Technical Standards for the Authorization and Operation of Subordinated Private Alternative Investment Funds

Alameda Juan Pablo II, between 15 and 17 Av. Norte, San Salvador, El Salvador. Tel. (503) 2281-8000 www.bcr.gob.sv Page 1 of 17 CNBCR-10/2025 NDMC-39 TECHNICAL STANDARDS FOR THE AUTHORIZATION AND OPERATION OF SUBORDINATED PRIVATE ALTERNATIVE INVESTMENT FUNDS Approval: 12/17/2025 Validity: 01/02/2026

THE COMMITTEE OF NORMS OF THE CENTRAL RESERVE BANK OF EL SALVADOR, CONSIDERING: I. That Article 5, second paragraph, of the Law on Alternative Private Investment Funds establishes that it is the responsibility of the Central Bank of El Salvador, through its Committee of Norms, within its scope of competence, to issue the necessary technical standards to allow the operation of PAIFs and Administrating Societies. II. That Article 12, first paragraph, of the Law on Alternative Private Investment Funds establishes that prior to the authorization of a fund and up to one year after the liquidation of the Administrating Society, the latter must constitute and maintain at all times a guarantee based on the assets of the Alternative Investment Funds it manages, for the benefit of its investors, to guarantee the fulfillment of all its obligations. III. That Article 29 of the Law on Alternative Private Investment Funds establishes that the Superintendence will authorize or not the operation of a subordinated PAIF, according to the procedure established in the Technical Standards issued for this purpose by the Central Reserve Bank of El Salvador, through its Committee of Norms. IV. That Article 30, fifth paragraph, of the Law on Alternative Private Investment Funds establishes that, upon presentation of the authorization request with the information required by said Law, the Council of the Superintendence of the Financial System will have a period of up to thirty calendar days to review the content of the presented documents and authorize in the same act the constitution and start of operations of the PAIF. V. That Article 63, second paragraph, of the Law on Alternative Private Investment Funds establishes that the Administrating Society and the respective Alternative Funds will be subject to legal provisions on the prevention of money laundering and asset laundering, terrorism financing, and proliferation of weapons of mass destruction, as well as others related to the compliance of their tax obligations or investigation of criminal activities.

THEREFORE,

in virtue of the normative powers conferred by Article 99 of the Law on Supervision and Regulation of the Financial System,

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AGREES to issue the following:

TECHNICAL STANDARDS FOR THE AUTHORIZATION AND OPERATION OF SUBORDINATED PRIVATE ALTERNATIVE INVESTMENT FUNDS

CHAPTER I OBJECT, SUBJECTS, AND TERMS

Object Art. 1.- These Standards aim to establish the requirements and procedures that interested parties must fulfill to obtain authorization for the constitution of a Subordinated Private Alternative Investment Fund, as well as for their operation, including provisions for the presentation of requests for authorization of internal regulations and information prospectuses.

Subjects Art. 2.- The subjects obligated to comply with the provisions established in these Standards are the Administrating Societies of Alternative Private Investment Funds, interested in receiving authorization for the constitution and operation of a Subordinated Private Alternative Investment Fund.

Terms Art. 3.- For the purposes of these Standards, the terms indicated below have the following meaning: a) Central Bank: Central Reserve Bank of El Salvador; b) Quotas: Participation quotas, which express the contributions of participants in a Subordinated Private Alternative Investment Fund, in accordance with Article 27 of the Law on Alternative Private Investment Funds; c) Identity Document: Refers to the Unique Identity Document, Minor's Card, Passport, or Resident Card, as applicable; d) PAIF: Alternative Private Investment Funds (PAIF, by its acronym in Spanish); e) Sophisticated Investor: In accordance with Article 4 of the Investment Banks Law, these are natural or legal persons, national or foreign, to whom the Administrating Society of Alternative Private Investment Funds or Fixed Capital Investment Society are authorized to offer their services, which must meet the criteria established in said article; f) Board of Directors: Collegiate body or equivalent body, responsible for the administration of the Administrating Society of Alternative Private Investment Funds, with functions of supervision, direction, and control; g) Law: Law on Alternative Private Investment Funds; h) Participant: Investor in a subordinated PAIF; i) Subordinated PAIFs: In accordance with Article 3 of the Law on Alternative Private Investment Funds, these are PAIFs that are constituted through the contributions or assets of investors who are delivered to an Administrating Society with the purpose that this manages them exclusively for the benefit of these same investors; j) Information Prospectus: Information prospectus of a subordinated PAIF that contains at least what is established in Article 32 of the Law on Alternative Private Investment Funds; k) Internal Regulation: Document that contains all the specific characteristics and rules governing the operation of a certain PAIF, in accordance with Article 31 of the Law; l) Administrating Society: Administrating Society of Subordinated Private Alternative Investment Funds; and m) Superintendence: Superintendence of the Financial System.

CHAPTER II GENERAL PROVISIONS ON SUBORDINATED FUNDS

Constitution of a PAIF Art. 4.- A subordinated PAIF will be constituted by the set of contributions from various investors, who will be called participants, which will be administered by an Administrating Society, at the account and risk of the same. The value of the participants' contributions, as well as any type of return they receive, will be directly related to the financial result of the PAIF's assets.

