Page: 1 2 3 4 5 6 7 8 9 10 11 12
Comparison of Panama IPO Market to Us Market
The prospect must describe relevant facts about the operations of the company, its financial condition and its administration. In the Anglo-Saxon market, all companies wishing to offer their securities to the public must file form S-1. The prospectus must contain the following information as a minimum for both markets as well:
1. The business name
2. Properties
3. Competitors
4. Identities of their officers and directors, and their compensations
5. Material transactions between the company and its officers and directors
6. Material legal proceedings involving the company or its officers and directors
7. The plan for distributing the securities; and the intended use of the proceeds of the offering.
Registration statements must include also the financial statements, audited by an independent certified public accountant.
Besides the information required expressly by the form, the company must provide any other information deemed necessary to make a complete disclosure and avoid presenting misleading statements. The prospectus must also mention any other prominent risk, for example:
1. Lack of business during the company’s history
2. Adverse conditions in that particular industry
3. Lack of markets for the securities offered
4. Dependence of key personnel within the enterprise
As we can see, all these similarities in the IPO registration process exist because Panamanian legislation is based on American legislation as for regulations for the issuance or securities.
In the American market, after the IPO the company is obliged to comply with the requirements of reporting to the SEC the following information:
1. Its operations.
2. Its officials, directors and some of its shareholders, including salaries, benefits and transactions between a company and its administration.
3. The financial condition of the company, including the financial statements audited by an independent certified public accountant.
4. Its competitive position and material terms of contracts or lease agreements.
This information must also be provided to the CNV by issuers of an IPO in Panama.
Another similarity between both environments is that issuances take approximately the same time to prepare and launch to the market. IPO’s in Panama and the US typically take about 3 to 6 months. Half of the time is spent preparing the requirements for the SEC, while the rest, 4 to 6 months, is used for road shows to market the offering.
A similarity worth mentioning is the role of the investing banker in the cases of initial public offerings. The role of the investment banker is the same in IPO’s markets in both the USA and Panama.
10.2 Differences
A clear difference between the IPO’s markets in the USA and Panama is that while in the USA any issuance of IPO’s are regulated by federal and state laws, in Panama they are regulated by the country’s national laws, since there [next page]