Technical Standards for the Transfer, Merger, Dissolution and Liquidation of Private Alternative Investment Funds, Administrators and Fixed Capital Investment Companies

CNBCR-10/2025 NDMC-41
TECHNICAL STANDARDS FOR THE TRANSFER, MERGER, DISSOLUTION AND LIQUIDATION OF PRIVATE ALTERNATIVE INVESTMENT FUNDS, ADMINISTRATORS AND FIXED CAPITAL INVESTMENT COMPANIES Approval: 12/17/2025 Validity: 01/02/2026 Alameda Juan Pablo II, between 15 and 17 Av. Norte, San Salvador, El Salvador. Tel. (503) 2281-8000 www.bcr.gob.sv

THE NORMS COMMITTEE OF THE CENTRAL RESERVE BANK OF EL SALVADOR,

CONSIDERING:

I. That Article 5, second paragraph, of the Law on Private Alternative Investment Funds establishes that it is the responsibility of the Central Bank, through its Norms Committee, within its scope of competence, to issue the necessary technical standards that allow the operation of PAIFs and Administrators, regulating at least aspects such as the transfer, liquidation, and dissolution of Administrators and PAIFs, as applicable.

II. That Article 20, first paragraph, of the Law on Private Alternative Investment Funds establishes that the merger of Administrators requires prior authorization from the Administrators themselves and the Superintendence, and must be carried out in accordance with the standards established in the Commercial Code.

III. That Articles 21 and 58 of the Law on Private Alternative Investment Funds establish the cases in which the dissolution and liquidation of an Administrator or a SICAF, respectively, will proceed.

IV. That Article 26, third paragraph, of the Law on Private Alternative Investment Funds establishes that the minimum content of the transfer plan, as well as the guidelines that must be followed to guarantee its execution, will be developed in the technical standard issued by the Central Bank, through its Norms Committee, for such purposes.

V. That Article 43, third paragraph, of the Law on Private Alternative Investment Funds establishes that the procedure for the liquidation of a subordinate PAIF will be developed in the technical standards issued by the Central Bank, through its Norms Committee, for such purposes.

VI. That Article 44 of the Law on Private Alternative Investment Funds establishes that the Council, at the request of an Administrator, may authorize the merger of Funds. For the application of said article, the Central Bank will issue technical standards that will establish the procedure to request merger authorization from the Superintendence and the documents that will accompany said request, including the merger agreements, the modifications to the Internal Regulations and the models of subscription agreements for participation quotas; as well as the information that must be available to participants before and after the merger, considering the modifications to the investment policies of the respective Funds and the calculation method of the exchange ratio that will be used for the conversion of quotas. To grant the aforementioned authorization, the solvency certificates of the Tax Administration of the respective Funds must be presented, under the terms provided in the tax laws for such cases.

VII. That Article 2, second paragraph, of the Law on Supervision and Regulation of the Financial System establishes that the proper functioning of the Financial Supervision and Regulation System requires, from the members of the financial system and other supervised entities, compliance with current regulations and the adoption of the highest standards of conduct in the development of their business, acts, and operations, in accordance with what is established in this Law, in other applicable laws, in the regulations, and in the technical standards issued for such effect.

THEREFORE,

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

AGREES to issue the following:

TECHNICAL STANDARDS FOR THE TRANSFER, MERGER, DISSOLUTION AND LIQUIDATION OF PRIVATE ALTERNATIVE INVESTMENT FUNDS, ADMINISTRATORS AND FIXED CAPITAL INVESTMENT COMPANIES

CHAPTER I
OBJECT, SUBJECTS AND TERMS

Object
Art. 1.- These Standards aim to establish the provisions applicable to the processes of transfer, merger, dissolution, and liquidation of Subordinate and Autonomous Private Alternative Investment Funds, Fixed Capital Investment Companies, and Administrators of Private Alternative Investment Funds, in accordance with what is provided in the Law on Private Alternative Investment Funds.

