During the 1990s, the Dominican Republic initiated the first wave of reforms to modernize the country’s legal system and the economic framework under which corporate vehicles operate in the country. The country’s goals were to: (i) promote the flow of foreign capital into the country; (ii) adapt the economy to international competition; and (iii) facilitate regional competition. This process is still ongoing, with a second wave having been initiated this decade to continue to modernize the legal system’s regulation of specific industries, such as the banking and monetary systems, including the strengthening of corporate governance, competition, and consumer protection. The main reforms that have taken place include new laws with respect to industrial property, intellectual property including copyright, exports, the environment, fiscal and customs reform, a special legislation to attract retirees and baby-boomers, trusts and the development of low cost real estate projects, money laun- dering, risk prevention in financial institutions, among others. Legislative measures relating to the entry into force of the DR-CAFTA also have been adopted, especially with respect to intellectual property protection. Social reforms have occupied a large part of the legislative agenda, including the country’s adoption of a Social Security law. Finally, the Dominican Constitution was amended recently with the goal of moderniz- ing the State and its organizational structure as well as essential regulations. The most significant reforms that have taken place over the last few years to promote the modernization of the Dominican economy and to protect local and foreign investment are discussed below.
SECURITIES MARKET Legislation regulating the securities market seeks to promote the development of the local stock exchange and to encourage the purchase and sale of securities in a secure, modern and transparent climate. The law establishes the legal framework defining what shall be considered a private placement of securities and regulating the pub- lic offering of securities, from their issuance to its placement in the market, the supervision of the various mar- ket participants and their operations. The law regulates self-regulated participants, such as the stock exchange, products markets, and securities intermediaries, as well as other market participants, such as clearing houses, centralized deposits of securities, rating agencies, investment funds, fund managers, mutual funds, and securi- tization companies. The law also establishes sanctions for violations of the rules by persons and participants in the securities market. Likewise, it creates the governmental entities in charge of supervising and regulating the system and its agents: the Securities Superintendence and the Securities National Council.