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Paraguay – Corporate Governance Standards Extension
Paraguay has expanded the scope of its Minimum Standards for Good Corporate Governance Regulation to include entities under Securities Superintendency supervision, as per Resolution No. 5, Minute No. 25 dated the 19th of June 2025.
This initiative reinforces regulatory oversight and elevates governance standards across financial institutions by bringing entities supervised by the Superintendency of Securities under the same governance standards previously applied to other financial institutions.
Key Changes
The Central Bank of Paraguay has extended its corporate governance regulation to encompass a broader range of financial service providers.
This expansion represents a crucial development in Paraguay’s financial regulatory framework by standardizing governance requirements across different types of supervised entities.
Applicability and Timeline
These requirements apply to all types of companies providing services that fall under the Superintendency of Securities regulatory scope, effective the 19th of June 2025.
The affected entities include:
- Brokerage Firms (Casas de Bolsa)
- Investment Fund Management Companies (Sociedades Administradoras de Fondos de Inversión)
- Stock and Commodity Exchanges (Bolsas de Valores y Productos)
- Central Securities Depositories (Cajas de Valores)
Required Actions
The regulation establishes specific guidelines across four key areas:
1. Board Responsibilities:
The board is responsible for the entity’s strategy, risk management, organizational culture and the overall oversight of corporate governance. It must ensure an adequate organizational structure and promote ethical conduct at all levels.
2. Control Culture and Ethical Conduct:
Entities are required to implement clear policies for the prevention of conflicts of interest, adopt codes of ethics and establish mechanisms for resolving internal conflicts.
3. Strategic Objectives and Corporate Values:
Entities must have a strategic framework approved by the board, aligned with their risk appetite, and ensure its communication and enforcement throughout the organization.
4. Information Technology:
Entities must establish adequate policies and structures for IT management with a particular focus on security, regulatory compliance and support for strategic decision-making.
Compliance Steps
Resolution No. 5/2025 provides that the Securities Superintendency will draft and publish both a Guide for the application of the Corporate Governance Regulation and a schedule for its implementation by entities registered with the superintendency.
Neither the Guide nor the schedule has yet been published, therefore entities registered with the superintendency are not currently required to take compliance actions.
Risks of Non-Compliance
Penalties for non-compliance as set out in the Corporate Governance Regulation range from public censure to fines, suspensions or revocation of the authorization to operate.
How Mercator® by Citco (Mercator) Can Help
For assistance with Paraguay’s corporate governance requirements or to learn more about Mercator’s comprehensive corporate secretarial services, please contact mercator@citco.com.