Subjects
Art. 2.- The subjects obliged to comply with the provisions established in these Standards are:
a) Fixed Capital Investment Companies; and b) Administrators of Private Alternative Investment Funds and the Funds they administer.

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 or contributions; c) Custodian: Company specialized in the deposit and custody of securities; d) Alternative Funds or by its English acronym "PAIF": Private Alternative Investment Funds, in accordance with what is established in the Law on Private Alternative Investment Funds; e) Board of Directors: Collegiate body or equivalent body, in charge of the administration of the Administrator of Private Alternative Investment Funds or Fixed Capital Investment Company, with supervisory, directional, and control functions; f) Law: Law on Private Alternative Investment Funds; g) PAIF: Private Alternative Investment Funds (PAIF, by its English acronym); h) Autonomous PAIF: In accordance with Article 3 of the Law on Private Alternative Investment Funds, they are created through the constitution of a SICAF, or the transformation of another existing society into one of these, and whose administration and operation will be governed by the respective social clauses, statutes, and internal norms corresponding to the respective SICAF; i) Subordinate PAIF: In accordance with Article 3 of the Law on Private Alternative Investment Funds, these are PAIFs that are formed through the contributions or assets of investors that are delivered to an Administrator with the purpose that this administers them exclusively for the benefit of these same investors; j) Participant: Investor in a Private Alternative Investment Fund; k) Information Prospectus: Information prospectus for participation quotas in the case of subordinate PAIFs; l) Internal Regulation: Document containing all the specific characteristics and rules that govern the operation of a given alternative fund, in accordance with Article 31 of the Law on Private Alternative Investment Funds. The term will also serve to refer to what is established as definitive documents of Alternative Funds under Article 47 of the aforementioned Law; m) SICAF: Fixed Capital Investment Company; n) Administrator: Administrator of Subordinate Private Alternative Investment Funds; o) Partner or Shareholder: Investor in an Autonomous PAIF; and p) Superintendence: Superintendence of the Financial System.

CHAPTER II
TRANSFER OF SUBORDINATE PAIFs

Transfer of a subordinate PAIF
Art. 4.- The transfer of a subordinate PAIF, as a patrimonial unit, can only be carried out in favor of another Administrator authorized by the Superintendence and must comprise all the goods, rights, and obligations that constitute the assets and liabilities of the subordinate PAIF, as well as guarantees, sureties, or bonds thereof.

Grounds for transfer of a subordinate PAIF
Art. 5.- The transfer of a subordinate PAIF will proceed due to any of the following grounds:
a) Revocation of the authorization to operate of the Administrator, after exhausting the due process established in Article 22 of the Law; b) Dissolution of the Administrator in accordance with what is established in Article 21 of the Law and the Commercial Code; or c) Decision of the Administrator.

In the case of revocation of the authorization to operate of the Administrator, once it is final, on the next business day, the ceding Administrator must inform the participants directly about said revocation either by printed, electronic, or magnetic means as requested by them in the subscription agreement for quotas, which allow corroborating the notification management in a reliable manner. It will also inform the participants of the operations that the Superintendence has authorized it to perform, while the transfer plan established in Article 11 of these Standards is approved.

Transfer of subordinate PAIFs due to revocation of authorization to operate of the Administrator Art. 6.- Within three business days following receipt of the notification of revocation to operate, the Administrator will send a note to the Superintendence, signed by the Legal Representative or Attorney-in-fact thereof, attaching the following:
a) Suggestion of the Administrator to which it recommends transferring the subordinate PAIF it administers; b) Certification of the minute point in which the agreement to transfer the subordinate PAIF by the Board of Directors of the ceding Administrator is recorded; c) Certification of the Board of Directors agreement of the acquiring Administrator in which the acceptance of the administration of the subordinate PAIF to be transferred is recorded; d) Sworn Statement issued by the acquiring Administrator in which it states that it meets the requirements established in Article 10 of these Standards; and e) Transfer plan of the subordinate PAIF, in accordance with what is established in Article 11 of these Standards. The Superintendence will authorize the transfer of the PAIF, in accordance with what is established in Article 12 of these Standards.

