. Self-Regulation by the Stock Exchanges
C. The Local Securities Markets
1. The Stock Exchanges
a. Organization
b. The Broker/Dealers
c. Types of Securities Traded on the Stock Exchanges
d. Trading
2. The Over-the-Counter Markets (AOTC)
3. Clearance and Settlement
D. International Cooperation
II. INVESTOR PROTECTION REGULATIONS
A. Disclosure Regulations
B. Registration Process
C. Market Transparency Regulations
1. Market Manipulation
2. Insider Trading
D. Shareholders Rights
E. Enforcement Measures
1. Enforcement by Securities Authorities
2. Civil Remedies
III. CONCLUSIONS AND RECOMMENDATIONS
CHAPTER 5
Mexico
I. REGULATORY FRAMEWORK OF LOCAL SECURITIES MARKET
A. Relevant Laws Affecting the Securities Market
1. Securities Market Law and National Banking and Securities Commission Law
2. Other Laws
3. Foreign Investment Law
B. Local Supervisory Authorities and Self-Regulatory Organizations
1. The CNBV
2. Other Government Supervisory Entities
3. Self-Regulation
C. The Local Securities Markets
1. The Stock Exchange
a. Organization
b. Types of Securities Traded on the Mexican Stock Exchange
c. Trading
2. Over-the-Counter Markets
3. Clearance and Settlement
D. International Cooperation
1. Multilateral Agreements
2. International Organizations and Negotiations
3. Bilateral Cooperation Agreements
II. INVESTOR PROTECTION REGULATIONS: LAW AND PRACTICE
A. Disclosure Regulations
B. Registration Process
C. Market Transparency Regulations
1. Market Manipulation
2. Insider Trading
3. Availability of Real-Time Trading Information
D. Shareholders Rights
1. Appraisal Rights
2. Classified Voting Rights
3. Preemptive Rights
4. Proxy Rules
5. Defenses Against Takeovers
6. Enforceability of Foreign Judgments
7. Indemnity
E. Enforcement Measures
1. Enforcement by Securities Authorities
2. Civil Remedies
a. Source and Nature of Claims
b. Remedies
i. Deceit/Bad Faith
ii. Insider Trading
iii. Class Actions
iv. Derivative Actions
v. Waiver of Rights
vi. Implied Actions
vii. Procedural Requirements
(a) Jurisdiction
(b) Venue
Statute of Limitations on Action and When It Begins to Run
III. CONCLUSIONS AND RECOMMENDATIONS5-21
IV. BILBIOGRAPHY5-22
Appendix 1 Ley General de Sociedades Mercantiles (General Commercial Entities Law)
Appendix 2 Ley de Inversi\n Extranjera y su Reglamento (Foreign Investment Law and its
Reglament
Appendix 3 Ley del Mercado de Valores (Securities Law)
Appendix 4 Ley de la Comisi\n Nacional Bancaria y de Volores
(National Banking and Securities Commission Law
Appendix 5 Ley de Sociedades de Inversi\n (Foreign Investment
Corporations Law)
Appendix 6 Circular 122
Appendix 7 Circular 114
Appendix 8 Circular 111
CHAPTER 6
Peru
Reserved
CHAPTER 7
Uruguay
I. REGULATORY FRAMEWORK OF LOCAL SECURITIES MARKETS
A. Relevant Laws Affecting the Securities Markets
1. Securities Laws
2. Corporations Laws and Others
3. Foreign Investment Law
B. Local Supervisory Authorities
1. The Central Bank
2. Self-Regulation
3. Other Government Supervisory Entities
C. Local Securities Market
1. Stock Exchanges
a. Organization
i. The Montevideo Stock Exchange
ii. The Electronic Stock Exchange
b. Types of Securities Traded
c. Trading
2. Over-the-Counter Market
3. Clearance and Settlement
D. International Cooperation
1. Multilateral Agreements
2. United Nations-Sponsored Organizations
3. Bilateral Cooperation Agreements
II. INVESTOR PROTECTION REGULATIONS: LAW AND PRACTICE
A. Disclosure Regulations
B. Registration Process
C. Market Transparency Regulations
1. Market Manipulation
2. Insider Trading
3. Availability of Real-Time Trading Information
D. Shareholders Rights
1. Appraisal Rights
2. Voting Rights
3. Preemptive Rights
4. Proxy Rules
5. Defenses Available Against Hostile Takeovers
6. Rights of Access to Information
7. Supervision Rights
8. Limits on a Company’s Ability to Pay Dividends
9. Enforceability of Foreign Judgments
10. Indemnity
E. Enforcement Measures
1. Enforcement by Authorities
2. Civil Remedies
a. Violation of Registration and Prospectus Requirements
b. Misstatement or Omission in Sale of Securities
c. Market and Price Manipulation
i. Trading by Participants in a Distribution; Stabilization
ii. Solicitation to Facilitate a Distribution
iii. Touting, Wash Sales and Matched Orders; Purchases
During Tender Offer
d. Insider Trading
e. Fraudulent Brokerage Activities and Handling of Brokerage Accounts
i. Excessive or Unfair Profits or Commissions
ii. Operating While Insolvent or Not in Sound Financial Condition
iii. Violation of Rules and Regulations of Self-Regulating Organizations
and Brokerage Firms
iv. Violation of Margin Regulations
v. Boiler Room Operations
