Circular 04/24 — Establishing the Recognition of Appraisal or Valuation Professional Associations

CIRCULAR
No. 04/24
To: Issuers of Public Offering Securities, Investment Fund Management Companies, Securitization Companies and Fiduciary Companies of Public Offerings.
Subject: Circular establishing the recognition of appraisal or valuation professional associations.

Having seen:
a. The Constitution of the Dominican Republic proclaimed on the twenty-seventh (27) day of October 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, of August six (6), two thousand thirteen (2013);
d. The Public Offering Regulation, modified by the Fourth Resolution of the National Securities Market Council, R-CNMV-2022-16-MV, of September thirteen (13), two thousand twenty-two (2022); e. The Regulation of Management Companies and Investment Funds, 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); f. The Standard regulating fiduciary companies and public offering securities trusts approved by the First Resolution of the National Securities Council, R-CNV-2013-26-MV, of October four (04), two thousand thirteen (2013), modified by the Second Resolution of the National Securities Market Council, R-CNMV-2018-07-MV, of November twenty-nine (29), two thousand eighteen (2018). g. The Standard establishing general provisions on the information that Issuers and Securities Market Participants must periodically submit, R-CNV-2016-15-MV, of March three (03), two thousand sixteen (2016), (hereinafter, "Periodic Submission Standard"); h. The Instruction containing guidelines for the various documents established in the Regulation of Management Companies and Investment Funds, C-SIMV-2020-01-MV, of February eighteen (18), two thousand twenty (2020);
i. The Instruction of the Public Offering Regulation, C-SIMV-2020-11-MV, of March six (06), two thousand twenty (2020) and its modifications;

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, 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 it is the criterion of the Superintendence of the Securities Market to standardize the formats and content of documents, which has proven to be effective and has contributed enormously to the good development and organization of the securities market.

5. That, letter g) of Article 33 of the Public Offering Regulation indicates that: when the guarantee refers to real estate, carried out by an independent expert and, in the case of appraisal, carried out by appraisers duly registered in any officially recognized professional association and the certification of the legal status of the property. The appraisal or valuation shall not exceed one year prior to the authorization request.

6. That, paragraph I of Article 9 of the Periodic Submission Standard provides that [i]n the case of public offerings with mortgage guarantees, the appraisal of the real estate carried out by professionals or firms of professionals dedicated to asset valuation, duly registered in the Dominican Appraisers Institute (ITADO), in the Dominican College of Engineers, Architects and Surveyors (CODIA) or in any other professional association officially recognized by the Superintendence.

7. That this requirement is established for immovable assets that constitute the public offering trust, the investment fund portfolio and the separate securitization patrimony, as established in articles 28 paragraph II, 40 paragraph III and 51 paragraph of the aforementioned standard;

8. That, since these are requirements established for the authorization of issuance backed by immovable assets, the need for a valuation report carried out by an independent expert and, in the case of appraisal, carried out by appraisers duly registered in any officially recognized professional association established by this regulatory body is established.

9. That the Superintendence of the Securities Market, in order to promote an organized, efficient and transparent market, must promote actions that allow Securities Market Participants to comply with current legal requirements, particularly with valuation or appraisal reports of real estate that constitute guarantees or public offering securities for their due approval by the regulatory body;

10. That it is necessary for this Superintendence of the Securities Market to pronounce itself on the appraisal or valuation professional associations recognized by it, in order to promote the efficiency of Securities Market Participants in complying with current provisions.

11. That it is in the interest of the Superintendence of the Securities Market to make known that, for cases of valuation or appraisals of real estate, immovable property or a fiduciary asset, the appraisal or valuation professional associations that group these professionals, with accreditation from the Pan American Union of Valuation Associations (UPAV) or the International Valuation Standards Council (IVSC, in English) will be recognized.

Therefore:
The Superintendent of the Securities Market, in the exercise of the power conferred by Article 17 paragraph 14 of Law No. 249-17, disposes the following:

1. To inform Securities Market Participants that, for cases of valuation or appraisals of real estate, immovable property or a fiduciary asset, this Superintendence of the Securities Market will recognize the appraisal carried out by professionals or firms of professionals dedicated to asset valuation, duly registered in the Dominican Appraisers Institute, Inc. (ITADO), the Dominican College of Engineers, Architects and Surveyors (CODIA), or in another professional association of recognized prestige that groups these professionals, with accreditation from the Pan American Union of Valuation Associations (UPAV) or the International Valuation Standards Council (IVSC, in English).

2. To inform Securities Market Participants that the provisions of this circular shall enter into force on the business day following its publication.

3. To instruct the Regulation and Innovation Directorate to publish this circular on the institution's website.

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

Ernesto Bournigal Read
Superintendent
EBR/AJS

Regulation and Innovation Directorate