Agreement 7-2021 Adopting Email as an Alternative Means for Receiving, Tracking, and Responding to Procedures by the Securities Market Superintendence, Qualified Electronic Signature, and the Virtual Securities Registration Window

REPUBLIC OF PANAMA
BOARD OF DIRECTORS
SECURITIES MARKET SUPERINTENDENCE
Agreement No. 7-2021
Of October 18, 2021

"That adopts the use of email, as an alternative means for the receipt, tracking, and response to procedures by the Securities Market Superintendence, the qualified electronic signature, and the Virtual Securities Registration Window"

The Board of Directors of the Securities Market Superintendence,

in the exercise of its legal powers, and

CONSIDERING:

That Law 67 of September 1, 2011, amended Decree-Law 1 of July 8, 1999, and created the Securities Market Superintendence as an autonomous state entity, with legal personality, its own assets, and administrative, budgetary, and financial independence.

That the Board of Directors, in accordance with Articles 5, 6, 10 (items 1, 18, and 20), 19, and 20 of the Unified Text of the Securities Market Law (hereinafter: Unified Text), acts as the Highest Body for consultation, regulation, and establishment of general policies of the Superintendence, and has among its attributions: (i) to adopt, reform, and revoke agreements that develop the provisions of the Securities Market Law; (ii) to issue the administrative norms necessary for the fulfillment of the functions and attributions of the Superintendence; and (iii) to issue resolutions of general application, which must be published in the Official Gazette and will enter into force from their promulgation, unless the Board of Directors establishes another date.

That the Superintendence, by virtue of Article 3 of the Unified Text, has as its general objective the regulation, supervision, and oversight of securities market activities developed in the Republic of Panama or from it, promoting legal security for all market participants and guaranteeing transparency, with special protection for the rights of investors.

That within the framework of the regulation of securities market activities attributed to the Superintendence by the Unified Text, the Board of Directors has adopted various agreements that develop the conditions, requirements, and procedures that must be complied with for any procedure related to registration, license, or authorization by this Superintendence, as well as the form or means in which the documentation and information related to these procedures must be presented.

That Article 120 of the Unified Text establishes that the presentation of securities registration applications to the Superintendence may be made electronically or by means authorized by it.

That Law 38 of July 31, 2000, in its Article 82, determines that the Authority must make known to the consultant the act by which it resolves the consultation, either through personal delivery of the respective document or by sending it by mail, fax, telegram, or other suitable means for that effect.

That Law 51 of July 22, 2008, establishes the regulatory framework for the creation, use, and storage of electronic documents and electronic signatures.

That Law 51 of July 22, 2008, in its Article 2 (items 3, 17, 20, 21, 43, and 44), provides important definitions regarding: qualified electronic certificate, electronic document, electronic signature, qualified electronic signature, digitized or scanned signature, and data message, as follows:

"Article 2. Definitions. For the purposes of this Law, the following terms are defined as:

3. Qualified electronic certificate. Electronic certificate issued by the Public Registry of Panama or by a certification service provider registered with the Public Registry, which meets the requirements established in this Law regarding the verification of the identity of the signatories and the reliability and guarantees of the certification services offered by the service provider that generates it.
   Modified by Law 82 of November 9, 2012.

4. Electronic document. Any electronic representation that gives testimony of a fact, an image, a sound, or an idea, regardless of the medium used for its fixation.

5. Electronic signature. Technical method to identify a person and to indicate that that person approves the information contained in a data message or electronic document.

6. Qualified electronic signature. Electronic signature whose validity is backed by a qualified electronic certificate that:
   a. Allows identification of the signatory and detection of any subsequent changes to the signed data. b. Is uniquely linked to the signatory and to the data to which it refers.
   c. Has been created using secure signature creation devices, which the signatory maintains under their exclusive control.
   d. Has been created through the infrastructure of a certification service provider registered with the National Directorate of Electronic Signature.

7. Digitized or scanned signature. Image of the trace of the handwritten signature, that is, the result of its scanning. This type of signature is in no case a qualified electronic signature.

