Circular 01-25 — Notification of Regulatory Indexation of the Maximum Issuance Amount for Small and Medium Enterprises (SMEs) in Fixed Income Public Offering Securities with Voluntary Risk Rating and the Maximum Investment Amount for Small Investors

SUPERINTENDENCE OF THE SECURITIES MARKET OF THE DOMINICAN REPUBLIC

CIRCULAR No. 01/25

To: Securities Market Participants and the general public.

Subject: Notification of Regulatory Indexation of the Maximum Issuance Amount for Small and Medium Enterprises (SMEs) in Fixed Income Public Offering Securities with Voluntary Risk Rating and the Maximum Investment Amount for Small Investors.

Having seen: a. The Constitution of the Dominican Republic, given and proclaimed on the twenty-seventh (27) day of October in the year two thousand twenty-four (2024). b. Law No. 249-17, on the Securities Market of the Dominican Republic, which repeals and substitutes Law No. 19-00 of May eight (8), two thousand (2000), promulgated on December nineteen (19), two thousand seventeen (2017) (hereinafter, “Law No. 249-17”); c. Law No. 107-13, on the Rights of persons in their relations with the Administration and Administrative Procedure, dated August six (6), two thousand thirteen (2013); d. Law No. 479-08, General Law of Commercial Companies and Individual Limited Liability Enterprises, dated December eleven (11), two thousand eight (2008) and its modifications; e. Modification to the Public Offering Regulation approved by the Fourth Resolution of the National Securities Market Council dated September thirteen (13), two thousand twenty-two (2022), R-CNMV-2022-16-MV; f. Public Offering Regulation approved by the Sole Resolution of the National Securities Market Council dated October fifteen (15), two thousand nineteen (2019), R-CNMV-2019-24-MV. g. Circular No. 01/24 on the notification of regulatory indexation of the maximum issuance amount for Small and Medium Enterprises (SMEs) in fixed income public offering securities with voluntary risk rating and the maximum investment amount for small investors.

Considering:

1. That the Superintendence of the Securities Market, in its capacity as the regulatory body of the Securities Market and in accordance with Article 7 of Law No. 249-17 on the Securities Market, shall have as its objective to promote an orderly, efficient, and transparent securities market, protect investors, ensure compliance with the law, and mitigate systemic risk, through the regulation and supervision of natural and legal persons operating in the securities market.

2. That Article 17, paragraphs 1 and 2 of Law No. 249-17 empowers the Superintendent of the Securities Market to: 1) Execute the securities market policy in accordance with the guidelines established by the Council, and 2) Comply with and enforce the provisions of this law and its regulations, ensuring the correct application of its principles, policies, and objectives.

3. That paragraph 14 of the aforementioned Article attributes to the Superintendent of the Securities Market the power to “issue the resolutions, circulars, and instructions required for the development of this law and its regulations.”

4. That, in accordance with the exercise of normative power, the National Securities Market Council sanctioned the Modification to the Public Offering Regulation through its Fourth Resolution, R-CNMV-2022-16-MV, dated September thirteen (13), two thousand twenty-two (2022).

5. That Article 3 of the aforementioned Modification to the Public Offering Regulation resolution states:

“() The risk rating shall be voluntary on the part of the issuer for fixed income securities issued by SMEs for a total amount of approved public offerings up to Sixty Million Dominican Pesos (DOP 60,000,000.00), which may be indexed annually by the Superintendent according to the accumulated inflation published by the Central Bank of the Dominican Republic corresponding to December 31 of the immediately preceding year, or its equivalent in foreign currency as determined annually by the Superintendent based on the purchase exchange rate published by the Central Bank of the Dominican Republic corresponding to December 31 of the immediately preceding year. In the event that the issuer classified as an SME exceeds the amount indicated in this paragraph, it must carry out a risk rating as an issuing company.”

6. That, in view of what is stipulated in Article 4 of the aforementioned Modification to the Public Offering Regulation resolution:

“() a small investor is considered to be any natural person who requests the subscription of a public offering of Shares issuance, for an amount that does not exceed Five Million Dominican Pesos (DOP 5,000,000.00), which may be indexed annually by the Superintendent according to the accumulated inflation published by the Central Bank of the Dominican Republic corresponding to December 31 of the immediately preceding year, for values denominated in Dominican pesos; or its equivalent in foreign currency. In the case of foreign currencies, the equivalence shall be determined annually by the Superintendent based on the purchase exchange rate published by the Central Bank of the Dominican Republic corresponding to December 31 of the immediately preceding year.”

