Agreement No. 2-2024 of March 26, 2024 Modifying Article One of Agreement No. 2 of February 28, 2000

REPUBLIC OF PANAMA
BOARD OF DIRECTORS
SUPERINTENDENCY OF THE SECURITIES MARKET
Agreement No. 2-2024
(Dated March 26, 2024)
"Modifying Article One of Agreement No. 2 of February 28, 2000".

The Board of Directors of the Superintendency of the Securities Market, in 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 Superintendency of the Securities Market as an autonomous state agency, with legal personality, own assets, and administrative, budgetary, and financial independence.

That the Board of Directors, in accordance with Articles 5, 6, 10 (item 1), 19, and 20 of the Single Text of the Securities Market Law (hereinafter: Single Text), acts as the Highest Advisory, Regulatory, and Policy-Setting Body of the Superintendency and has among its attributes to adopt, amend, and revoke Agreements that develop the provisions of the Securities Market Law.

That the Superintendency, pursuant to Article 3 of the Single Text, has the general objective of regulating, supervising, and auditing securities market activities conducted in or from the Republic of Panama, promoting legal certainty for all market participants and guaranteeing transparency, with special protection of investors' rights.

That it is an attribute of the Board of Directors of the Superintendency, provided for in item 5 of Article 10 of the Single Text, to adopt the principles, standards, interpretations, guidelines, technical pronouncements, practices, and general rules issued by national or international accounting organizations that must be used in the preparation of financial statements, as well as to adopt the format and content thereof and establish the format and content of any other financial information that the Board of Directors determines registered issuers, investment companies, entities licensed by the Superintendency, and any other person subject to the provisions of the Securities Market Law must present.

That the National Securities Commission (now the Superintendency of the Securities Market), through Agreement No. 2 of February 28, 2000, prescribed the format and content of the financial statements to be submitted to the Securities Regulator and adopted the accounting standards and principles and auditing standards to be used in the preparation and auditing of said financial statements.

That through Agreement No. 8-2000 of May 22, 2000, the National Securities Commission (now the Superintendency of the Securities Market) adopted the standards applicable to the format and content of Financial Statements and other financial information that registered persons or those subject to reporting must periodically submit to the Commission according to Decree-Law 1 of July 8, 1999.

That through Law 280 of December 30, 2021, which regulates the practice of the authorized public accounting profession, paragraph I of item 7 of its Article 22 provides that the International Financial Reporting Standards (IFRS) issued and to be issued by the International Accounting Standards Board, an independent body established to promulgate accounting standards of worldwide application, are adopted as their own and apply in the Republic of Panama.

That through Agreement No. 12-2023 of December 27, 2023, a review and adjustment of certain articles of Agreements No. 2 of February 28, 2000 and No. 8-2000 of May 22, 2000 was carried out, which develop the standards applicable to the format and content of Financial Statements and other financial information that must be periodically submitted to the Superintendency, aligning them with the provisions contained in Law 280 of December 30, 2021, which regulates the authorized public accounting profession in the Republic of Panama, modifying some articles and repealing others whose content is already directly regulated by the International Financial Reporting Standards (IFRS), which must be applied as set forth therein.

That, in that order of ideas, Article 323 of the Single Text establishes that when the Superintendency contemplates reforming 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 market efficiency, competition, and capital formation.

That in Superintendency working sessions, the need to review and incorporate a transitional paragraph in Article One of Agreement No. 2 of February 28, 2000, has been highlighted, which allows registered issuers who are currently presenting their financial statements in accordance with Generally Accepted Accounting Principles in the United States of America (US GAAP), in accordance with the regulation in effect at the time of registration, to continue presenting them under these accounting principles while the corresponding registration remains in force with the Superintendency.

That taking into account that the provisions contemplated in this Agreement are limited to adjusting the scope of the standards applicable to the format and content of Financial Statements and other financial information to be submitted to the Superintendency in light of the currently applicable accounting legislation in the Republic of Panama, it corresponds to apply what is established in Article 326 of the Single Text, regarding actions that grant an exemption or eliminate a restriction, so the provisions contained in Title XV regarding the "Administrative Procedure for the Adoption of Agreements" will not apply to this Agreement.

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

ARTICLE ONE: MODIFY Article One of Agreement No. 2 of February 28, 2000, which shall read as follows:

Article One: Accepted Accounting Standards and Principles
Financial statements submitted by registered persons or those subject to reporting under the Securities Market Law shall be prepared in accordance with the International Financial Reporting Standards (IFRS) issued and to be issued by the International Accounting Standards Board, an independent body established to promulgate accounting standards of worldwide application.

Transitional Paragraph: Registered issuers who are currently presenting their financial statements in accordance with Generally Accepted Accounting Principles in the United States of America (US GAAP) may continue to present them under these principles while the corresponding registration remains in force with the Superintendency of the Securities Market.

ARTICLE TWO: EFFECTIVENESS. This Agreement shall take effect from the day of its publication in the Official Gazette of the Republic of Panama.

PUBLISH AND COMPLY,

Adriana Caries
President of the Board of Directors

Luis Y. Vásquez Brown
Secretary of the Board of Directors