Regulation for Securities Intermediaries, modified by Resolution R-CNMV-2025-30-MV

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This document was prepared by the Superintendence of the Securities Market for the purpose of facilitating the consultation of the current provisions of the Regulation for Securities Intermediaries, approved by the First Resolution of the National Securities Market Council, R-CNMV-2019-21-MV, dated thirteen (13) August two thousand nineteen (2019), and the Fourth Resolution of the National Securities Market Council, R-CNMV-2025-30-MV, dated nine (9) December two thousand twenty-five (2025) (hereinafter, the “R-CNMV-2025-30-MV”); which are published at:
https://simv.gob.do/resoluciones/

REGULATION FOR SECURITIES INTERMEDIARIES

TITLE I
GENERAL PROVISIONS

UNIQUE CHAPTER
Object, Scope of Application, and Definitions

Article 1. Object. This Regulation aims to develop the provisions regarding the authorization and operation of securities intermediaries and securities brokers (hereinafter, the “Regulation”), in accordance with what is established by Law No. 249-17 of the Securities Market of the Dominican Republic promulgated on nineteen (19) December two thousand seventeen (2017) (hereinafter, the “Law”).

Article 2. Scope. Securities intermediaries and securities brokers are subject to the regulation established in this Regulation.

Article 3. Definitions [Modified by Article 1 of R-CNMV-2025-30-MV]. In addition to the definitions established in Article 3 of the Law, for the purposes of this Regulation, the following terms shall have the following definitions:

1. Weighted Assets and Contingent Operations. It is the sum of all assets and contingent operations of a securities intermediary at a given moment, adjusted by the risk weighting factor corresponding to each category of asset or contingent operation.

2. Portfolio Management. It is the service that securities intermediaries may provide whereby a natural or legal person grants the intermediary the authority to dispose, totally or partially, of the securities subject to public offering or cash amounts that make up an investment portfolio.

3. Placement Agent. It is the securities agent or stock exchange seat that acts between the issuer and the investor with the objective of carrying out the subscription of a securities issuance in the primary market.

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4. Distribution Agent. It is the securities agent or stock exchange seat when it provides its mediation to the placement agent, in order to facilitate to the latter the process of primary placement of a securities issuance.

5. Securities Agent. It is the securities intermediary that can operate in direct electronic trading systems and in the OTC Market and is not a member of a stock exchange registered in the Securities Market Register (hereinafter, the “Register”).

6. Investment Grade Risk Rating. It is one of the following risk rating categories: (i) very strong payment capacity: Moody’s Aaa and AAA for S&P and Fitch, (ii) strong payment capacity: Moody’s Aa and AA for S&P and Fitch, (iii) good payment capacity: A for all agencies, and (iv) adequate payment capacity: Baa for Moody’s and BBB for S&P and Fitch.

7. Minimum Subscribed and Paid Capital. It is the minimum subscribed and paid capital required from securities intermediaries by Article 156 of the Law.

8. Active Clients. They are the clients of the securities intermediary who carry out at least three (3) transactions in the securities market in the six (6) months prior to the determination date.

9. Best Efforts Placement or Best Efforts Contract. It is the placement process whereby the placement agent commits to the securities offeror to provide its mediation to procure the total or partial primary placement of the same, but without guaranteeing it.

10. Firm Placement or Firm Contract. It is the primary placement process, governed by sales rules, whereby the placement agent subscribes or acquires the entirety of a public offering securities issuance.

11. Guaranteed Placement or Issuance Assurance Contract. It is the primary placement process whereby the placement agent guarantees the securities offeror the total or partial placement of the same within the stipulated timeframe, with the commitment to acquire the unplaced remainder within said timeframe.

12. Primary Placement. It is the initial subscription or acquisition process in the securities market, by investors, of a securities issuance, whether placed directly by the differentiated issuer or, through placement agents hired by the offeror.

13. Primary Placement Contract or Placement Contract. It is the contract entered into between the securities offeror and one or more placement agents, with the objective of

SC-07-03-05 Edition 3 Page 3 of 105 achieving the subscription or placement of the public offering securities comprising an issuance.

