Compilation of Pension Fund Control Regulations - Investment Limits for Pension Fund Administrators - Modifications

1 Montevideo, January 27, 2023 Ref: COMPILATION OF PENSION FUND CONTROL REGULATIONS - INVESTMENT LIMITS FOR PENSION FUND ADMINISTRATORS - MODIFICATIONS. The market is informed that the Financial Regulatory Superintendent, by resolutions dated December 27, 2022, and January 23, 2023, decided the following:

1. REPLACE in Chapter III - Conditions for the investment of assets of the Pension Savings Subfunds, of Title II - Pension Savings Funds, of Book II - Stability and solvency, of the Compilation of Pension Fund Control Regulations, Article 50 with the following:

ARTICLE 50 (PRIMARY MARKET). Investments permitted under letters A), D), F), G), I) and K) of Article 123 of Law No. 16.713 of September 3, 1995, and its amendments, may be acquired in the primary market.

Investments under letter B) of Article 123 of Law No. 16.713 of September 3, 1995, and its amendments, may be acquired in the primary market, provided they meet the following conditions: a. There is a public offering of securities to which all Pension Fund Administrators are invited. b. They have been rated by institutions registered in the Securities Market Registry.

When the matter concerns issuances placed directly by the issuer or a placement agent, in addition to the conditions previously stated, the following requirements must be met: i. existence of a placement procedure where all administrators have equal access; ii. in the event that there is excess demand over the total of the issuance, the issuer must commit to:

• when it concerns placement procedures by quantity at a single price, to allocate it pro rata to all requests made.
• when it concerns bidding procedures by price, to allocate the excess demand at the closing price pro rata to the requests made at that price.

Diagonal Fabini 777 - C.P. 11100 - Tel.: (598 2) 1967 - Montevideo, Uruguay - www.bcu.gub.uy CIRCULAR N°2424

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2. REPLACE in Section II - Securities issued by public or private companies, Financial Trusts and Uruguayan Investment Funds, of Chapter IV - Permitted Investments, of Title II - Pension Savings Funds, of Book II - Stability and solvency, of the Compilation of Pension Fund Control Regulations, Article 59 with the following:

ARTICLE 59 (SECURITIES ISSUED BY COMPANIES, FINANCIAL TRUSTS OR INVESTMENT FUNDS). The securities referred to in letter B) of Article 123 of Law No. 16.713 of September 3, 1995, and its amendments, must meet the following requirements: a. Be registered in the Securities Market Registry. b. Trade on the official market of stock exchanges registered in the Securities Market Registry. c. Have a risk rating issued by rating institutions registered in the Securities Market Registry. The rating cannot be lower than that corresponding to Category 3 for long-term securities and Category 2 for short-term securities, according to the definitions given in Article 54. The existence of a minimum rating does not exempt Administrators from their responsibilities and obligations regarding the good administration of the Pension Funds. d. Not be representative of investments not permitted for the Pension Savings Fund according to what is established in Article 124 of Law 16.713 of September 3, 1995, and its amendments.

3. INCORPORATE into Section II - Securities issued by public or private companies, Financial Trusts and Uruguayan Investment Funds, of Chapter IV - Permitted Investments, of Title II - Pension Savings Funds, of Book II - Stability and solvency, of the Compilation of Pension Fund Control Regulations the following article:

Diagonal Fabini 777 - C.P. 11100 - Tel.: (598 2) 1967 - Montevideo, Uruguay - www.bcu.gub.uy

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ARTICLE 59.1 (SECURITIES ISSUED BY FINANCIAL TRUSTS - COMPOSITION OF THE TRUST) Financial trusts in whose participation certificates, debt securities or mixed securities of public offering the Accumulation Subfunds invest may be constituted by any type of assets located in the country, as well as by securities issued under public or private offering regimes by Uruguayan companies.

4. REPLACE in Section II - Securities issued by public or private companies, Financial Trusts and Uruguayan Investment Funds, of Chapter IV - Permitted Investments, of Title II - Pension Savings Funds, of Book II - Stability and solvency, of the Compilation of Pension Fund Control Regulations, Article 60 with the following:

ARTICLE 60 (INVESTMENT IN SHARES). Accumulation Subfunds may hold in their portfolio up to the equivalent of 20% (twenty percent) of the total shares issued (ordinary, preferred or dividend-bearing) by a Uruguayan joint-stock company, provided that control or significant influence is not configured, as provided in the appropriate accounting standards for commercial companies.

For the purposes of this limit, "pase" or "report" operations whose object value is shares will be counted.

5. INCORPORATE into Chapter V - Investment Limits, of Title II - Pension Savings Funds, of Book II - Stability and solvency, of the Compilation of Pension Fund Control Regulations the article indicated:

ARTICLE 79.3.1 (INVESTMENT LIMIT IN SECURITIES OF PUBLIC OR PRIVATE OFFERING ISSUED BY URUGUAYAN COMPANIES THAT ARE PART OF FINANCIAL TRUSTS). The limits per issuer and per issuance established in this Chapter will apply to securities of public or private offering issued by Uruguayan companies, which are part of financial trusts in which the Accumulation Subfunds invest.

When it concerns shares or other securities representative of capital, the limit established in Article 60 will apply. The aforementioned limit will not apply when the company meets the following conditions: a) The company does not develop business activity other than that related to the holding of real estate, its object being limited to the purchase, sale, leasing or usufruct of real estate located in the country or its delivery to third parties through the granting of other personal or real rights. b) The exploitation activities of said real estate are contracted with third parties.

Diagonal Fabini 777 - C.P. 11100 - Tel.: (598 2) 1967 - Montevideo, Uruguay - www.bcu.gub.uy

4 c) Decisions related to the real estate in compliance with the purpose of the trust are adopted exclusively by the trustee. d) The risks associated with the development of the trust's object are not substantially increased by the acquisition of the company's shares.

PATRICIA TUDISCO Financial Regulatory Superintendent 2022-50-1-02472

Diagonal Fabini 777 - C.P. 11100 - Tel.: (598 2) 1967 - Montevideo, Uruguay - www.bcu.gub.uy