Actualidad Peru

Draft regulation on operations between related companies

Ruling SMV N° 018-2018-SMV/01

With the publication of a Ruling in El Peruano Official Gazette on May 25, the Directorate General of the Securities Market of Peru (SMV) put the Draft Provisions for applying section c), article 51 of the securities market law to the market for consideration.

Article 51 establishes the obligations for issuers with securities entered in the Public Registry of the Securities Market, and section c) includes a rule on corporate governance, which is aimed at regulating significant transactions to be carried out with related parties. It establishes that related party transactions representing at least 5% of the company assets must obtain prior approval of the Board.

It also establishes that, in transactions in which the controlling shareholder of the issuer also exercises control over the legal entity participating as the counterparty in the trade or contract, a review of the terms of the transaction by an external entity shall also be required.

The Bill defines the scope of the terms “control” and “related”, and regulates the participation of the external reviewing entity for the transaction. It clarifies that the provisions in the Bill shall only be required of issuers with holdings in its share capital entered in the Public Registry of the Securities Market.

The deadline for submitting comments or observations to the Department is June 24.