Circular 02/24 — Material Event Regarding Excess in Investment Policy

SIMV
Superintendence of the Securities Market of the Dominican Republic To Subject CIRCULAR No. 02/24 Investment Fund Management Companies.
Material Event Regarding Excess in Investment Policy.

SEEN:
a. The Constitution of the Dominican Republic, voted and proclaimed by the National Assembly on June thirteen (13), two thousand fifteen (2015). b. Law No. 249-17, of the Securities Market of the Dominican Republic, which repeals and replaces Law No. 19-00 of May eight (8), two thousand (2000), promulgated on December nineteen (19), two thousand seventeen (2017) and its modifications (hereinafter, "Law No. 249-17").
c. Law No. 107-13, on the Rights of Persons in their Relations with the Administration and Administrative Procedure, of August six (6), two thousand thirteen (2013).
d. Regulation on Privileged Information, Material Events and Market Manipulation approved by the Third Resolution of the National Securities Market Council R-CNMV-2022-10-MV, of July twenty-six (26), two thousand twenty-two (2022). e. Regulation on Management Companies and Investment Funds approved by the First Resolution of the National Securities Market Council R-CNMV-2019-28-MV, of November five (5), two thousand nineteen (2019), modified by the Second Resolution of the National Securities Market Council, R-CNMV-2021-16-MV, of July sixteen (16), two thousand twenty-one (2021).

CONSIDERING:

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, 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.

That Article 17, numeral 14), of Law No. 249-17, empowers the Superintendent of the Securities Market to "issue the resolutions, circulars and instructions required for the development of this law and its regulations".

That the Superintendent of the Securities Market is the highest executive authority of the Superintendence of the Securities Market, having under his charge the direction, control and representation thereof.

That it corresponds to the Superintendence of the Securities Market to develop the technical or operational norms derived from Law No. 249-17, the applicable regulations and necessary norms for the development of the market in accordance with Article 25 of the aforementioned Law.

5. That Law No. 249-17 stipulates in its Article 23 that natural and legal persons registered in the Registry are obliged to send to the Superintendence the documentation that it requests in financial, administrative, economic, accounting and legal matters.

6. That the aforementioned Law No. 249-17 in its Article 241 establishes the obligation for securities market participants to make public any Material Event, in a truthful, sufficient and timely manner. Furthermore, that the Material Event does not necessarily have to correspond to a decision adopted in formal terms, but is any event that could positively or negatively affect its legal, economic or financial position or the price of securities in the market.

7. That letter e) of Article 23, on "Material Events for Investment Funds" of the Regulation on Privileged Information, Material Events and Market Manipulation establishes as an obligation of investment fund management companies, the duty to notify as a material event "any excess that occurs on the investment and indebtedness policy of investment funds due to causes attributable to the management company, as well as its remediation".

8. That it is necessary to have the dates and remediation of excesses in the investment policy of investment funds.

Therefore:
The Superintendent of the Securities Market, in the exercise of the powers granted by Article 17, numeral 14), of Law No. 249-17, resolves:

I. To inform investment fund management companies that the Material Event contemplated in letter e) of Article 23 of the Regulation on Privileged Information, Material Events and Market Manipulation, at the time of its disclosure, must be presented in accordance with the format below and containing -as a minimum- the following information:

II. In Santo Domingo, National District, capital of the Dominican Republic, on the twenty-seven (27) days of the month of June, two thousand twenty-four (2024).

EBR/ecb

Regulation and Innovation Directorate

In compliance with Article 23, letter e) of the Regulation on Privileged Information, Material Events and Market Manipulation and to section (include section) of the Internal Regulations of date (include day-month-year), of (include name of the investment fund management company) registered in the Securities Market Registry under number (include registration number in the Registry), it is pleased to notify you that the closing of (Include date day-month-year) produced an excess or deficiency in the limits indicated in the policy of (include as applicable investment, diversification, risk, liquidity, duration or indebtedness) of "(include the name and the Registry number of the investment fund), with the following characteristic:

(Include amount or percentage, as applicable) presented at the close of the day; (Include amount or percentage, as applicable) permitted in the internal regulations of the fund; (Include amount or percentage, as applicable) in excess or deficiency at the close of the day with respect to that indicated in the internal regulations; Deadline to adjust the excess or deficiency indicated in the internal regulations.

II. To communicate to investment fund management companies that in the Material Event notifying the remediation of the excess or deficiency, it must indicate, among other aspects, the date on which the excess or deficiency was remediated and the number of accumulated days outside the limits, counted from the date of remediation and the date of notification of the event.

III. To inform that the provisions contained in this Circular will enter into force on the next business day of its publication.

IV. To instruct the Regulation and Innovation Directorate of the Superintendence of the Securities Market to publish the Circular on the institution's website.

Ernesto Bournigal Read
Superintendent