Colombia Update: INVESTMENT REGIME OF COMPANIES SPECIALIZED IN DEPOSITS AND ELECTRONIC PAYMENTS -SEDPE-

Through opinion 2021052157-009 of June 16, 2021, the Financial Superintendency of Colombia (SFC) clarified some topics in connection with the investment regime that SEDPEs can carry out within the framework of their capacity as Exchange Market Intermediaries (IMC).

According to the foregoing, we share the most relevant points of the referred opinion in the following terms:

1.Regime of the Limit of foreign currency proprietary Position:

Even though the Bank of the Republic decided to authorize the SEDPE to act as IMC, providing them with the possibility of making investments in foreign currency, the SFC, through the opinion, clarified that, under External Resolution 1 of 2018 in its article 20°, the SEDPE are excluded from the application of the regime of the foreign currency proprietary position.

As a result of that exception, the position that SEDPE assumes in foreign currency is not subject to the provided limit for the foreign currency proprietary position. The limit consists in an arithmetic average of 3 business days of the IMC’s foreign currency position may not exceed the equivalent, in foreign currency, of 20% of the entity’s technical equity, nor may it be less than (-5%).

2.Treasury Investments:

Concerning treasury investments, namely, all those included in account 13 of the Single Catalog of Financial Information for Supervision Purposes of the SFC, it was clarified by such entity that they are subject to the instructions contained in Chapter IV, Title V, Part II of the Basic Legal Circular (CBJ), therefore, based in the referred regulations SEDPES should manage and control the exposition to the market risk.

3.Duty of Information on Market Risk Matters:

Regarding this point, the SFC clarified that the SEDPEs are not obliged to file periodic information related to market risk to the SFCs.

However, if a SEDPE constitutes an investment or financial derivatives portfolio, it is necessary to design, adopt and implement a Market Risk Management System (SARM) that allows them to identify, measure and monitor such risk. Likewise, they must meet the requirements that are made by the SFC concerning SARM.

By LLOREDA CAMACHO & CO, Colombia, a Transatlantic Law International Affiliated Firm.  

For further information or for any assistance please contact colombia@transatlanticlaw.com 

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