Published and draft legislation - Colombia

Specialist Electronic Payment and Deposit Companies

Act 1735, 21st October 2014

As the first issue of this publication went to press, the Congress in Colombia held the final reading of the Bill 181-S/2014, debating the final details regarding Specialist Electronic Payment and Deposit Companies, known as Sociedades Especializadas en Depósitos y Pagos Electrónicos or SEDPES. On 21st October 2014 it passed Act 1735/ 2014, setting forth measures to promote access to transactional financial services and establish other provisions.

This act creates the figure of SEDPES, defining them as financial institutions with the exclusive mission of: i) Raising funds through electronic deposits; ii) Making payments and transfers; iii) Taking loans inside and outside the country for the specific purpose of funding their transactions; and iv) Sending and receiving  money orders.

Some significant changes were brought into the text as it went through parliament, although the bill maintained its core purpose of creating new financial service companies with an exclusive mission, whose constitution would be subject to less demanding requirements.

The act makes it clear that SEDPES are not allowed to grant any kind of credit. They must comply with all provisions applicable to the entities under the oversight of the Superintendencia Financiera, with respect to money laundering and the financing of terrorism.

The SEDPES may be constituted by any individual or organisation, including operators of postal services and providers of telecommunication services and networks, as well as public home services, following verification of certain conditions. The act incorporates the possibility of financial-service companies holding an interest in SEDPES’ equity. It includes provisions empowering SEDPES to provide their financial services through correspondent institutions. And finally, recognising that a large percentage of the users of such entities will be of limited resources, it establishes that the transactions carried out in SEDPES’ deposits will be exempted from the tax on financial movements¹.

The final version of the bill tackles the issue of data protection and processing, establishing that a SEDPE may exchange data-base information within its group holding.

In summary, several aspects of importance came up during the parliamentary debate. Those mentioned were timely inclusions to achieve a more suitable regulatory framework for these new types of entities.

¹ The tax on financial movements (Gravamen a los Movimientos Financieros or GMF) is a national tax in Colombia on transactions made on some financial products (current accounts, savings accounts in certain cases, etc) and on certain financial transactions (credit disbursement, management cheques, debits to collective investment funds, some fx payments, etc). It is currently 40 basis points for each unit of value in the transaction.