Latinex: how it works, who runs it, and what issuers must disclose

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What this exchange is

On 26 June 1990 the Panama Stock Exchange opened its doors and held its first trading session, making it one of the older organised markets in Central America. On 30 June 2021, after 31 years, it rebranded as the Latin American Stock Exchange — known everywhere as Latinex.

Its ISO 10383 MIC code — the unique four-letter identifier that data vendors and clearing systems use to label every trade — is XPTY. All trading is denominated in US dollars, so there is no currency risk for holders of Panamanian securities relative to the dollar.

Panama’s securities market is clearly concentrated on debt instruments; by far the most active issuers are banks and other companies linked to the financial sector. Companies rarely issue equity on the local market and, when they do, often issue shares without voting rights; investor demand is generally limited because of the small pool of qualified buyers.

If you are looking for a deep, liquid stock market in the European or North American sense, this is not it. Latinex is honest about what it is: a dollarised, bond-first venue whose equity tier is a sideshow to a large and sophisticated debt market serving Panama’s banking sector and government.

Who owns it

The exchange itself is a wholly-owned subsidiary of Latinex Holdings, Inc. — a parent company that also controls Latinclear, Panama’s central securities depository. In October 2009, the shareholders of the Panama Stock Exchange approved a corporate reorganisation to create that holding company, Latinex Holdings, Inc.

The new common shares of Latinex Holdings began trading on the exchange itself in 2011 — meaning the parent of the exchange is itself a listed company on that same exchange. The exchange is a Panamanian corporation owned by private investors, its shares are publicly traded on itself, and there are no restrictions on owning those shares except that members must hold at least 2,500 shares each.

Olga Cantillo is the Chief Executive Officer of the Latinex Group. She is a financial professional with over 34 years of expertise in the capital markets and banking sectors in Panama and the wider region.

Not published: the names of individual board directors are not listed on the latinexbolsa.com governance pages that were accessible at the time of writing; the exchange’s articles of incorporation, filed under Panamanian corporate law, govern board composition.

Who regulates it

The SMV — the Superintendencia del Mercado de Valores, Panama’s securities-market regulator — is responsible for implementing and enforcing Decree Law No. 1 of 8 July 1999 (known as the Securities Act) and supervising broker-dealers, investment advisers, investment managers, credit rating agencies, issuers of securities, and self-regulated entities such as Latinex and Latinclear. The SMV was formally established in its current form by Law 67 of 1 September 2011, which replaced the former National Securities Commission.

Activities within Latinex are examined, supervised and audited by the SMV. The SMV can require any issuer to amend its disclosures, suspend trading in a security, revoke a broker-dealer’s licence, and impose civil and criminal penalties under the Securities Act.

Public reprimands in recent years have related primarily to unauthorised changes of control and amendments to a company’s articles of incorporation without the SMV’s prior consent.

Public filings, resolutions and the full text of the Securities Act are available at the SMV’s website, supervalores.gob.pa. The SMV’s offices are at Calle 50, Edificio Global Plaza, Piso 8, Panama City; telephone (507) 501-1700; email [email protected].

What trades there

Latinex runs three broad markets. The Main Market (Mercado Principal) carries government bonds, corporate bonds, mortgage-backed notes, investment-fund units and — in much smaller volume — company shares.

The International Listing Market is a separate platform, operated by Latinex and authorised by the SMV, where debt issues that do not need full Panamanian registration can still obtain a recognised listing on an organised exchange. The ESG Segment is a thematic tier for green, social and sustainability-linked instruments, with its own voluntary disclosure guide.

The main share index is the BVPSI — the Bolsa de Valores de Panamá Stock Index — which tracks the performance of the largest companies listed on the exchange and has a base value of 100 set at 31 December 2002. The exchange calculates and publishes the BVPSI itself.

Not published: the exact methodology for selecting and rebalancing BVPSI constituents — including how often the constituent list is reviewed — is not laid out in the publicly accessible pages of latinexbolsa.com or the SMV’s website that were examined for this article.

