Circular 11/23 — Authorization of the Public Consultation of the Draft Green Taxonomy of the Dominican Republic

Securities Market Superintendence of the Dominican Republic CIRCULAR No. 11/2023 To: Securities Market Participants and the General Public. Subject: Authorization of the Public Consultation of the Draft Green Taxonomy of the Dominican Republic.

Seen: a. Constitution of the Dominican Republic, voted and proclaimed by the National Assembly on the thirteenth (13) day of June two thousand fifteen (2015), published on the tenth (10) of July two thousand fifteen (2015). b. Law No. 249-17, on 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), (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. Law No. 64-00 General Law on the Environment, dated August eighteen (18) two thousand (2000); f. Public Offering Regulations; g. Circular C-SIMV-2020-02-MV establishing guidelines for the issuance of sustainable, green, and social public offering securities in the Securities Market of the Dominican Republic, dated February twenty-six (26) two thousand twenty (2020).

Considering: a. That Article 217 of the Constitution of the Dominican Republic establishes that the economic regime is oriented towards the search for human development. It is based on economic growth, wealth redistribution, social justice, equity, social and territorial cohesion, and environmental sustainability, within a framework of free competition, equality of opportunity, social responsibility, participation, and solidarity. b. That, pursuant to numeral 9 of Article 63 of the Constitution of the Dominican Republic, the State shall define policies to promote and incentivize research, science, technology, and innovation that favor sustainable development, human welfare, competitiveness, institutional strengthening, and environmental preservation. c. That it constitutes a duty of the State to prevent pollution, protect, and maintain the environment for the benefit of present and future generations, pursuant to Article 67 of the Constitution of the Dominican Republic. d. That, by virtue of Article 4 of Law No. 64-00, the conservation, protection, restoration, and sustainable use of natural resources, the environment, and the assets comprising natural and cultural heritage are declared of national interest. e. That, as part of its commitments to the United Nations Framework Convention on Climate Change (UNFCCC), including the Paris Agreement, the 2030 Development Agenda, and the Convention on Biological Diversity (CBD), the Dominican Republic is designing and implementing financial instruments to advance its environmental and climate objectives. f. That the 2030 Agenda for Sustainable Development is a global action plan for the prosperity of people and the planet, adopted by the 193 Member States of the United Nations in 2015. In this sense, the 2030 Agenda is composed of 17 Sustainable Development Goals (SDGs) and 169 targets, which address the world's main challenges, such as poverty, inequality, climate change, and environmental degradation. To these ends, the Dominican Republic has committed to implementing the 2030 Agenda and has developed a National Sustainable Development Plan 2030, which establishes the actions and measures necessary to achieve the SDGs in the country. g. That, to achieve the aforementioned goals, on February twenty-two (22) two thousand twenty-two (2022), a cooperation agreement was signed between the Securities Market Superintendence, the Ministry of Environment and Natural Resources, and the International Finance Corporation ("IFC") with the object of developing the green finance taxonomy of the Dominican Republic. h. That, as a result of said agreement, the Dominican Republic formed the Green Taxonomy Monitoring Committee charged with designing and driving the implementation of a taxonomy that promotes directing financial flows towards economic activities and assets with substantial contributions to achieving environmental objectives. i. That the taxonomy is defined as an identification system for economic activities and assets with substantial contributions to achieving environmental and/or social objectives, which respond to the commitments, strategies, and policies established in this matter by the country. j. That, once adopted, the Green Taxonomy Project will serve for participants in financial markets to use a common language regarding the policies, strategies, and commitments established by the Government in environmental matters. Additionally, it will be a catalyst for the development of environmental financing instruments. k. That, likewise, once the Green Taxonomy Project is implemented, among the uses for the Securities Market will be: (1) Facilitating the differentiation and classification of the use of funds from green financial instruments (e.g., green bonds, green portfolios, investment portfolios, and stock indices), aligned with the achievement of environmental objectives; and (2) Providing a tool to strengthen reporting, communication, and transparency exercises in capital markets and monitoring of ecoposture risk. l. That, by virtue of the powers conferred by Law No. 249-17 and the Public Offering Regulations, the Securities Market Superintendence, through Circular C-SIMV-2020-02-MV of February twenty-six (26) two thousand twenty (2020), issued the Guidelines for the issuance of sustainable, green, and social public offering securities in the Securities Market of the Dominican Republic, where concepts of green, social, and sustainable securities are developed in accordance with international principles and standards of the International Capital Market Association ("ICMA"). m. That the Securities Market Superintendence, pursuant to Article 7 of Law No. 249-17 and in its capacity as the regulator of the Securities Market, has 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. n. That Article 17, numerals 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." o. That the Superintendent is the highest executive authority of the Securities Market Superintendence, having charge of its direction, control, and representation. p. That numeral 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."

Therefore: The Superintendent of the Securities Market, in the exercise of the power conferred by Article 17 numeral 14) of Law No. 249-17 and the Public Offering Regulations:

1. Authorizes the publication of the notice in one or more printed media of wide national circulation and on the institutional portal, for the purpose of public consultation by securities market participants and the general public, of the Draft Green Taxonomy of the Dominican Republic, attached to this Circular.
2. Inform that the Draft Green Taxonomy of the Dominican Republic is available on the websites of the Securities Market Superintendence (https://simv.gob.do/) and the Ministry of Environment and Natural Resources (https://ambiente.gob.do/).
3. Inform securities market participants and the general public that, once the Green Taxonomy of the Dominican Republic is issued, they may use it voluntarily to: (i) identify financing and investment opportunities and mobilize resources to support the transition to a sustainable economy; (ii) measure the alignment of their portfolios with green assets and activities; (iii) structure green financial products and solutions; and, (iv) strengthen disclosure and transparency practices regarding capital mobilized towards environmental objectives.
4. Grant a period of forty-five (45) business days to collect the opinions of securities market participants, interested sectors, and the general public, starting from the next business day following the publication of this Circular.
5. 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 thirteenth (13) day of the month of October two thousand twenty-three (2023).

Ernesto Bournigal Read Superintendent

Regulation and Innovation Directorate