Individuals and legal entities can sell and purchase foreign currency indirectly from any other individual or legal entity (except for the persons indicated below, as regards the purchase of foreign currency) through the negotiation in bolivars of securities denominated in foreign currency issued by any private sector issuer, whether domestic or foreign, which is listed in a regulated market and is subject to public offering.
The only exception to the above broad base of participants is that institutions from the banking, insurance and securities market sectors, savings funds, trusts, and reciprocal guarantee and venture capital entities and funds, cannot participate in those transactions as purchasers (indirectly) of foreign currency.
In order to conduct that negotiation in bolivars, individuals and legal entities must transact through a securities broker, regardless of whether the same is a member of a stock exchange or not, regulated by the securities market legislation or through the Bicentennial State Stock Exchange (an instrumentality of the Ministry of the People’s Power for Economy and Finance (Ministry of Finance)) (BPVB), and the actual transaction of negotiation in bolivars of the referenced securities denominated in foreign currency must be conducted by means of the BPVB.
Securities brokers, regardless of whether they are members of a stock exchange or not, must warrant the existence of the positions in securities or of the funds subject to the transactions referred here. For this purpose, they will require from their respective clients the temporary custody over the positions to be negotiated under those transactions. The settlement of the foreign currency acquired through these transactions will be made by crediting them to a Local Account in Foreign Currency. Based on the foregoing, each participant at these transactions must hold, prior to its participation, this type of account denominated in foreign currency.
The reference “implied exchange rate” of these transactions is as follows: (a) in the case of sales of the referenced securities, the DICOM exchange rate in force and effect on the date of the respective sale transaction, applied on the market value of the negotiated security or on the value that the parties freely agree to give to the security in the event the same has no market value, and (b) in the case of purchases of the referenced securities, the exchange rate indicated in (a) reduced by 0.25 per cent.
The operational aspects of these transactions are subject to the rules of the Office of the National Superintendent of Securities (SUNAVAL), which will establish the types and terms of authorized transactions, the mechanics for the settlement thereof, and the mechanisms for monitoring and control thereof. For its part, the technological platform for the processing of these transactions is subject to the operational rules of the BPVB, issued with the prior authorization of SUNAVAL and the prior approval of the Ministry of Finance and the BCV.