vi. Mismanagement of Customers Accounts: Conversion
f. Short-Swing Profits
g. Proxy and Tender Offer Regulations
h. Measure of Damages
i. Class Actions
j. Derivative Actions
k. Waiver Rights
l. Implied Actions
III. CONCLUSIONS AND RECOMMENDATIONS
Appendix 1 Ley 16749
Appendix 2 Circular 1.534
Appendix 3 Decreto 344/996
Appendix 4 Circular N/ 1.573
CHAPTER 8
Venezuela
I. REGULATORY FRAMEWORK OF THE VENEZUELAN SECURITIES MARKET
A. INTRODUCTION
DESCRIPTION OF THE REGULATORY FRAMEWORK OF THE VENEZUELAN
SECURITIES MARKET
III. THE CAPITAL MARKETS LAW AND ITS REGULATIONS
A. General Scope of the 1998 Securities Market Law
B. Regulations of the Securities Markets Law
IV. THE RULES ISSUED BY THE NATIONAL SECURITIES COMMISSION
A. Rules on Securities
1. Rules on Traditionally Regulated Securities
a. Rules Regarding Shares
b. Rules Regarding Bonds
2. Rules Regarding Traditionally Unregulated Securities
a. Rules Regarding Securities Representing a Short-term Credit
b. Rules Regarding Securities Granting a Participation Right
c. Rules Regarding Warrants, Options and Futures Agreements
B. Rules Applicable to Intermediaries and Collaborators in the Capital Market
a. Rules on Intermediaries
b. Rules Regarding Collaborators
3. Rules Regarding Collaborators Regulated by the Securities Market Law
a. Rules on Investment Advisors
b. Rules on Transfer Agents
c. Internal Rules for the Stock Exchanges
d. Rules on New Types of Participants
i. Rules on External Auditors
ii. Rules on Risk Rating Companies
4. Rules on Public Offerings and Disclosures
a. Rules on Public Offerings
b. Rules on Periodic and Non-periodic Disclosures
5. Rules on Financial Statements
SECTION TWO
I. THE NEW COLLECTIVE INVESTMENT ENTITIES REGULATORY FRAMEWORK
II. THE SECURITIES DEPOSIT ENTITIES FRAMEWORK
SECTION THREE
I. FOREIGN INVESTMENT REGULATIONS
II. EXCHANGE CONTROL RULES
SECTION FOUR
Section 1
The Regulatory Authorities
I. THE NATIONAL SECURITIES COMMISSION
A. Structure of the CNV
B.CNV Responsibilities
1. Authorization of Public Offerings
2. Control of the Market
II. THE BOARDS OF DIRECTORS OF THE STOCK EXCHANGES
Section 2
The Organization of the Market
I. THE STOCK EXCHANGES
A. Organization
B. Functioning
1. Types of Securities Traded on the Stock Exchanges
2. Trading
II.COLLECTIVE INVESTMENT ENTITIES
A. Creation of Collective Investment Entities
1. Creation Requirements
a. Common Requirements for All Collective Investment Entities
i. Legal Forms that a Collective Investment Entity May Adopt
(a) The Alternatives Allowed by Law
(b) A Critical Appraisal of the Legal Alternatives
ii. Mandatory Formation by Public Offering Requirements
for the Various Types of Collective Investment Entities
i. Requirements for Closed Capital Collective Investment Entities
ii. Requirements for Open Capital Mutual Investment Funds
2. Registration Procedures
a. The Pre-formation Stage
i. Authorization of the National Securities Commission
(a) Authorization of the Public Offering
(b) Authorization of the Offering Document
ii. Making the Public Offering
b. Formation Stage
B. Functioning of Collective Investment Entities
C. Rules Governing the Functioning of All Types of Collective Investment Entities
a. Management of Equity
b. Investor Protection
c. Applicable Administrative Measures and Penalties
i. Administrative Measures
(a) Suspension and Revocation of Authorization
(b) Government Takeover and Liquidation
i. Fines and Criminal Penalties
(a) Administrative Penalties
(b) Criminal Penalties
2. Rules for Functioning for Each Type of Collective Investment Entity
a. Rules for Mutual Investment Funds
b. Rules for High Risk Capital Collective Investment Entities
c. Rules for Real Estate Collective Investment Entities
Section 3
The System of Investor Protections
I. PROTECTION OF INVESTORS IN ALL TYPES OF SECURITIES
A. Disclosure Regulations
B. Market Transparency Regulations
1. Market Manipulation
2.Insider Trading
3. Availability of Real-Time Trading Information
C. Remedies for Investors
1. Civil Remedies
a. Available Remedies
2. Non-available Remedies
3. Procedural Requirements
a. General Procedural Aspects
b. Enforceability of Foreign Judgments
II. PROTECTION OF SHAREHOLDERS
A. Remedies Applicable to Shareholders Generally
1. Appraisal Rights
2. Shareholders' Annual Meetings and Proxy Rules
3. Right to Initiate a Public Offer Procedure
4. Preemptive Rights
B. Remedies Aimed at Protecting Minority Shareholders
1.Right to Receive Dividends
2.Classified Voting Rights
3.Defenses Available Against Hostile Takeovers
CONCLUSIONS AND RECOMMENDATIONS
INDEX
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