The subordinated PAIF is the exclusive property of the participants, being an independent patrimony different from that of the Administrating Society, which is characterized by a certain level of diversification of its investments according to the investment policies established in the internal regulation.

PAIF Quotas Art. 5.- Each subordinated PAIF will be expressed in quotas, in order to determine the share corresponding to each of the participants within its patrimony. When one or more quotas belong jointly to several persons, the co-owners will be obliged to designate one of them to act on their behalf before the Administrating Society, in the quota participation contribution contract. Subordinated PAIF quotas may be fractionated to facilitate their contribution or redemption, being the minimum number of quotas that a participant can have at all times, that established in the internal regulation and in the information prospectus, if so defined.

The value of the quota and the value of the assets of the subordinated PAIF may be calculated using procedures and methodologies established by the Administrating Society, based on international best practices, which they must make known to the Superintendence.

Accreditation of the Sophisticated Investor Art. 6.- The Administrating Society must have a process that accredits the category of Sophisticated Investors of its interested participants, for which it must consider and document through the means established in Article 33 of the Law.

Due Diligence and Procedures on Prevention and Control of Money Laundering Art. 7.- The Administrating Society must adopt policies, mechanisms, and control measures to comply with the obligations established in the laws, instructions, and current regulations related to the prevention, detection, and control of money laundering, terrorism financing, and financing of the proliferation of weapons of mass destruction. The Administrating Society must have policies and procedures to perform due diligence for the identification and knowledge of its sophisticated investors, as well as the origin of the funds and their economic activity, in accordance with what is established in the laws, instructions, and current regulations related to the prevention, detection, and control of money laundering, terrorism financing, and financing of the proliferation of weapons of mass destruction.

Identification of Participants Art. 8.- The Administrating Society, for the purposes of marketing its quotas, will be responsible for the identity and legal capacity of the participants, for which it may prepare forms, which may be placed in electronic media defined by the entity, in which the corresponding information for each of the participants will be included, which will contain at least the following information: a) Place and Date; b) Assigned code; c) Name, nationality, denomination, or corporate name; d) Tax Identification Number (TIN), which will be in accordance with what is established by the Tax Administration, when applicable; e) Type and number of identity document; f) Address and telephone number of residence and office; g) Occupation and place of work; h) Nature or business of the entity, legal representative with their identification documents and respective signature, when applicable; i) Name of the PAIF in which they wish to subscribe to quotas; j) Amount of the contribution;

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k) Persons authorized to order operations on their behalf, specifying their general information; l) Method to settle operations in favor of the participant: credit to account, electronic transfer (specify bank account number), issuance of checks; m) Medium (physical or electronic), for the transmission or consultation of the following information: Movements related to the contribution quota or account statements, information regarding modifications to the internal regulation, the information prospectus, and quota contribution contract, among others; n) Name of the designated beneficiaries, so that, upon their death, they are delivered to them; o) Other data deemed convenient; and p) Signature of the participant or another means that guarantees their consent. The Administrating Society must obtain copies of the participant's identity document and Tax Identification Number (TIN), when applicable, and of the persons authorized to order operations on their behalf, document that accredits the legal representative or attorney-in-fact, the deed of constitution of the legal person, and all that information that in the judgment of the Administrating Society must form part of the participant's file, in addition to having a signature registration form for each of its participants, including for the persons authorized to order operations on behalf of the participant.

Quota Contribution Contract Art. 9.- For the purposes of establishing the conditions that will govern the relationship between the participant and the Administrating Society, a quota contribution contract must be prepared for each PAIF they administer, for every participant who acquires quotas of a PAIF for the first time. Said contract must be signed by the Administrating Society and the participant, once the identification of said participant has been carried out and their status as a Sophisticated Investor has been accredited. Said contract must contain at least the following information: identification of the Administrating Society and participant; denomination of the PAIF to which the contributions are made; amount of contribution and value of the quota; responsibility and obligations of the Administrating Society with the participant; rights and obligations of the participant; rules regulating the operation of the PAIF; designated beneficiaries; indication of the participant who will be responsible in case of co-ownership, when applicable; Commissions and expenses to be charged; Indication on the procedure to resolve controversies; among other aspects that the Administrating Society considers relevant. In the contract, a clause must be included indicating that the internal regulation and the information prospectus contain the conditions that will govern the Administrating Society in the administration of the PAIF.

Quality of Participant Art. 10.- The quality of participant is acquired when: a) The participant's contribution is credited in the PAIF's account; b) Accounting transfers of the quotas represented in the Administrating Society's records are made; c) The quotas are registered in the name of the beneficiaries in the participant register, in the case of the death of the holder; applying what is established in Articles 7 and 8 of these Standards; or d) Judicial allocation is made. When the contribution is made by check, it will be considered that the client acquires the quality of participant when the contribution is definitively applied in the PAIF's bank accounts, that is, when the contribution is confirmed. The quality of participant in a PAIF is lost when they carry out the total redemption of their participation.