The exchange runs on a Nasdaq Matching Engine — known as the Nasdaq ME — for trade execution, giving it a modern, internationally standard trading infrastructure. There are no listed derivatives (options or futures) on Latinex.

Latinex connects Panama’s market with El Salvador and Nicaragua under a remote-operator model that allows licensed intermediaries to trade across those markets under mutual recognition.

What it takes to list

Under the Securities Act, there are no minimum size, trading record, working capital or free-float requirements set by statute for a company seeking to list on Latinex. The gate is the SMV’s registration process, not a numerical hurdle.

To issue securities through Latinex, an issuer must coordinate the structuring with a financial adviser, complete registration requirements with Latinex, obtain authorisation from the SMV, comply with Latinclear’s custody requirements, and distribute an offering prospectus.

Under the Securities Act, any issuer, underwriter or agent that sells or offers to sell securities to the public must first register those securities with the SMV. The exchange has absolute discretion to accept or reject listing applications, and meeting all stated qualifications does not guarantee admission.

Not published: specific minimum share-capital thresholds expressed in dollar amounts, minimum public-float percentages and minimum track-record periods are not stated in the publicly accessible Latinex listing pages or SMV issuer-registration guidance examined for this article; the applicable provisions are contained in the SMV’s agreements (acuerdos) and the exchange’s internal rulebook (reglamento interno), which are available in Spanish only at supervalores.gob.pa.

What companies must tell you

The SMV oversees reporting and disclosure obligations for all regulated entities. The main obligations include filing annual and quarterly reports covering financial and operating results: quarterly reports are accompanied by unaudited financial statements and must be filed within two months of each quarter-end; annual reports, which must include audited financial statements, must be filed within three months of the fiscal year-end.

All filings are submitted through the SMV’s online system, SERI, and are publicly accessible at supervalores.gob.pa.

In addition, issuers must provide updates on their corporate governance structures, report suspicious financial transactions and publish immediate press releases about certain material events identified in the Securities Act. Insider trading — using material non-public information obtained through a privileged relationship to gain advantage in buying or selling registered securities — is prohibited under the Securities Act and can attract civil treble damages.

Filings are made in Spanish; an English translation is not required by law, which is a significant practical barrier for foreign readers.

Not published: the precise shareholding threshold at which a holder must publicly disclose their stake — equivalent to what other markets call a major-shareholding disclosure rule — is not stated in plain terms on the SMV’s publicly accessible English or Spanish FAQ pages or on Latinex’s issuer pages examined here; the relevant provisions are contained in Decree Law No. 1 of 1999 and SMV Agreement 3-2008. Equally, the rules on what companies must disclose about directors’ pay and related-party transactions exist within the SMV’s corporate-governance acuerdos but are not summarised in accessible English-language form by either Latinex or the SMV.

How trading works

Latinex uses an electronic trading system that executes transactions in real time. Sessions run Monday to Friday from 10:00 am to 3:00 pm.

The exchange operates on Panama time, which matches Eastern Standard Time (EST, GMT−05:00) and does not observe daylight saving time — so it is always five hours behind London and always in step with New York’s winter clock. The market observes Panamanian public holidays, giving it roughly 248 trading days a year.

Trades can only be executed by officials of the exchange’s member firms — known as Value Brokers — who must be previously authorised by Latinex to perform those functions. Any licensed brokerage can apply to become a market maker for any security at any time.

Not published: specific price-movement limits that would automatically pause trading in a security — known as circuit breakers or dynamic price bands — are not described in accessible public documentation from Latinex or the SMV examined for this article.

How a trade is settled

Settlement — the moment when money and securities actually change hands — occurs on T+2, meaning two working days after the trade date. On T+1, Latinclear freezes the relevant securities; at the start of T+2 the process completes through the Clearing House of the Banco Nacional de Panamá, Panama’s state bank.

