Decree No. 119-16 Modifying Various Articles of Decree No. 664-12 Approving the Regulations for the Application of the Securities Market Law

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Decree No. 119-16 Modifying Various Articles of Decree No. 664-12, Which Approved the Regulations for the Application of the Securities Market Law, No. 189-11. Official Gazette No. 10834 of March 21, 2016. DANILO MEDINA President of the Dominican Republic NUMBER: 119-16

CONSIDERING: That the Constitution of the Dominican Republic establishes that the economic regime is oriented towards the search for human development and is based on economic growth, wealth redistribution, social justice, equity, social and territorial cohesion, and environmental sustainability, within a framework of free competition, equality of opportunity, social responsibility, participation, and solidarity.

CONSIDERING: That the evolution of other countries in the region has proven that economic growth is closely linked to the development of the securities market, since it contributes to increasing the flow of resources towards the productive sectors of the economy and minimizing systemic risk, thereby generating greater wealth and jobs in the country; therefore, it is necessary to expand the range of instruments and publicly offered securities that can be traded in said market as an investment alternative.

CONSIDERING: That the regulation of the Dominican Republic must ensure the country's financial stability and contribute to a healthy economic expansion.

CONSIDERING: That the Law for the Development of the Mortgage Market and Trusts in the Dominican Republic, No. 189-11, of July 16, 2011, added figures to the securities market that, among other reasons, made it necessary to modify its regulatory framework, to make effective the use of these figures, which will allow achieving the purpose for which said law was created.

CONSIDERING: That the figures of separate and autonomous estates must be organized and adapted in their different forms and applications, in order to develop effectively in the Dominican market.

CONSIDERING: That the General Law on Free Access to Public Information No. 200-04, of July 28, 2004, and its Implementation Regulations, approved by Decree No. 130-05, of February 25, 2005, establish the mechanism for public consultation of draft regulations to be adopted, in order to gather observations from interested sectors.

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CONSIDERING: That in this regard, the proposal for modification to the Regulations for the Application of the Securities Market Law, No. 19-00, received observations of form and substance during the public consultation period, comprising between February 3 and February 17, 2016, formulated by the Association of Stock Exchanges of the Dominican Republic Inc. (APB); the Stock Exchange of the Dominican Republic S.A. (BVRD); the BHD León Financial Center, S.A. and the Association of Dominican Trustees, Inc. (ASOFIDOM), which were duly analyzed and weighed by the convening authority.

CONSIDERING: That regarding the substantive observations formulated to the proposal for modification to the Regulations for the Application of the Securities Market Law No. 19-00, during the public consultation period, the following were accepted.

a) Termination and Liquidation: The liquidation of obligations (trust securities) should not entail the liquidation of the trust itself and the circumstances under which prior approval from the Securities Superintendence is not necessary for liquidation.

b) Hedging Mechanisms: The public offering of trust securities may have external or internal hedging mechanisms, which must be clearly identified in the constitutive act or in the emission program contract, the offering prospectus, and the primary placement notices.

c) Issuers: Trust securities will be issued by an authorized society against the assets of the previously constituted trust.

VIEWING: The Constitution of the Dominican Republic, voted and proclaimed on June 13, 2015.

VIEWING: Law No. 19-00, of May 8, 2000, which regulates the Securities Market in the Dominican Republic, and its Implementation Regulations, issued by Decree No. 664-12, of December 7, 2012.

VIEWING: Law No. 189-11, of July 16, 2011, for the Development of the Mortgage Market and Trusts in the Dominican Republic.

In exercise of the powers conferred upon me by Article 128 of the Constitution of the Republic, I decree the following:

DECREED

ARTICLE 1. Subsection hh) of Article 6 of Decree No. 664-12, of December 7, 2012, is modified so that hereafter it provides as follows:

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"hh) Trust Securities: These are those publicly offered securities issued by an authorized society backed by publicly offered trusts previously constituted for that purpose, in accordance with what is established in Law No. 19-00 on the Securities Market; Law No. 189-11, for the Development of the Mortgage Market and Trusts in the Dominican Republic, these Regulations, and the general nature norms established by the Securities Superintendence.".

ARTICLE 2. Subsection d) of Paragraph I of Article 470 of Decree No. 664-12, of December 7, 2012, is modified so that hereafter it provides as follows: "d) Obtaining the purpose of the trust.".

