{"id":12670,"date":"2018-11-19T10:04:37","date_gmt":"2018-11-19T10:04:37","guid":{"rendered":"http:\/\/progresomicrofinanzas.org\/?p=12670\/"},"modified":"2018-12-12T11:03:33","modified_gmt":"2018-12-12T11:03:33","slug":"12670","status":"publish","type":"post","link":"https:\/\/www.fundacionmicrofinanzasbbva.org\/revistaprogreso\/en\/12670\/","title":{"rendered":"Related party transactions, control and transactions requiring authorization from the Board of Directors"},"content":{"rendered":"
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On 10th October, the Securities Market Authority published its provisions regulating clause c) of article 51 of the Securities Market Law.<\/span><\/p>\n

We should remember that this<\/span> article 51.c<\/span><\/a> sets out that it is incumbent on the Board of Directors to authorize beforehand those actions or contracts involving at least 5% of the issuing company’s assets, those undertaken with natural or legal persons with links to their board members, directors, and those involving shareholders who represent, whether directly or indirectly, more than 10% of the company capital; as well as putting the terms of the transactions out \u00a0for review by an external auditing company to the issuing company, in cases where the parties doing the legal business are subject to the same controlling shareholder.<\/span><\/p>\n

Scope of application<\/b><\/p>\n

The resolution applies to all companies having at least one type of share that entitles holders to voting rights in proportion to the equity capital filed in the Public Securities Market Register. This can include listed companies set up abroad whose securities are treated as though they were domestic, unless they report their decision not to be subject to the regulation.<\/span><\/p>\n

Related parties and control<\/b><\/p>\n

The Resolution defines the scope of “linkage” to the listed company’s board directors, senior managers and shareholders and refers back to the Regulation on Indirect Ownership, Linkage and Control, passed under Resolution SMV 019-2015-SMV\/02, determining indirect ownership and control.<\/span><\/p>\n

Prior authorization from the Board of Directors<\/b><\/p>\n

In addition, it specifies those actions or contracts that require prior authorization from the Board of Directors, which include:<\/span><\/p>\n