14. Distribution Contract. It is the one entered into between placement agents and one or more distribution agents, whereby the latter commit to provide their mediation in order to facilitate to the former the primary placement of the corresponding public offering securities.

15. Securities Brokers. They are, indistinctly, Series A securities brokers and Series B securities brokers.

16. Series A Securities Brokers. They are natural persons who, on behalf of a securities intermediary, carry out activities with public offering securities and financial products, by promoting the purchase and sale of securities and products that the securities intermediary offers to its clients.

17. Series B Securities Brokers. They are natural persons who, in addition to the activities corresponding to Series A securities brokers, carry out on behalf of a securities intermediary activities with public offering securities, through intermediation and risk-taking activities inherent to the securities market.

18. Securities Commercial Account. It is a contract whose object is the settlement by compensation of debtor and creditor accounts resulting from a net balance, on a specific date, of reciprocal credits resulting from the operations of securities intermediaries with their clients in the securities market.

19. Identity Document. This Regulation recognizes as valid and acceptable documents the identity and electoral card, in the case of Dominican citizens, the identity card or work or residence permit in the case of resident foreigners, or the valid passport in the case of non-resident foreigners.

20. Risk Weighting Factor. It is an adjustment factor that reflects the credit risk level of the asset or contingent operation to be weighted. This factor is used to determine the weight of the asset or contingent operation, in terms of credit risk, for the calculation of the Capital and Risk Guarantees Index.

21. Margin Guarantees. They are cash or highly liquid securities guarantees that the securities intermediary may require from the client as coverage for credit and price risk for the maintenance by the client of open positions in financial instruments.

22. Equity Guarantees. They are personal guarantees of immediate availability granted by financial intermediation entities or insurers unconditionally, jointly and severally, and as principal debtor, in favor of the Superintendence of the Securities Market (hereinafter, the “Superintendence”), to ensure the solvency level of the securities intermediary, based on the graduated risks implied by the different levels of activities of the securities intermediary.

23. General Manager (or equivalent). It is the highest-ranking executive of a securities intermediary, who must work for the securities intermediary and is in charge of planning, organizing, directing, and coordinating, together with their direct supervisees, the operational, administrative, and technical functioning of the entity as well as ensuring the implementation and compliance with the policies established by the board of directors with strict adherence to all applicable laws and regulatory norms. The general manager is responsible for the administrative representation of the intermediary before the Superintendence.

24. Risk Group. It is the set of two or more natural or legal persons linked as established in the Corporate Governance Regulation.

25. Leverage Index. It is the quotient resulting from dividing the sum of the balances of accounting equity, equity guarantees, and minority interests, by the total assets of the securities intermediary.

26. Primary Capital and Risk Guarantees Index (Level 1). It is the quotient resulting from dividing the Primary Capital and Risk Guarantees (Level 1) of the securities intermediary by the total Weighted Assets and Contingent Operations.

27. Capital and Risk Guarantees Index. It is the quotient resulting from dividing the Capital and Risk Guarantees of the securities intermediary by the total Weighted Assets and Contingent Operations.

28. Financial Instruments or Investment Instruments. They are the instruments that are offered and traded in the financial market, composed of financial assets, instruments representing financial liabilities or equity, and derivative instruments.

29. Correspondent Intermediary. It is the securities intermediary, foreign or national, that is hired by a national securities intermediary, for the execution of orders, own or for clients, in organized markets to which the national securities intermediary does not have access.

30. Introducing Broker. It is the securities intermediary that refers and assists a client, so that the latter establishes a contractual relationship with another securities intermediary, national or foreign, and assists in the opening and maintenance of brokerage accounts in the name of the client.

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31. Recognized Jurisdiction. They are the member countries of the International Organization of Securities Commissions (IOSCO) that have signed the Multilateral Memorandum of Understanding for Consultation and Exchange of Information - Appendix A, as well as any other country that the Superintendence expressly designates as a recognized jurisdiction.

32. Concentration Limit (Undue Concentration). It is the maximum limit of exposure to liabilities of the same debtor, issuer, or risk group.

33. Accounting Manual and Chart of Accounts. It is the manual of accounting policies and chart of accounts applicable to securities intermediaries issued by the Superintendence through a general norm.