8. Data message. Any information generated, sent, or received by electronic means.
   (We highlight the underlined parts)

That Law 51 of July 22, 2008, in its Article 2 (item 42), defines functional equivalence in the sense that actions, procedures, or documents carried out through physical or traditional means can be developed through electronic means, with the same legal and evidentiary consequences.

That Law 51 of July 22, 2008, in its Article 4, determines that when the law requires that information be recorded in a written document, validity, legal effects, and mandatory force will be recognized for acts, powers, contracts, and any document that has been granted or received through data messages, in accordance with this Law and its regulations, provided that the information contained therein is accessible for subsequent consultation.

That Law 51 of July 22, 2008, in its Article 4-A, also determines that when the law requires that information be presented and preserved in its original form, this requirement will be satisfied with a data message if, when the information is required to be presented, it can be shown to the person to whom it must be presented.

That Law 51 of July 22, 2008, in its Article 9, establishes, on one hand, (i) that if a legal provision requires that a signature related to a document or transaction be recognized or made under oath, this requirement will be satisfied in an electronic document if the grantor uses the qualified electronic signature; on the other hand, (ii) that if a legal provision requires that a signature related to a document or transaction be notarized, endorsed, or made under oath before a notary or public official, this requirement will be satisfied in an electronic document if the qualified electronic signature of the grantor is added to the qualified electronic signature of the official authorized to give public faith.

That Law 51 of July 22, 2008, in its Article 13, determines that The State will use electronic signatures in its internal scope and in its relationship with private parties, in accordance with what is established in said Law and with the conditions of use that are set regulationally in each of its powers.

That this Board of Directors, as part of temporary measures in response to the National Emergency State declared by the Cabinet Council as a consequence of the COVID-19 pandemic, issued General Resolution SMV No. JD-3-20 of April 3, 2020, and General Resolution SMV No. JD-5-20 of May 21, 2020, through which it implemented the use of email for the notification of administrative acts issued pursuant to procedures that enter and advance in the Superintendence; in addition, it established the conditions of use of the qualified electronic signature and, in its absence, of the digitized or scanned signature, so that regulated entities could comply with the requirement to present to the Superintendence the sworn declaration granted before a public notary, which currently is provided for in Article 2, item 14, of Agreement No. 2-2010 of April 16, 2010.

That having implemented the use of email for the notification of such administrative acts issued by the Superintendence, and given the facilities provided by this means of communication, has been of utmost importance for the continuity of the administrative functions of this Administrative Authority, and therefore for the provision of services in the securities market, in the face of the National Emergency State produced by the COVID-19 pandemic.

That email and the qualified electronic signature are technological means and solutions, whose use enjoys legal backing in the relationship that occurs between the State and private parties, regarding government procedures, as derived from Law 51 of July 22, 2008, and Law 83 of November 9, 2012, so that, in internal working meetings of this Superintendence and taking into account the positive experience had in the implementation of said means and technological solutions as part of the temporary measures adopted to face the National Emergency State, this Board of Directors has decided to adopt, through regulatory agreement, the use of email, as an alternative means for the receipt, tracking, and response to procedures by the Securities Market Superintendence, the qualified electronic signature, and the Virtual Securities Registration Window.

That it should be noted that Article 323 of the Unified Text establishes that when the Superintendence contemplates adopting an Agreement, it must consider to determine if the action is necessary and appropriate: (a) the public interest, (b) the protection of investors, and (c) whether the action promotes efficiency, market competition, and capital formation.

That taking into account that the provisions contemplated in this Agreement facilitate users' access to the services provided by the Securities Market Superintendence, allowing them and the regulated entities to comply with requirements contemplated in the Securities Market Law and its Agreements, through the implementation of means and technological solutions, which also provides greater efficiency and speeds up the process for the response to procedures by this Regulatory Entity, it corresponds to apply what is established in Article 326 of the Unified Text, regarding actions that grant an exemption or eliminate any restriction, so that the provisions contained in Title XV, regarding the "Administrative Procedure for the Adoption of Agreements," will not be applicable to this agreement.

