Legal Advisor | Sudameris Securities Casa de Bolsa y Sudameris Asset Management
Jacques Martín Parra Fuentes
Legal Advisor | Sudameris Securities Casa de Bolsa y Sudameris Asset Management
What are the projects you are most proud to have worked on in the last 12 months?
Some of the projects I am most proud to have worked on in the last 12 months include the creation of the legal department in two companies, Sudameris Securities and Sudameris Asset Management. Following my appointment at the brokerage firm and the investment equity fund manager of Sudameris Bank, the legal department was established for the first time in both companies, allowing us to position ourselves on par with competitors in the sector. This project represented a significant challenge for me, both professionally and personally.
Creating the legal department within the companies required the comprehensive application of all the knowledge I have acquired throughout my career, from mastering legal technicalities to acting with certainty and determination. One of the most complex aspects was organising and structuring the department from scratch, alerting senior management to existing legal risks, and implementing concrete measures to mitigate them. Additionally, there was the challenge of raising awareness and promoting a culture of legal compliance among people who, until then, were either unfamiliar with these practices or had only a superficial understanding of them.
Another important project was the action plan to adjust the regulatory framework for mutual funds. This year, I convened a meeting with the director of the corporate surveillance entity (‘DGPEJBF’, by its acronym in Spanish) and the main players in the securities market. The discussion primarily focused on the incompatibility of the provisions of Law No. 6,446/19 with the nature of mutual funds, particularly regarding the mandatory annual communications in the registry of legal entities and ultimate beneficial owners (UBOs).
Participants debated the inconsistencies between the provisions of Law No. 6,446/19 and the operational nature of mutual funds. Both the law and its regulatory decree require mutual funds, as well as other obliged entities, to submit annual communications detailing the composition of their legal structure, including all participants. Furthermore, they must update this information within 15 business days of any structural changes. However, given the nature of mutual funds, whose participants enter and exit daily, strict compliance with this obligation is practically unfeasible.
Currently, there is a cooperation agreement between the DGPEJBF and the securities market supervisory entity, whereby the latter is expected to compile and submit the required information to the DGPEJBF. In practice, however, this coordination has not yet been effectively implemented. The debate was enriching and aimed at helping position Paraguay as a country committed to good practices in properly understanding its structures and legal entities, as well as to the prevention and fight against money laundering.
Based on your experiences in the past year, are there any trends in the legal or business world, specific to Paraguay, that you are keeping an eye on that you think other in-house lawyers should be mindful of?
Based on my experience over the past year, I have identified some key legal and business trends that I believe are critical for in-house lawyers to consider. Below, I highlight two areas that I consider highly relevant.
Firstly, digital signatures have become increasingly important. In 2021, Paraguay enacted a law regulating digital signatures, granting qualified electronic signatures the same validity as handwritten signatures within Paraguayan territory. Today, this tool is a key resource for concluding business transactions in an agile and efficient manner. The ability to sign private agreements or corporate records, such as board of directors’ meeting minutes or shareholders’ meeting minutes, using qualified electronic signatures is highly convenient. It allows for the prompt execution of documents, avoiding delays associated with handwritten signatures. As lawyers, it is crucial that we promote digital development in Paraguay, provided there is a clear and secure regulatory framework. In doing so, we can contribute to productivity, efficiency, and innovation within the legal and business sectors.
Secondly, compliance in the prevention of money laundering and the financing of terrorism has become central to good business practices worldwide, regardless of industry or economic activity. Paraguay is no exception. The entity responsible for preventing money laundering, SEPRELAD (by its Spanish acronym), supervises specific entities according to their activities. However, even companies not under SEPRELAD’s direct supervision have implemented internal mechanisms and processes to know their clients and prevent money laundering or terrorist financing. These practices are not only becoming established trends at both corporate and legal levels but also offer several advantages, such as protecting the company’s reputation, strengthening trust with clients, and preventing criminals from enriching themselves. I believe that all companies, regardless of their industry, should adopt these policies and processes as part of their best practices.
What are some key attributes every in-house lawyer should possess?
In this role, it is essential to develop effective negotiation skills, especially when the legal risk is so high that, at times, business may not get done or will not develop exactly as planned by the head of the relevant area. Being able to manage these situations in a way that balances legal protection with commercial purposes is key for any in-house lawyer.
On the other hand, keeping up to date and open to the constant evolution of the law is equally essential. The speed of business is increasingly accelerating, and transactions are being conducted with unprecedented agility.
A few years ago, it would have been impossible to think of executing a share purchase agreement with a simple digital signature in Paraguay, but today this is completely viable.
The expression of the will is now just a click away. However, for a lawyer with a more conservative view, this type of solution may generate doubts about its security, even if there are enough reasons to trust it.
That is why I consider it crucial for in-house lawyers to be willing to adopt agile legal mechanisms and tools, both for the firm’s business and for its clients, always within a framework of security and trust.