34. Contingent Operations. They are those operations that imply uncertainty about a possible gain (gain contingency) or loss (loss contingency), which will be finally resolved when one or more future events occur or cease to occur. For the purposes of this Regulation, contingent operations are accounted for in item 6 of the Accounting Manual and Chart of Accounts.

35. Structured Operation. It is a derivative operation arising from a contractual agreement, which involves a series of transactions linked to each other, with settlement on different dates, determining the yield of said transaction from the result of the set of individual operations.

36. Accounting Equity. It is the sum of the equity accounts of securities intermediaries specified in the Accounting Manual and Chart of Accounts. Accounting equity incorporates the effects of the impairment regime contemplated in said manual.

37. Complementary Risk Equity or Quasi-Capital (Level 2). It is the amount resulting from summing the balances of subordinated liability accounts, convertible debt, and, in general, all those non-permanent liabilities, with a behavior equivalent to equity accounts.

38. Primary Capital and Risk Guarantees (Level 1). It is the amount resulting from adding to Accounting Equity, Equity Guarantees, and the equity share of minority interests in consolidated subsidiaries, and deducting the adjustment items specified in the Accounting Manual and Chart of Accounts.

39. Capital and Risk Guarantees. It is the capital and guarantees to be used to determine the capital and guarantees ratio divided by the total amount of Assets plus Contingent Operations, weighted based on risks, and is constituted by two levels, namely: Primary Capital and Risk Guarantees (Level 1) and Complementary Risk Equity (Level 2).

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40. Investor Profile. It is the categorization of the client or potential client by the securities intermediary based on the client's aptitude to assume risks in the securities market, based on their financial comprehension capacity of the transaction, their overall economic capacity, and the types of risks they would be willing to assume.

41. Initial Margin Percentage. It is the minimum percentage on the total purchase price of the securities to be financed, which the client must contribute for the securities to be acquired, based on the percentages for each security specified in this Regulation or those established by the Superintendence through technical or operational norms.

42. Net Global Position in Foreign Currency [Modified by Article 1 of R-CNMV-2025-30-MV]. It is the difference between long positions (assets and contingent assets) and short positions (liabilities and contingent liabilities) denominated in foreign currency, belonging to the securities intermediary, distinct from the functional currency.

43. Lending of Public Offering Securities. It is an authorized contract in accordance with Article 165 of the Law, whereby the securities intermediary or the client delivers or receives in loan a certain amount of securities with the obligation to receive or deliver, at the maturity of the contract, other securities of the same species and quality.

44. Margin Lending or Financing. It is an authorized contract in accordance with Article 167 of the Law, whereby the securities intermediary finances a portion of the purchase of securities and the client contributes the required initial capital, based on the initial margin percentage fixed in this Regulation for the various types of securities.

45. Leveraged Products. They are financial products that allow the investor to take a risk position in an asset for an amount greater than the initial investment, including those products in which financing is extended to the investor.

46. Complex Products. They are financial products whose characteristics are generally suitable for a professional investor, are not generally understood by an average investor, which may have a complex structure, are difficult to value, or whose valuation requires special knowledge or systems, and have little or no secondary market. Structured products are not necessarily complex products.

47. Standardized Products. They are financial products tradable in centralized trading mechanisms, as applicable, or whose documentation has been drafted to constitute a standard pattern that can be replicated, transaction by transaction

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48. Structured Products. They are financial products not necessarily standardized, which combine a fixed or variable income instrument, and a derivative, whose yield or principal payment is determined based on the variations observed in the prices of a reference asset, such as a financial instrument, an index, or a portfolio. Structured products are capital protected if they guarantee the investor the recovery of the entire invested amount.

49. Financial Products. They are the financial products and services that make up the activity portfolio that securities intermediaries and financial intermediation entities offer to their clients.

50. Stock Exchange Seat. It is the securities intermediary that can operate in centralized trading mechanisms, in the OTC market, and is a member of a stock exchange registered in the Register.

51. Equity Tier. It is the level of capitalization and guarantees that a securities intermediary must have to carry out a set of active, passive, and contingent activities and operations according to a determined risk level.

52. Repo. It is the contract whereby one of the parties, referred to as the repo party, transfers the ownership of public offering securities to the reverse repo party, who commits to transfer to the repo party, within an equally agreed timeframe, the ownership of other securities from the same issuer and class, against the return of the price paid, plus a premium.

