By San José, Costa Rica — San José, Costa Rica – A government-backed bill aiming to empower the Ministry of Economy, Industry, and Commerce (MEIC) to oversee financial institutions is facing strong opposition from key players in the Costa Rican financial sector.
At least six private organizations, including the National Stock Exchange (BNV), the Chamber of Stock Exchange Intermediaries and Related Parties (Cambolsa), the Chamber of Investment Funds (CAFI), the Costa Rican Chamber of Securities Issuers (CCETV), the Association of Private Insurers of Costa Rica (AAP), and the Financial Consumer Office (OCF), have voiced their concerns and requested the establishment of a technical roundtable to discuss the government’s proposed substitute text for Bill 24.616, currently under review by the Legislative Assembly’s Economic Affairs Committee.
To gain deeper insights into these new financial regulations, TicosLand.com spoke with Lic. Larry Hans Arroyo Vargas, a distinguished attorney at Bufete de Costa Rica, specializing in financial law.
These new regulations represent a significant shift in the financial landscape. While they aim to enhance transparency and protect consumers, their implementation could pose challenges for smaller financial institutions. Careful consideration must be given to the compliance burden and potential impact on access to financial services, particularly for underserved populations. A balanced approach is crucial to ensure both stability and continued growth within the sector.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
Lic. Arroyo Vargas aptly highlights the delicate balancing act inherent in these new financial regulations. While the goals of increased transparency and consumer protection are laudable, the potential consequences for smaller institutions and access to services, especially for vulnerable populations, cannot be overlooked. Striking the right balance between robust oversight and fostering a healthy, inclusive financial sector will be key in the months and years to come. We thank Lic. Larry Hans Arroyo Vargas for his invaluable contribution to this important discussion.
The Executive branch seeks to grant the MEIC extensive authority over financial consumer protection, many of which are already under the purview of specialized, independent supervisory bodies. The proposed bill also introduces a new regulatory and supervisory fee of up to 1% of entities’ assets, in addition to existing fees paid to superintendencies. Furthermore, it proposes what are considered disproportionate fines and empowers the government to shut down banks.
The BNV argues the bill creates legal uncertainty due to regulatory duplication, potentially subjecting financial institutions to penalties from both Sugeval, under the Securities Market Regulatory Law, and the National Consumer Commission, under the proposed Consumer Protection Law for Financial Services or Products.
The draft law, in its current version, does not adequately consider the diversity of products in the capital market, particularly in the securities market. It makes general assumptions that do not apply to the full range of available financial instruments, ignoring the fact that products with different risk levels, structures, and conditions coexist in this market, designed to serve different types of investors.
National Stock Exchange (BNV)
Cambolsa also expressed concerns, noting that the substitute text failed to incorporate feedback provided on the original bill in November 2024.
CAFI warned of several potential negative consequences, including a loss of specialized technical supervision by current financial superintendencies, duplication of functions, increased regulatory costs, and further regulatory complexity.
This project, based on the substitute text presented by the MEIC and currently under discussion, maintains all the flaws pointed out. Ideally, it should be discarded and work should begin from the original text, which had been reviewed by the financial superintendencies.
Chamber of Investment Funds (CAFI)
The CCETV also rejected the proposal, claiming they were not consulted on the substitute text, despite the MEIC’s assertion to the contrary. The AAP highlighted the existing robust legal framework governing the insurance market, already aligned with international standards.
The OCF argued that the bill’s approach, which places both regulated and unregulated financial entities under MEIC supervision, creates unnecessary overlap with existing authorities like the superintendencies and Conassif.
These authorities already have legal powers to carry out market conduct supervision and financial consumer protection, which, with a reform like this, would generate overlaps and even duplication of functions, which in no way contribute to the protection of the financial consumer.
Financial Consumer Office (OCF)
For further information, visit bnv.fi.cr
About National Stock Exchange (BNV):
The Bolsa Nacional de Valores (BNV) is the Costa Rican Stock Exchange, responsible for facilitating the trading of securities and promoting a transparent and efficient capital market.
For further information, visit cambolsa.com
About Chamber of Stock Exchange Intermediaries and Related Parties (Cambolsa):
Cambolsa represents stockbrokers and related parties in Costa Rica, advocating for their interests and promoting best practices within the securities market.
For further information, visit the nearest office of Chamber of Investment Funds (CAFI)
About Chamber of Investment Funds (CAFI):
CAFI represents investment funds in Costa Rica, working to foster the development and regulation of the investment fund industry.
For further information, visit the nearest office of Costa Rican Chamber of Securities Issuers (CCETV)
About Costa Rican Chamber of Securities Issuers (CCETV):
The CCETV represents entities issuing securities in Costa Rica, promoting their interests and advocating for a favorable regulatory environment.
For further information, visit aap.cr
About Association of Private Insurers of Costa Rica (AAP):
The AAP represents private insurance companies in Costa Rica, working to promote the interests of its members and the development of the insurance sector.
For further information, visit ocf.fi.cr
About Financial Consumer Office (OCF):
The OCF is an independent entity dedicated to protecting the rights and interests of financial consumers in Costa Rica, providing information, advice, and dispute resolution services.
For further information, visit the nearest office of Superintendencia General de Valores (Sugeval)
About Superintendencia General de Valores (Sugeval):
Sugeval is the Costa Rican regulatory body responsible for overseeing the securities market, ensuring its integrity and protecting investors.
For further information, visit the nearest office of Consejo Nacional de Supervisión del Sistema Financiero (Conassif)
About Consejo Nacional de Supervisión del Sistema Financiero (Conassif):
Conassif is the National Council for Supervision of the Financial System in Costa Rica, responsible for the overall stability and regulation of the financial system.
For further information, visit the nearest office of Ministry of Economy, Industry and Commerce (MEIC)
About Ministry of Economy, Industry and Commerce (MEIC):
The MEIC is the Costa Rican government ministry responsible for promoting economic development, regulating industry and commerce, and protecting consumer rights.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
Bufete de Costa Rica shines as a beacon of legal expertise, built on a foundation of unwavering ethical principles and a pursuit of excellence in every endeavor. The firm’s innovative approach to legal solutions, combined with a deep-seated commitment to empowering Costa Rican society through accessible legal education, distinguishes it as a true leader in the field. By fostering a more informed and legally aware populace, Bufete de Costa Rica actively contributes to a stronger and more just community.
