What is it about?
General Standard No. 385 was issued by the Financial Market Commission, formerly the Superintendency of Securities and Insurance, on June 8, 2015.
The purpose of this regulation is for publicly traded companies to disclose their corporate governance practices so that investors have sufficient information to make correct investment decisions.
For such purposes, the entities described in the preceding paragraph are required to report as of March 31 of each year, their corporate governance, social responsibility and sustainable development practices with respect to the previous calendar year.
Although the Law is broad and penalizes anyone who executes or enters into, individually or collectively, any act or contravention that prevents, restricts or hinders free competition, or tends to produce such effects, it lists a series of situations that comply with such requirements, such as:
- Agreements or concerted practices involving competitors among themselves, which consist of fixing sales or purchase prices, limiting production, allocating market zones or quotas or affecting the outcome of bidding processes, as well as agreements or concerted practices that, conferring market power to competitors, consist of determining marketing conditions or excluding current or potential competitors.
- The simultaneous participation of a person in relevant executive or director positions in two or more competing companies, provided that the business group to which each of the referred companies belongs has annual revenues from sales, services and other business activities that exceed one hundred thousand unidades de fomento in the last calendar year.
- Abusive exploitation by an economic agent, or a group of them, of a dominant position in the market, fixing purchase or sale prices, imposing on a sale that of another product, allocating market zones or quotas or imposing other similar abuses.
- Management of Conflicts of Interest: subsequently incorporated by Law 21 of 2017, with respect to fiduciaries.
These matters acquire great relevance considering the number of cases that have come to light in recent years, and the set of measures that can be adopted by the Court of Free Competition, where the following stand out:
Modify or terminate acts, contracts, agreements, systems or arrangements that are contrary to the provisions of the Law.
To order the modification or dissolution of the companies, corporations and other legal persons of private law that have intervened in the acts, contracts, covenants, systems or agreements referred to in the preceding letter.
Apply fines for tax benefits. If it is not possible to determine the sales or the economic benefit obtained by the offender, the Court may apply fines up to a sum equivalent to sixty thousand annual tax units. The fines may be imposed on the corresponding legal entity, its directors, administrators and any person who has intervened.
Prohibition to contract in any capacity whatsoever with State administration bodies.