Deadline for the transfer of subordinate PAIFs due to revocation of authorization Art. 7.- Within fifteen days following the notification of the revocation, the Administrator will proceed with the transfer of the subordinate PAIF, in accordance with what is established in Article 15 of the Law.

Transfer of subordinate PAIFs due to dissolution agreement or by decision of the ceding Administrator Art. 8.- In the case of dissolution or by decision of the Administrator, it will request in writing from the Superintendence the authorization for the transfer of the administration of a subordinate PAIF.

Such request will be signed by the Legal Representative or Attorney-in-fact of the Administrator, attaching the following:
a) Certification of the minute point in which the agreement to transfer the subordinate PAIF by the Board of Directors of the ceding Administrator is recorded; b) Justification of the transfer decision if it is due to a dissolution agreement or by decision of the ceding Administrator; c) Certification of the Board of Directors agreement of the acquiring Administrator in which the acceptance of the administration of the subordinate PAIF to be transferred is recorded; d) Sworn Statement issued by the acquiring Administrator in which it states that it meets the requirements established in Article 10 of these Standards; and e) Transfer plan of the subordinate PAIF established in Article 11 of these Standards, taking into account the reference date of the agreement to transfer the subordinate PAIF. The certifications of the minute points referred to in letters a) and c) of this article will be submitted for processing only once. The Superintendence will authorize the transfer of the PAIF, in accordance with what is established in Article 12 of these Standards.

Deadline to carry out the transfer of subordinate PAIFs due to dissolution or by decision of the Administrator Art. 9.- The transfer of the administration of subordinate PAIFs due to dissolution or by decision of the Administrator must be carried out within twenty business days following the communication to the Superintendence in accordance with Article 11 of these Standards.

At the request of the Administrator, the Superintendence may extend, before its expiration, the deadline referred to in the first paragraph of this article, for which it must present in writing the reasons justifying the request. The extension period cannot exceed ten business days and will begin to count from the expiration date of the original deadline.

In cases of dissolution of the Administrator, it may dissolve itself only after having transferred the subordinate PAIFs to the acquiring Administrator; likewise, the ceding Administrator will maintain the guarantee corresponding to the transferred subordinate PAIF, in accordance with what is established in Article 12 of the Law.

If within the established deadline, the subordinate PAIFs have not been able to be transferred to the acquiring Administrator, their liquidation will proceed in accordance with what is established in Article 43 of the Law and Chapter IV of these Standards.

Requirements of the acquiring Administrator
Art. 10.- The acquiring Administrator must meet at least the following requirements:
a) Have an authorized investment administrator for the type of assets that make up the subordinate PAIF to be received; and b) Have the necessary human and technological resources to administer the transferred subordinate PAIF.

Minimum content of the transfer plan of subordinate PAIFs Art. 11.- The transfer plan of the subordinate PAIF must contain at least the following:
a) Transfer schedule and those responsible for its execution; b) Report of the subordinate PAIF to be transferred detailing: its composition, number of participants and their quotas, as well as the inventory of assets and liabilities that make it up on the date the revocation of the authorization becomes final; c) Process of notification to participants regarding the transfer, in accordance with what is established in Article 13 of these Standards; d) Procedure or mechanism for redemption due to modifications in accordance with what is established in the Internal Regulation, as well as the detail of actions to be taken in case instructions from the participant have not been received or the participant could not be contacted; e) Account statement of the securities of the subordinate PAIF to be transferred by the Custodian; and f) Other aspects that the ceding Administrator deems convenient.

Authorization of the transfer, transfer plan, and acquiring Administrator of the subordinate PAIF Art. 12.- The Superintendence will authorize the transfer, the transfer plan, and the suggested acquiring Administrator, or another Administrator of its choice, and will recommend the corresponding modifications to the plan presented by the ceding Administrator, within the peremptory deadline of five business days following the presentation. The Superintendence will verify compliance with the requirements established in Article 10 of these Standards.