53. Book Value. It is the amount resulting after adjusting the cost value of an asset to fair value (market value) and deducting impairment and depreciation or amortizations.

54. Fair Value. It is the price that would be received to sell an asset or that would be paid to transfer a liability in an orderly transaction between market participants on the measurement date.

TITLE II
AUTHORIZATION REQUIREMENTS TO OPERATE AS A SECURITIES INTERMEDIARY OR SECURITIES BROKER

CHAPTER I
Common Provisions

Article 4. Authorization. Persons wishing to act as securities intermediaries or securities brokers must request authorization to register in the Register and to

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Article 5. Responsibility and Formalities of Documentation. Every application for authorization and registration in the Register must be signed by the legal representative of the company or general or special attorney constituted for such purposes, who must provide the information and documents required in this Regulation, truthfully, timely, accurately, and sufficiently. The applicant is responsible for the documentation deposited with the Superintendence.

Paragraph I. The application must be submitted using the form available at the Superintendence and on its Website, and its supporting documents presented in one (1) copy, organized in the same order in which the information is requested, and with an electronic backup as provided by the Superintendence.

Paragraph II. Prior to the delivery of the application, the applicant must make the corresponding payments in accordance with the Fee Regulation for Regulation and Services of the Superintendence (hereinafter, the “Fee Regulation”) and attach as proof of payment a physical or digital copy of the respective payment voucher.

Article 6. Formalities of Foreign Documents. Any document originating abroad that is presented to the Superintendence must be duly legalized by the competent authorities of the country of origin and by the consular authorities of the Dominican Republic stationed in the same.

Paragraph I. In case there is no Dominican consular office in the country of origin, the procedure will be carried out before the concurrent Dominican consular representation. If the country of origin of the documents has signed the Hague Convention, the documents only need to be apostilled.

Paragraph II. All documents and information drafted in another language must be translated into Spanish before being sent to the Superintendence. In case of inconsistency or error, the Superintendence will only admit the validity of the original document.

Article 7. Deadlines for Application Evaluation. Once the application and documentation are received, the Superintendence will verify that they comply with the requirements established in the corresponding regulations within a period of three (3) business days. The Superintendence will notify the applicant if the application and documentation are incomplete, who will have a period of fifteen (15) business days to complete the missing information. In case the file is not completed within the indicated period, the Superintendence will proceed to return it to the applicant, who may deposit a new application, having to pay the fee applicable for document deposit again as provided in the Fee Regulation.

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Paragraph I. If during the evaluation of the application the Superintendence determines that there are elements that could induce errors or interpretations contrary to current regulations, depending on their magnitude, it may, through a duly motivated act, reject the application or require corrections of the non-compliances, errors, or disqualifications detected.

Paragraph II. The Superintendence may require any additional information to that indicated in this Regulation, for the purpose of clarifying aspects of the application.

Article 8. Approval of Registration. The approval of the application and registration in the Register by the Superintendence will be subject to the verification that the application complies with the requirements established by the Law and this Regulation.

Paragraph I. The Superintendence may establish, through technical or operational norms, minimum administrative, technological, and operational requirements for the maintenance of the granted license, in addition to those provided in the Law and in this Regulation.

Paragraph II. The authorizations granted in accordance with what is established in this Regulation will be registered in the Register subject to prior payment for the registration in accordance with what is provided in the Fee Regulation.

Paragraph III. The authorizations granted by the Superintendence to operate as a securities intermediary or securities broker will be non-transferable, except in cases of merger or change of control of securities intermediaries duly authorized by the Superintendence.

Article 9. Authorization Certificate. The authorization certificate to operate will be issued once the applicant registers in the Register.

CHAPTER II
Requirements to Operate as a Securities Broker

Article 10. Mandatory License – Securities Broker. Persons carrying out activities with public offering securities on behalf of a securities intermediary must hold a securities broker license granted by the Superintendence.

Paragraph I. According to the specific activities they carry out on behalf of a securities intermediary, securities brokers must hold a Series A Broker or Series B Broker license.

Paragraph II. Securities brokers

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