That, by virtue of the foregoing, the Board of Directors of the Securities Market Superintendence, in the exercise of its legal powers,

RESOLVES:

ARTICLE ONE: THE USE OF EMAIL IS ADOPTED, as an alternative means for the receipt, tracking, and response to procedures by the Securities Market Superintendence, the qualified electronic signature, and the Virtual Securities Registration Window, which shall be governed by the following provisions:

Chapter I
General Provisions

Article 1. Scope of application. The provisions contained in this Agreement will apply to the receipt, tracking, and response to procedures by the Securities Market Superintendence and to the fulfillment of requirements identified in this Agreement.

Throughout the content of this Agreement, "procedures" shall be understood as: any inquiry or request presented to the Securities Market Superintendence, including those related to any registration, license, or authorization by this entity.

The provisions contained in this Agreement do not apply to sanctioning procedures under the responsibility of the Securities Market Superintendence, which are governed by the provisions contained in the Securities Market Law and Executive Decree 126 of May 16, 2017.

Unless otherwise established in this Agreement regarding the qualified electronic signature and its conditions of use, the rest of the provisions contained in this Agreement also do not apply to the information that regulated entities must periodically report to this Administrative Authority, whether: form, report, financial statement, communication, and any other document or file, regardless of its nomenclature and medium, which are governed by what is determined in the Agreements adopted and in the circulars or notes issued by the Securities Market Superintendence, regarding the form or means, content, and periodicity for the reporting of information by regulated entities.

Article 2. Objective. This Agreement aims to facilitate users' access to the services provided by the Securities Market Superintendence and allow them and the regulated entities to comply with requirements contemplated in the Securities Market Law and its Agreements, to provide greater efficiency and speed up the process for the response to the procedures contemplated in Article 1 of this Agreement, by the Securities Market Superintendence, through the implementation of means and technological solutions, such as email and the qualified electronic signature.

Article 3. Legal validity and functional equivalence. Users may carry out their procedures before the Securities Market Superintendence through email, with the same legal and evidentiary consequences as having carried them out through physical or traditional means, in accordance with what is provided in Law 51 of July 22, 2008, and Law 83 of November 9, 2012, subject to the conditions of use established in this Agreement.

Without prejudice to the foregoing, users may continue to carry out their procedures before the Securities Market Superintendence through physical or traditional means, but may avail themselves, at any time during the course of the procedure, of the use of email, provided they comply with the conditions established in this Agreement.

Regardless of the medium used, users must comply with documentary and information requirements, as well as procedures and terms or deadlines contemplated in the Securities Market Law and its Agreements to obtain a favorable response to their procedures.

Article 4. Documents with false or misleading declarations. Regardless of the medium users use to carry out their procedures and present documents, whether in physical or traditional form or through email, they must comply with what is provided in the Securities Market Law, regarding the prohibition of making, or having made, false or misleading declarations in any document presented to the Securities Market Superintendence, without prejudice that its non-compliance is classified as a very serious offense by the Securities Market Law.

Chapter II
Of Email and Its Conditions of Use
Before the Securities Market Superintendence

Article 5. Official email address. The Securities Market Superintendence adopts the use of the email address tramites_smv@supersvalores.gob.pa, as an alternative and official means for the receipt of the procedures contemplated in Article 1 of this Agreement.

The Securities Market Superintendence may, through a Circular or note issued by the Superintendent, adopt the use of any other email address to receive the procedures contemplated in Article 1 of this Agreement.

Upon receipt of the procedure, the Securities Market Superintendence will track and respond through the responsible area and through the corresponding alternative email addresses for each of these.

Article 6. Conditions of use of email. Users may use email to carry out their procedures before the Securities Market Superintendence, subject to the following conditions:

1. In the procedure sent to the official email address, the user or their representative or the person who authorizes must indicate the email address where they will receive communications, including observations or comments, and the response to the procedure, including notifications of administrative acts issued by the Securities Market Superintendence.

The indicated email address must be active, have sufficient space, and have the capacity to receive emails from the Securities Market Superintendence; in addition, it must keep enabled the function of confirmation of receipt or reading of email, whenever available.

