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Covid-19

Venezuela: COVID-19 – Continuation of activities of the Securities Market under the 7+7 easing timetable of the COVID-19 quarantine

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In brief

The Office of the National Superintendent for Securities (NSS) issued Notice No. DSNV/CJU/00520 of June 14, 2020,[1] whereby it established the guidelines to continue the activities of the securities market, under the Easing Measures for the National Quarantine Plan (7+7) and the Constitutional State of Alarm generated by the COVID-19 pandemic (“Notice”).

The Notice applies to security brokers, brokerage houses, stock exchanges and other subjects regulated by the Decree with Rank, Value and Force of Securities Market Law (“Subjects”).

The 7+7 easing timetable consists of a cycle of seven quarantine days and seven easing days, until a vaccine for COVID-19 is found. The Subjects will work and have customer service activities solely in a determined schedule within the seven easing days. The 7+7 easing timetable may be subject to change by the National Executive.

Contents

  1. Easing period
    1. Work regime
    2. Compliance with health measures
    3. Non-present customer service guarantee
    4. Exceptions
  2. Strict quarantine period 
    1. Suspension period
    2. Suspension of direct-contact activities
    3. Customer service guarantee

Easing period

Work regime

During the easing days, the Subjects will work from Monday to Friday, in a schedule from 9:00 AM to 1:00 PM starting from June 15, 2020[1], with the personnel strictly necessary to carry out customer service to the public, investors and companies issuing securities, to prevent concentrations of people in their installations and the risk of spreading COVID-19.

Compliance with health measures

  1. The Subjects must comply with the measures issued by the National Executive and the World Health Organization, including, but not limited to: using masks, maintaining social distancing of 1.5 mt. (4.92 ft.), take the temperature of persons who enter installations, and that all persons must use antibacterial gel when entering installations, among others.
  2. The Subjects must also implement hygiene, disinfection and cleaning measures in their installations, especially in spaces of major human use (e., elevators, restrooms, sinks and doors).

Non-present customer service guarantee

The Subjects must continue facilitating the use of electronic methods of communication between employees and clients (e., emails, social media, video calls, video conferences, telephones), and promote efficient telework methods, to reduce massive assistance to administrative offices.

Exceptions

The Subjects in municipalities under special regime, such as those located in frontiers with other countries, are not subject to the 7+7 easing period.

Strict quarantine period

Suspension period

Starting from Monday, June 22, 2020, the strict quarantine period will begin for seven continuous days, according to the measures issued by the National Executive.

Suspension of direct-contact activities

During the strict quarantine period, the Notice suspends direct-contact activities of customer service to the public, investors and companies that issue securities. Therefore, the Subjects must work remotely and electronically to attend the public, investors and companies that issue securities.

Customer service guarantee

To guarantee customer service to users during the strict quarantine period, the Subjects must guarantee that their electronic platforms and technological solutions maintain their continuity and working methods to issue, negotiate, place, take custody, transfer and liquidate securities.

The National Executive approved on June 20, 2020, new prevention measures to mitigate the spread of COVID-19 in 10 states, including the Capital District.  In this sense, the NSS issued a statement on June 21, 2020[2] in which it reiterates the guidelines of the Notice in the section “Strict quarantine period“.

Spanish version

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[1] The NSS issued the Notice based on articles 3, 94 and 98 of the Decree with Rank, Value and Force of the Securities Market Law (Official Gazette No. 6,211 of December 30, 2015), articles 9 and 12 of the Decree No. 4,198 that declares the State of Alarm (Official Gazette No. 6,535 of May 12, 2020) and by virtue of the incorporation of the securities sector into the Easing Measures of the National Quarantine Plan (7+7).

[2]V. Statement of the NSS of June 21, 2020 at: https://twitter.com/Sunaval_Oficial/status/1274769844425175042, consulted on June 22, 2020.

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Author

José P. Barnola Jr. joined Baker McKenzie in 1996 and became partner in 2003. He is a senior member of the Venezuela tax practice group and counsel of the tax practice group in Mexico, and has extensive experience in tax advice, transactional tax and tax litigation. José has authored over 30 legal articles on several legal and tax issues published in Venezuela, United States, Canada and México (see list in https://www.linkedin.com/in/josepbarnolajr/) and has over 18 years' experience as tax law professor. He has written and spoken on investment protection and tax planning, cross-border distribution activities, corporate reorganizations, VAT, tax litigation, employee taxation and other hot topics of the Venezuelan tax system. Since 2018, José has been based in Baker McKenzie's office in Mexico City on a special temporary assignment, where he provides complex planning and transactional investment protection and tax advice, especially for the oil and gas industry, as well as tax litigation. José is the Latin America representative in Baker McKenzie's Tax Dispute Resolution Global Steering Committee, in charge of designing and implementing the global, regional and local strategic plans of the Firm.

Author

Jesús Dávila joined Baker McKenzie in 2002 and became partner in 2009. He is recognized as a leading lawyer in Venezuela by Chambers Latin America and IFLR1000. Jesus advises domestic and multinational companies on the full scope of corporate transactions, including mergers, acquisitions, takeovers, joint ventures and a variety of other corporate work. He has a strong track record providing insightful advice to companies on matters of antitrust, foreign investment and technology transfer, IT/Communications, and trade and commerce. Jesus has been a professor in various renowned universities in Venezuela.

Author

Maria Celis joined the Firm in 1997 and became partner in 2008. She has 20 years of experience working in corporate, mergers and acquisitions, joint ventures, telecommunication, real estate and anti-trust matters, and works with important national and international companies on corporate reorganization and M&A matters. She heads the Venezuela office Diversity & Inclusion committee and she was awarded as a highly commended lawyer in the category “Gender Diversity Lawyer of the Year Venezuela” by Chambers and Partners in the Latin America Awards 2019. In addition, she is member of the Sustainability committee of the Venezuela office and represents Venezuela in the Real Estate and M&A Latin America Steering Committees.

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