Venezuela's securities exchange commission has ordered dozens of brokerage firms to pay off loan contracts collectively worth roughly US$2 billion, part of a government effort aimed at preventing the companies from falling into financial trouble.
More than 100 brokerage firms must pay the holders of the contracts within 90 days and then stop trading them to comply with new rules approved by the securities commission, according to an announcement published in Monday's Official Gazette.
The exchange of loan contracts — similar to repurchase agreements, or "repos," that can be traded between banks, individuals and brokerage firms — was not previously regulated by government authorities.
Jose Grasso, director of economic consulting firm Softline Consultores in Caracas, said the measure would help authorities tighten regulations over brokerage firms with ties to private banks that suffered heavy loses before they were implicated in a banking scandal unfolded in December.
The scandal forced President Hugo Chavez's government to take over the management of more than a dozen banks and brokerage firms, citing alleged violations of banking laws.
The securities commission also announced Monday it would seize control of three brokerage companies — Primus Casa de Bolsa, Unicredito Sociedad de Corretaje and Unicapital Casa de Bolsa Productos Agricolas — to safeguard the country's financial sector.
The commission ordered another firm, Everest Financial Group, to suspend its operations.
© Copyright 2017 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.