He announced the creation of a department for the specialized supervision of the fiduciary market.
SANTO DOMINGO– In the Dominican Republic, there are 1,200 trusts with assets exceeding RD$311 billion, reported the Superintendent of Banks, Alejandro Fernández W., yesterday, who considered that "the trust sector must operate in line with the best practices of governance and transparency."
Speaking at the opening of the XXXII Latin American Trust Congress (COLAFI), held in the country, the official stated that "the trust sector must operate in line with best practices in governance and transparency, aspects of utmost importance for the administration of trusts.".
Fernández W. announced the creation of a department for the specialized supervision of the fiduciary market. "This project has benefited from high-level advice, primarily from the support of Colombian experts with extensive experience in the sector, especially regarding the implementation of the risk-based supervision model," he explained.
He added that the agency has sufficient resources, including: staff training, issuance of supervision guidelines, a fiduciary accounting manual, periodic information requirements, supervision programs, and the development of an information platform for internal and public analysis.
He said that of the 29 trust companies established and registered with the General Directorate of Internal Taxes (DGII), four are supervised by the Superintendency because they are subsidiaries of banking groups, not including a savings and loan association that also provides trust services.
Fernández W. noted that, in its first 12 years of existence, the fiduciary sector "has had a significant impact on the stock market, the financial system and the real economy.".
He reported that in the case of investment funds, the Superintendency of the Securities Market (SIMV) has registered twelve Investment Fund Management Companies (SAFI) that managed 67 funds, with 183,726 million pesos in net worth.
He explained that as of October 31, these funds had 36,943 contributors, according to SIMV reports.
In addition, there are seven publicly offered trusts, divided into three fixed-income and four variable-income trusts. "This includes the RD Vial trust, with 24.6 million pesos in circulation.".
He highlighted the existence of a regulatory framework, including the Public Trust Law, which has contributed to the development of the capital market, as it has regulated investment funds, publicly offered trusts and securitizations.
The Superintendent referred to the commitment to integrity and responsibility that rests with trustees, especially in the management of the projects and resources under their care. "These values significantly impact the risks associated with this role, with reputational risk being particularly important. Likewise, it is crucial to have adequate communication between the parties when establishing a trust, so that they understand the structure and its operation, and properly assess the inherent risks," Fernández W. emphasized.
He said that the Superintendency is working to bring greater clarity to the normative and regulatory aspects, accompanying them in the implementation of new technological tools that allow the correct administration of assets.
They assess the potential to boost productive sectors and promote economic development
Trusts are an ideal instrument to promote productive sectors and provide solutions aimed at encouraging economic growth in the Dominican Republic and other Latin American countries, agreed state authorities and representatives of the local and regional banking sector, gathered at the meeting.
The event is organized by the Dominican Republic's Multiple Banking Association (ABA) and the Latin American Banking Federation, whose representatives reflected on the role that trusts can play as an engine for development, taking advantage of new business trends for this purpose.
Rosanna Ruiz, president of the ABA, expressed that the intention is to join forces between banks, trusts, fintech companies and other economic actors in order to take advantage of the potential that this legal figure has for the Dominican Republic and other countries that have limited resources to finance infrastructure, incentivize sectors such as tourism, agriculture and MSMEs.
Meanwhile, Giorgio Trettenero, Secretary General of FELABAN, emphasized the need for greater regional integration. He specified that per capita income in the region has only grown by 0.18% between 2014 and 2022, which "is insufficient to address the challenges of income inequality, poverty, and vulnerability faced by the vast majority of the population. Without economic growth, without income, it will be difficult to stimulate the creation of new businesses, generate employment, and improve the well-being of the population," he stated.