ARTICLE 3. Paragraph II of Article 470 of Decree No. 664-12, of December 7, 2012, is modified so that hereafter it provides as follows: "Paragraph II. The liquidation of a publicly offered trust securities trust for the causes indicated in subsections a), b), and c) of this article, will proceed with the prior approval of the Superintendence, pronounced through a motivated administrative resolution.".

ARTICLE 4. Article 482 of Decree No. 664-12, of December 7, 2012, is modified so that hereafter it provides as follows: "Article 482. Trust Securities. Publicly offered securities issued by an authorized society against the assets of a trust are called "Trust Securities". Trust securities may be of the following types:

a) Participation Securities. Those that represent rights or aliquot parts of participation in the assets of the trust, do not have a fixed yield, but their yield is the result of the profits or losses generated by the trust.

b) Debt Representative Securities. Those that incorporate the right to receive the restitution of the invested capital and the corresponding financial yields, under the terms and conditions indicated in the respective security.

Paragraph I. The particular characteristics of the securities and the modalities indicated in the previous subsections must be clearly identified in the constitutive act of the trust, in the emission program contract, and in the offering prospectus.

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Paragraph II. In the event that the public offering of these securities is to be carried out by financial intermediation entities authorized for such purposes and governed by the Monetary and Financial Law, the provisions established in Law No. 189-11, regarding the authorization regime of the Banking Superintendence, and any other that the Superintendence establishes through general nature norms, will apply additionally and priorly.

Paragraph III. The trust securities referred to in this article will be issued by an authorized society against the assets of the previously constituted trust, granting to the investors who acquire them the rights established in the respective security, whether of participation or debt.

Paragraph IV. In the offering prospectus of the trust securities, without prejudice to what is established by the general nature norms issued for this purpose by the Superintendence, at least the following information must be indicated:

a) Corporate name of the trustee.

b) Domicile and signature of the legal representative or attorney-in-fact of the trustee acting on behalf of the trust.

c) Identification of the trust to which the securities correspond.

d) Amount of the offering or emission program and of the trust securities and type to be issued.

e) Date and number of the resolution of the Superintendence through which the public offering of the trust securities was authorized.

f) Term of validity of the emission program and of the trust securities to be issued.

Paragraph V. The offering prospectus must prominently include the following legend: "The trustee will not be liable with its assets for the obligations incurred in the execution of the trust. These obligations will be satisfied exclusively with the trust assets, as provided in Law No. 189-11.".

ARTICLE 5. The following Article 470-Bis is added to Decree No. 664-12, of December 7, 2012: "Article 470-Bis. Hedging Mechanisms. The public offering of trust securities may have external or internal hedging mechanisms as established by the Securities Superintendence through general nature norms. These mechanisms must be clearly identified in the constitutive act or in the emission program contract, offering prospectus, and primary placement notices.

Paragraph. The hedging mechanisms constitute the backing in favor of investors in the presence of any risk, event, or accident that could affect the cash flow of the transferred goods or assets or of the operation itself of the publicly offered trust.".

ARTICLE 6. Send to the Securities Superintendence, for its knowledge and appropriate purposes.

GIVEN in the city of Santo Domingo de Guzmán, National District, capital of the Dominican Republic, on the two (2) days of the month of March of the year two thousand sixteen (2016); years 173 of Independence and 153 of Restoration.

DANILO MEDINA

Decree No. 120-16 Designing Messrs. Wilfredo Reyes, Brígido Perdomo, and Dilania Mateo, Consular Assistants of the Consulate of the Dominican Republic in Antwerp, Kingdom of Belgium, and Amsterdam, Netherlands, respectively. Official Gazette No. 10834 of March 21, 2016.

DANILO MEDINA President of the Dominican Republic NUMBER: 120-16

In exercise of the powers conferred upon me by Article 128 of the Constitution of the Republic, I decree the following:

DECREE:

ARTICLE 1.- Mr. Wilfredo Reyes, is designated Consular Assistant of the Consulate of the Dominican Republic in Antwerp, Kingdom of Belgium.

ARTICLE 2.- Mr. Brígido Perdomo, is designated Consular Assistant of the Dominican Republic in Amsterdam, Netherlands.