Legal process for issuing securities in the Dominican Republic: requirements and stages

The Stock Market represents an attractive alternative for companies to access financing at a lower cost and diversify their sources of capital, all within a regulated and transparent environment.   

In the Dominican Republic, the stock market is regulated by the Superintendence of Securities Markets (SIMV), under Law No. 249-17 on the Securities Market.  

The SIMV is responsible for the authorization and registration of any public offering in the country, evaluating the documents and information required by the regulations and its instructions to authorize or reject such application. 

Below is a step-by-step on how a company can issue bonds, shares, or other securities in the local Dominican market. 

General requirements  

The requirements for authorizing a public offering will be established by regulation, by type of instrument or issuer. As a general rule, any company interested in issuing securities in the market must: 

• Request their official registration in the Securities Market Registry, which contains the entities and persons authorized by the SIMV to operate in the market, as well as public information on the securities registered. 

Required corporate structure 

For a company to make a public offering in the Dominican stock market, it must be incorporated under one of the following forms: 

1. Corporation
2. Foreign Corporations 
3. Limited Liability Company (SRL) and Simplified Public Limited Company (SAS), only as issuers of fixed-income securities. 

Required documentation 

The requirements will be established according to the corporate structure and the complexity of the value being offered. However, it is essential that issuing companies have the following documentation: 

1. 1. Articles of incorporation of the company (in force) 
   2. Current Company Financial Information 
   3. Responsible or representative of the company, who must under oath state that the information presented for the public offering is reliable. 

It should be noted that all the financial information of the registered issuers is public and can be consulted through the SIMV portal. 

Documents required for registration 

In order for an issuer or offeror to opt for this authorization from the Superintendence, it must provide the following documents and information to be registered in the Securities Market Registry:  

1. Details of the issues and securities to be offered, including corporate and financial information, the characteristics of the securities, guarantees and the corresponding issuance prospectus. 
2. Acts, facts and documents related to the public offering, except those classified as confidential. 
3. Periodic information and relevant events related to the offer. 
4. Information on shareholding in listed companies, including: 

a.Shareholders who directly or indirectly hold 10% or more of the capital. 

b.Transactions on shares of the members of the Board of Directors and general attorneys. 

c.Transactions for the purchase and sale of treasury shares. 

The prospectus 

All companies, whether public or private, that wish to make a public issuance of securities, must create a placement prospectus.   

The prospectus is the public written document of any public offering, which contains the specific characteristics of the securities being offered, and in general the relevant data and information regarding the issuer and the participants in the public offering process.  

The prospectus must contain: 

1. Responsible for the content 
2. Issuance and Tender Offer Securities Program 
3. General information about the issuer and its performance 
4. Risk factors for issuance 
5. Financial background of the issuer  

Review Deadlines 

Once the formal application with all the documents has been submitted, the SIMV has 25 working days to issue a decision. 

If the application is incomplete or additional documents are required, the SIMV will notify the applicant within 15 business days from the day following the initial receipt. 

Publication of the prospectus for the issuance of the tender offer and any other relevant facts 

After the SIMV authorizes the public offering, the publication of a primary placement notice will be required, which must be published in at least one newspaper of national circulation, one business day prior to the beginning of the placement period. It can also be published on the issuer’s website.  

Statistical information 

The placement agent must submit to the SIMV information on the result of the public offering for statistical purposes, within 10 business days from the closing date of the placement period or the completion of the placement of a corresponding issue or tranche. 

In summary, issuing securities in the Dominican Republic’s stock market can be an excellent strategy for companies to obtain financing through regulated instruments, ensuring transparency and access to a broad investor base. However, this process is subject to strict regulation by the Superintendence of the Securities Market, which implies complying with specific requirements in terms of documentation, auditing, and established deadlines. 

It is essential that companies interested in this type of financing seek advice from professionals with experience in the stock market, to ensure compliance with all regulations and maximize the success of the issuance.  

At Pellerano & Herrera, we have a team of lawyers specialized in the securities market, who can guide your company in every step of the process, from the preparation of the documents to obtaining the authorization of the SIMV.Si you are considering making a public issuance of securities or have doubts about the legal and regulatory requirements.  Do not hesitate to contact us.