In the event that the email address does not meet the requirements established above, any communication sent by the Securities Market Superintendence will be deemed sent on the date and time it is registered in the system of the Securities Market Superintendence, the record of which will be integrated into the corresponding procedure.

In case of not indicating an email address, the sender's address that sent the procedure to the official email address will be used.

The user or their representative or the person who authorizes may modify the initially indicated email address, communicating the new one to the official email address of the Securities Market Superintendence. Proof of the foregoing will be integrated into the respective file.

2. Regarding procedures that have been initiated through physical or traditional means, before or after the entry into force of this Agreement, the user or their representative or the person who authorizes may continue the processing through email, for which they must present a printed memorial or send, to the official email address, the electronic document with the qualified electronic signature, indicating that they accept using email as a means to receive communications, including observations or comments, and the response to the procedure, including notifications of administrative acts issued by the Securities Market Superintendence.

3. The reception hours of procedures through the official email address will be from 8:00:00 a.m. to 11:59:59 p.m. In case a user sends a procedure through the official email address, outside the hours established above or on a non-working day, it will be deemed presented in the first working hour of the next working day.

The Securities Market Superintendence will communicate, via email, the receipt confirmation of the procedure. The documentation and information received by the Securities Market Superintendence are subject to review and evaluation.

In the event that an extraordinary situation arises that does not allow the Securities Market Superintendence to receive documents and information through email, the system will send a communication to the user, and the working day following the adverse event will be considered, so that users can present the documentation and information, with the same legal effects that its presentation on the day the event occurred would have had.

4. Any procedure that enters an email address other than the one officially adopted by the Securities Market Superintendence will be deemed not presented or not sent.

5. To comply with the documentary and information requirements contemplated in the Securities Market Law and its Agreements, a digitized copy of the documentation must be sent through email; nevertheless, the Securities Market Superintendence may request at any time the exhibition or delivery of any original document or information that determines the applicable regulation, to verify and confirm its authenticity, before processing and responding to the procedure.

The file must be sent in PDF format, and "digitized copy" shall be understood as: the conversion or digital reproduction, using a technological device, for example: scanner, that guarantees the obtaining of a faithful and integral image of the physical or original document; in addition, that the resulting digital document can be reproduced or visualized through technological devices and applications and can be migrated and converted, in case of obsolescence, modernization, or change of technology.

For the purposes of the provisions in the preceding paragraph, photos or screenshots taken of the physical or original document are not considered valid, nor are illegible reproductions or those that do not give security that they are identical and exact to the physical or original document.

The Securities Market Superintendence may, through a circular or note issued by the Superintendent, determine the format and quality that the digitized copy of the documentation sent by email must meet. In this sense, it may require the resending of documentation or deny or reject a procedure, when the digitized copy sent does not meet the established standards or when it cannot confirm its authenticity, in cases where the original document or information is not exhibited or delivered upon request by the Securities Market Superintendence.

6. It is the responsibility of the user, their representative, or the person who authorizes, to attend to the observations or comments formulated by the Securities Market Superintendence through email, within the terms contemplated in the regulation and the hours established in item 3 of this Article. Otherwise, the Securities Market Superintendence may deny or reject the procedure.

Article 7. Informal inquiries. Users may use email to carry out their informal inquiries before the Securities Market Superintendence, without being subject to the conditions of use established in Article 6 of this Agreement, nor to the fulfillment of greater requirements and formalities than those established in Law 38 of July 31, 2000.

Formal inquiries, drafted through a signed memorial, that are sent by email to the Securities Market Superintendence, must comply with the conditions of use established in Article 6 of this Agreement.

Chapter III
Of the Virtual Securities Registration Window

Article 8. Virtual Securities Registration Window. The Securities Market Superintendence adopts the Virtual Securities Registration Window, as the official mechanism for the presentation, tracking, and response to securities registration applications, including: primary market, secondary market, and registered recurring issuers, as well as registration applications for investment societies.

Through the Virtual Securities Registration Window, the Securities Market Superintendence may share the information and documentation of securities registration applications with self-regulated organizations, through electronic means and for the purpose of...