Extract of the Internal Regulation Art. 11.- The Administrating Society must prepare an extract of the internal regulation, which will form part of the internal regulation. The regulation extract must contain at least the following information: a) Denomination of the Administrating Society and relevant aspects thereof; b) Denomination of the PAIF; c) Definition of the different categories of participants within the PAIF, if they exist, and the objective criteria for their classification; d) Investment policy of the resources, diversification of investments, liquidity of assets, and indebtedness; e) Commissions that the Administrating Society will charge the PAIF and the participant, expressed as percentages or amounts; f) Expenses that will be charged to the PAIF, detailing their concepts; g) Rules for the subscription and redemption of participation quotas, deadlines for redemption payment, specifying the reasons that give rise to the right to redemption, when applicable; h) Form and periodicity of conversion of contributions and redemption of participation quotas; i) Obligations and rights of participants in the PAIF; j) Information that will be delivered to participants; and k) Other information that the Administrating Society considers important.

Participant Register Art. 12.- In accordance with Article 34, second paragraph, of the Law, the Administrating Society will keep a register of the participants' contributions in the subordinated PAIFs, which may be kept through electronic systems that allow leaving a record of operations that have an effect on its content and maintain permanent historical information regarding the operations registered in said register.

Internal Control in the Administration of the PAIF Art. 13.- The Administrating Society, regarding the administration of PAIFs, must define internal control policies and procedures that contemplate at least the following aspects: a) Administer separately the PAIFs offered to participants. In each PAIF, the bank accounts used and the cash movements thereof must be specified. The balances of the bank accounts must reflect at the close of the day the balance corresponding to each of the PAIFs, and their bank movements will correspond exclusively to the operations of the PAIF and its participants; b) Reconcile daily in each of the administered PAIFs the balances of securities and the associated money, considering for such purposes their internal records and external sources; c) Administer the PAIFs in accordance with what is established in the internal regulation and information prospectus; d) Establish within their procedures the controls that document the receipt of movements related to the contribution quota or account statements that must be sent monthly to each participant physically or electronically according to the request made by the participant, for the case of subordinated PAIFs; e) Establish controls for the identification of contributions and the participants who make deposits in each Fund; f) Register the operations of the PAIF, in accordance with the accounting policies defined by the Administrating Society; g) Comply with the internal control procedures approved by its Board of Directors regarding the administration of the PAIF, especially regarding risk management, investments, cash, marketing, calculation of the quota value, conversion of contributions, and redemption; h) Have a file for each participant, which contains: identification form with investor information, copy of investor information documentation, quota contribution contract, investor profile, signature registration form with the names and signatures of the persons authorized to issue instructions on behalf of the participant; i) Disclose any essential fact or information regarding the Funds they administer in accordance with what is established in the Law; j) Adopt policies, mechanisms, and control measures to comply with the obligations established in the laws, instructions, and current regulations related to the prevention, detection, and control of money laundering and asset laundering, terrorism financing, and financing of the proliferation of weapons of mass destruction; and

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k) Deliver to participants the documents that prove the contributions or redemptions made, when applicable.

Commissions and Expenses Art. 14.- Administration commissions and other necessary expenses will be charged to each PAIF, and commissions may be established to be charged to participants. Commissions will be expressed as percentages or amounts, and in the case of expenses, their concepts will be clearly detailed, in accordance with Article 18 of the Law. The Administrating Society cannot charge commissions higher than those established in the internal regulation and in the information prospectus of a PAIF, so the initial commission percentage and any modification thereof must be known to the participant prior to its entry into force.

CHAPTER III AUTHORIZATION OF PAIFs

Request for Authorization of the Subordinated PAIF Art. 15.- For the authorization of a Subordinated PAIF, the legal representative or attorney-in-fact of the Administrating Society must present to the Superintendence a request accompanied by the following documentation: a) Certification of the agreement of the Board of Directors of the Administrating Society, in which the constitution of the PAIF was agreed upon, as well as the approval of the internal regulation and the information prospectus; b) The Internal Regulation, which must include the minimum content established in Article 31 of the Law; c) Information prospectus of participation quotas, which must include the minimum content established in Article 32 of the Law; d) Project of the documents related to the constitution of the PAIF guarantee according to its nature; e) Certification of the agreement of the Board of Directors of the Administrating Society in which the entity that will be the representative of the beneficiaries of the guarantee is designated; f) Acceptance of the entity as representative of the beneficiaries of the guarantee; g) List of investors or participants who hold a participation equal to or greater than twenty-five percent of the social capital, attaching their general information. If it is a natural person, they must present the following: i. Full name; ii. Nationality and domicile; iii. Copy of the Unique Identity Document, in the case of Salvadoran persons; iv. Copy of the Tax Identification Number, which will be in accordance with what is established by the Tax Administration, when applicable; v. Certified copy of passport, in the case of foreigners; vi. Current certificate issued by the General Directorate of Penal Centers stating no criminal record. In the case of foreign shareholders, they must present the document that accredits that they do not have a criminal record or equivalent, issued by the competent authority in their country of origin; vii. Information that evidences the origin of funds for the acquisition of shares. If it is a legal person, they must present the