Latinclear uses BIS settlement model 2 — a delivery-against-payment arrangement in which cash is netted across all trades while securities are settled transaction by transaction — so a seller does not hand over securities until payment is confirmed. A central counterparty — an entity that steps into every trade to guarantee it if one side defaults — is not available at Latinex; the settlement guarantee rests on Latinclear’s participant-bond and daily-debit-limit system.

Securities are typically held as a single “macro title” — one master certificate immobilised in Latinclear’s vault — so physical certificates do not move. An investor receives from their broker a record confirming ownership and periodically receives an account statement from Latinclear’s participant.

Shares are held in your broker’s name at Latinclear rather than in your own name directly on the register — the standard nominee arrangement used by most international markets.

Short selling, lending and margin

In practice, short selling — betting that a share will fall by borrowing it and selling it — does not exist in any organised form on Latinex. Securities lending is not an established market practice at Latinex in the way it is at larger international exchanges.

Not published: neither Latinex’s public rulebook pages nor the SMV’s regulations examined for this article contain a published framework for short selling, securities lending, or margin trading for retail or professional investors on the equities market; the absence of these mechanisms is consistent with what one would expect from a market where equity trading is thin and most activity is in buy-and-hold debt.

This matters for price behaviour. Without the ability to short a share, bad news about a company tends not to be reflected in the price as quickly or as efficiently as it would be in a deeper market.

A foreign investor should expect one-directional price movements and periods of very low trading activity.

Can a foreigner buy here?

There is no law preventing a non-resident from investing in Panamanian securities. Government policy and law treat Panamanian and foreign investors equally with respect to access to credit and capital markets.

In practice, the route is to open an account with a Latinex member broker-dealer licensed by the SMV. Foreigners are required to present a passport and a taxpayer identification number, along with an affidavit confirming that the inflow and outflow of money meets the tax obligations of the beneficiary’s country of tax residence.

Dividends are generally subject to a withholding tax of 10% when paid out of Panamanian-source profits, and 5% when paid out of foreign-source profits. Capital gains on securities sold on the exchange and issued by an entity registered with the SMV are exempt from Panamanian income tax.

Panama has agreed to IMF Article VIII and is committed to imposing no restrictions on payments and transfers for current international transactions — meaning you may repatriate proceeds freely. There is no foreign-exchange risk because the market is already in US dollars.

For those who want an easier entry point, eligible debt securities listed on Latinex can be held through Euroclear Bank via the iLink bridge, allowing international investors to buy and hold Panamanian instruments through their global custodian accounts. There are no Panamanian depositary receipts traded on foreign exchanges for the small number of locally listed equities.

What it costs

Not published: Latinex’s public tariff pages (latinexbolsa.com/en/market-access) were not fully accessible at the time of writing, and specific registration fees payable to the exchange, annual maintenance fees and per-trade brokerage commission rates are not stated in plain figures in the public-facing English documentation examined here. The exchange does publish a tariff document (arancel) in Spanish, referenced in its internal rulebook, which sets the differentiated rate structure.

Market makers pay no commission on trades they execute for their own position, and a differentiated rate — as expressed in the Latinex tariff — applies to transactions they carry out on behalf of third parties.

What is established is the tax position. Interest and gains on securities sold on the exchange and issued by a company registered with the SMV are exempt from Panamanian income tax — a deliberate legislative incentive to use the organised market rather than over-the-counter channels.

There is no stamp duty or financial-transaction tax on exchange trades in Panama.

Where the prices are

Latinex uses an electronic transaction system that processes trades in real time. The exchange publishes daily closing prices and trading data on its own website at latinexbolsa.com, where market screens, transaction summaries and issuer volume tables are available to the public without charge.

The data is free but presented in Spanish.

The exchange’s own site offers information on trading activity and exchange membership as well as statistics relating to the BVPSI Index. The major international data platforms — Bloomberg (ticker suffix .PA) and Refinitiv/LSEG — carry some Latinex-listed securities, though coverage is patchy and often delayed rather than live for the smaller equities.

This thin data coverage is the primary reason that English-language research on Panamanian listed companies is almost nonexistent: when a price does not appear in a terminal, analysts do not write about the company.