The Superintendence will notify the authorization of the transfer to the ceding Administrator, the acquiring Administrator, and the Custodian, within three business days following the authorization of the transfer plan of the subordinate PAIF.

The ceding Administrator must comply with the transfer plan authorized by the Superintendence.

In the case that the actions of the ceding Administrator do not correspond to the presented and authorized plan, the Superintendence will proceed in accordance with what is established in the second paragraph of Article 26 of the Law.

Notification to the participant in the process of transfer of subordinate PAIFs Art. 13.- On the next business day following receipt of the authorization of the transfer of the subordinate PAIF, due to the different grounds, the ceding Administrator must notify the participant in a clear, truthful, complete, and timely manner, so that it is understandable, avoiding hiding or minimizing important warnings, with the following minimum content:
a) Date of transfer authorization by the Superintendence; b) Justification of the transfer process; c) Name of the acquiring Administrator; d) Deadline to request redemption of participation quotas; and e) Place and person designated to attend inquiries related to the communication.

Such communication to the participant will be made in accordance with what is established in Article 47 of these Standards.

Documentation of the subordinate PAIF to be transferred Art. 14.- Once the authorization of the transfer of the subordinate PAIF is received, the Legal Representative or Attorney-in-fact of the acquiring Administrator, within a period not exceeding five business days, must send to the Superintendence the following documentation and information:
a) Drafts of the Internal Regulation, Information Prospectus, and model of subscription agreement for participation quotas; b) Documents related to the constitution of the guarantee of the subordinate PAIF, according to its nature; c) Certification of the Board of Directors agreement of the Administrator in which the entity that will be the representative of the beneficiaries of the guarantee is designated; d) Acceptance of the entity as representative of the beneficiaries of the guarantee; e) Method of valuation of investments in securities; and f) Other documentation that the acquiring Administrator considers necessary.

The documentation may be presented through the means made available by the Superintendence, which may be electronic.

Transfer of securities
Art. 15.- Once the transfer is authorized, the ceding Administrator will send to the Custodian of the securities of the subordinate PAIF the instruction to transfer these to the destination account that the acquiring Administrator holds for the administration of the securities of the portfolio of the transferred subordinate PAIF.

The ceding Administrator, as well as the Custodian of the securities of the subordinate PAIF to be transferred, will cease in their functions once the acquiring Administrator has registered in its accounts the securities that make up the subordinate PAIF.

Once the securities are transferred to the destination account of the acquiring Administrator, the transferred subordinate PAIF may begin operations under its administration.

Responsibility
Art. 16.- The acquiring Administrator will succeed the ceding Administrator by operation of law in its rights and obligations, including tax ones, once the transfer of the subordinate PAIF has concluded, without prejudice to the responsibility of the ceding Administrator during its administration of the subordinate PAIF.

Once the transfer is authorized, the acquiring Administrator will have one hundred and eighty days to carry out the necessary adaptations to comply with the provisions of the Law.

Modifications in the National Registry Center
Art. 17.- In the case that the subordinate PAIF possesses real estate, the acquiring Administrator will carry out the necessary procedures at the National Registry Center to register the respective modifications.

The acquiring Administrator will present before the Real Estate and Mortgage Registry the documentation requested by it, adding the authorization of transfer by the Superintendence.

CHAPTER III
MERGER OF SUBORDINATE PAIFs AND ADMINISTRATORS

Merger of subordinate PAIFs
Art. 18.- Two or more subordinate PAIFs may merge, provided that such merger is carried out between similar subordinate PAIFs of the same classification, considering at least the following characteristics:
a) Participant profile; b) Investment policy; c) Risks inherent to the subordinate PAIF; and d) Others that are consistent with the characteristics of the subordinate PAIFs to be merged.

Modalities of Merger
Art. 19