Dentons Cardenas & Cardenas advised Global X on the legal structuring of the first Fixed Income ETF in Colombia that will invest in Colombian public debt (TES Class B) to achieve investment results comparable to the J.P. Morgan GBI-EM Colombia Government Local Currency Index.

In addition, the ETF named GXTESCOL, will be traded on the Colombian Stock Exchange (BVC), and our client, Global X, will act as the professional manager, while the fund manager will be Fiduciaria Bogota, and J.P. Morgan will provide the benchmark index. Additionally, the ETF will have a liquidity provider.

The launch of the ETF on March 20, 2024, constitutes a true milestone in the Colombian capital market as it will allow investors, for the first time, to invest in shares of Colombian public debt securities with minimum values of approximately 15 dollars, thus energizing that market. It is noteworthy that the ETF started with an issuance of TES by the Colombian Ministry of Finance and Public Credit for approximately 50 million dollars.

The legal counsel provided by Dentons Cardenas & Cardenas encompassed the entire legal structuring of the ETF, including the preparation of the fund regulation and contracts between the various parties involved, as well as highly specialized financial regulatory advice, overcoming significant legal challenges due to the novelty of the product.

Pablo Jaramillo, partner of Dentons Cardenas & Cardenas and lead counsel for the transaction commented:

"We are very pleased to have assisted our client in this historic operation. Undoubtedly, this transaction marks a real milestone for the country’s capital market. The structuring of the first Fixed Income ETF in Colombia will surely contribute to the dynamization of Colombia’s capital market and will likely bring innumerable benefits, both in terms of future investments and in the traded amounts. This would not have been possible without the efforts and hard work of all the parties involved in this transcendental operation".

Dentons Cardenas & Cardenas core team included: (i) Pablo Jaramillo, partner; (ii) Antonio Rojas Mayol, associate; (iii) Rodrigo José De Vivero, associate; and (iv) Sofia García-Reyes, associate.

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