7. That, likewise for public offerings of fixed income securities, in accordance with what is stipulated in Article 5 of the aforementioned resolution:

“() a small investor is considered to be any natural person who requests to subscribe to securities of an issuance subject to public offering for an amount that does not exceed Five Million Dominican Pesos (DOP 5,000,000.00), which may be indexed annually by the Superintendent according to the accumulated inflation published by the Central Bank of the Dominican Republic corresponding to December 31 of the immediately preceding year, for values denominated in Dominican pesos; or its equivalent in foreign currency. In the case of foreign currencies, the equivalence shall be indexed annually by the Superintendent based on the purchase exchange rate published by the Central Bank of the Dominican Republic corresponding to December 31 of the immediately preceding year.”

8. That it is the competence of the Superintendent to annually index the maximum amount in Dominican pesos, based on the accumulated inflation published by the Central Bank of the Dominican Republic corresponding to December 31 of the immediately preceding year, and to fix the equivalence of the maximum amount for values denominated in United States dollars, based on the purchase exchange rate published by the Central Bank of the Dominican Republic corresponding to December 31 of the immediately preceding year, in accordance with the variation made by Circular No. 01/24.

9. That, according to the data published in the National Consumer Price Index published by the Central Bank of the Dominican Republic, the accumulated inflation corresponding to the period December 2023 to December 2024 was three point thirty-five percent (3.35%), making it necessary to increase the maximum limit to be subscribed by small investors and the maximum amount to be issued by SMEs in fixed income public offering securities with voluntary risk rating for the values.

10. That the purchase exchange rate published by the Central Bank of the Dominican Republic, applicable to December 31, 2024, was sixty Dominican pesos with eighty-nine hundredths cents per United States dollar (DOP 60.8924/USD).

Therefore:

The Superintendent of the Securities Market, in the use of the faculty granted by Article 17, paragraph 14 of Law No. 249-17, disposes the following:

I. Inform that the equivalence of the maximum amount to be issued by SMEs in fixed income public offering securities denominated in Dominican pesos, with voluntary risk rating for the values, will be increased to Sixty-Nine Million Two Hundred Fifty-Two Thousand Four Hundred Fifty-Seven Dominican Pesos with ninety-five cents (DOP 69,252,457.95), indexed according to the accumulated inflation published by the Central Bank of the Dominican Republic corresponding to the period December 2023 to December 2024.

II. Inform that the equivalence of the maximum amount to be issued by SMEs in fixed income public offering securities denominated in United States dollars, with voluntary risk rating for the values, will be One Million One Hundred Thirty-Seven Thousand Two Hundred Ninety-Two United States dollars with thirty cents (USD 1,137,292.30), updated based on the purchase exchange rate of one United States dollar, published by the Central Bank of the Dominican Republic corresponding to the close of December 31, 2024.

III. Inform that the equivalence of the maximum investment amount in a public offering issuance requested by a small investor for values denominated in Dominican pesos will be increased to Five Million Seven Hundred Seventy-One Thousand Sixty-Four Dominican Pesos with zero cents (DOP 5,771,064.00), indexed according to the accumulated inflation published by the Central Bank of the Dominican Republic corresponding to the period December 2023 to December 2024.

IV. Inform that the equivalence of the maximum investment amount in a public offering issuance requested by a small investor for values denominated in United States dollars will be Ninety-Four Thousand Seven Hundred Seventy-Four United States dollars with seventy-eight cents (USD 94,774.78), updated based on the purchase exchange rate of one United States dollar, published by the Central Bank of the Dominican Republic corresponding to the close of December 31, 2024.

V. The provisions of this Circular will enter into force from the next business day following its publication.

VI. Instruct the Directorate of Regulation and Innovation to publish the content of this Circular on the institution's website.

In Santo Domingo, National District, capital of the Dominican Republic, on the twentieth (20) day of the month of February in the year two thousand twenty-five (2025).

Ernesto Bournigal Read Superintendent

EBR/AJSJ

Directorate of Regulation and Innovation