Disclosure Requirements - Colombia
Disclosure Category: 1
Markets where disclosure by CBL to issuers, investment fund managers and/or to regulators or market authorities is mandatory under applicable law.
In order to comply with the applicable legislation, customers entering into transactions in the Colombian domestic market consent, and are hereby deemed to consent, to disclosure and to the appointment of the requestor as their attorney-in-fact, under power of attorney, to collect from CBL directly or through any custodian such information as is required to be disclosed. Customers who do not want to grant such authority to CBL should refrain from holding such securities in their account with CBL.
According to local regulation the local custodian is responsible for disclosing to the local authorities or regulators the information related to the investments performed by the foreign portfolio Investors (FPIs).
The local custodian is required to report on a monthly basis the custody positions maintained per FPI, or in the case of global custodians, on a consolidated basis, and the consolidated cash balances and custody positions per global custodian to the Central Bank as well as to the Financial Superintendence.
Under certain circumstances there could be additional disclosure requirements made by any of the local regulators or market authorities, which will be treated on a case by case basis depending on the type of information required, for example tax related information required by the tax authorities (DIAN).
Obligation to report threshold crossings
According to Decree 119 of 2017 the beneficial owner in its quality as FPI will be responsible for the monitoring of the investment limits and threshold crossings. Furthermore, FPIs will have to report to the local custodians for further disclosure and reporting to the local authorities. This ensures that in case of split holdings on domestic local custodians, there is a consolidated record of the FPI.
In case of ownership limit reporting, requirements applying to non-resident investors, the local administrator will perform the appropriate declarations to ensure compliance of reporting requirements with the local authorities and the issuer companies.
Failure to comply with disclosure requirements may result in the failure of the transaction and in economic sanctions imposed on the FPI.
The following beneficial ownership thresholds currently apply:
- Acquisition of shares: One single beneficial owner cannot hold 25% or more of the voting shares of a company unless the investor acquires them through a Public Tender Offer (OPA). Also, if the given shareholder holds 25% or more of the voting shares, any additional buy of 5% or more will need to be completed through a Tender Offer. Customers or the underlying FPI must report such threshold breach as soon as it occurs to CBL who in turn will report to its domestic custodian for further reporting to the relevant authorities.
- Sale of shares: Any sale of shares equivalent to 10% or more of the outstanding shares of a company must be disclosed by the customer in relation to the underlying FPI to Clearstream within 4 calendar days from its occurrence i.e. settlement of the trade that reaches such threshold.
The local custodian during the same fiscal year, requires the filing of a tax declaration for that fiscal year.