Compilation of Pension Fund Control Regulations - Normative Modifications to Improve the Authorization Process

Montevideo, December 21, 2023
Ref: COMPILATION OF PENSION FUND CONTROL REGULATIONS - Normative Modifications to Improve the Authorization Process

The market is informed that the Financial Services Superintendence (SSF) adopted, on December 7, 2023, the following resolution:

1. SUBSTITUTE in Section I - AUTHORIZATION TO OPERATE, of Chapter I - AUTHORIZATION AND LICENSING TO OPERATE, of Title I - PENSION SAVINGS FUND ADMINISTRATORS of Book I - AUTHORIZATIONS AND REGISTERS, Articles 2 and 3 with the following:

ARTICLE 2 (MINIMUM REQUIRED INFORMATION).
For the purpose of the opinion issued by the Central Bank of Uruguay, the application for authorization to operate as a pension savings fund administrator must be accompanied by the following information and documentation:
a. Company name, indicating legal name, real and constituted domicile, telephone, email address, and website, tax registration number with the General Tax Directorate and with the corresponding social security body. b. Certified copy of the bylaws. Joint-stock companies must stipulate in their bylaws that shares must be necessarily registered and only transferable with prior authorization from the Central Bank of Uruguay.
c. Identifying data of the company's legal representatives (full name, nationality, ID document, and domicile).
d. List of shareholders, capital to be contributed, and percentage of participation, accompanied by the information requested in Article 3. e. List of senior management personnel according to the definition established in Article 149.1, accompanied by the information required in Article 4. f. List of members of the economic group to which the company belongs, according to the definition established in Article 271 of the Compilation of Regulations and Control of the Financial System, including a description of the activities carried out by them, operational and commercial links with the administrator, as well as details of their websites, if any. g. Projected organizational structure and staffing levels as established in Article 11 of Decree No. 399/995 and advertising strategy. Estimated costs of organization, constitution, and installation, specifying, if applicable, rental and/or fitting costs and investments. h. Business plan including an economic-financial feasibility study, as established in Article 5.
i. Documentation accrediting compliance with items 1) to 10) of Article 1, as applicable.
j. Proof of the prior deposit required in Article 12 of Decree No. 399/995 of November 3, 1995. k. Commission regime to be applied.
l. Description of services to be outsourced that are essential for the administrator's entry into operation. When services are provided by third parties located outside the country or within the country, but the service is provided wholly or partially in or from abroad, the information and documentation set forth in Article 30.1.1 must be presented.

If deemed necessary, the Financial Services Superintendence may request additional information beyond that indicated above.

ARTICLE 3 (INFORMATION ON SHAREHOLDERS).
When applying for authorization to operate, pension savings fund administrators must inform the name of their direct shareholders and the persons exercising effective control, attaching the following information and documentation:
I. Natural persons: the information required by Article 4.
II. Legal entities that do not belong to the public sector, nor are they financial intermediation institutions supervised by the Financial Services Superintendence, must present:
a. Certified copy of the partnership agreement or bylaws. b. When referring to foreign institutions:
b.1. Sworn declaration of the foreign institution, with notarized certification of signature and representation, specifying the control and supervision bodies of the country of origin that have jurisdiction over the shareholder company. b.2. Certificate issued by the competent authority of the country of origin or a notarized certificate accrediting that the shareholder company is legally constituted and that, in accordance with the legislation of said country, there are no restrictions or prohibitions for such societies to participate as partners, founders, or shareholders of other societies constituted or to be constituted in the country or abroad.
c. Annual report and financial statements corresponding to the last 3 (three) closed economic years, with an external auditor's opinion.
d. Risk rating granted by a rating agency, if applicable. e. List of shareholders and identifying data, accompanied by a sworn declaration of the legitimate origin of the capital contributed in accordance with Article 153, detailing the shareholder chain up to identifying the legal subject exercising effective control of the group and indicating the ID document number of each shareholder.

It will not be admitted that in that chain there are societies whose shares are bearer shares and transferable by simple delivery.

If deemed necessary, the Financial Services Superintendence may request additional information beyond that indicated above.

2. SUBSTITUTE in Chapter VI - ISSUANCE AND TRANSFER OF SHARES, of Title I - PENSION SAVINGS FUND ADMINISTRATORS of Book I - AUTHORIZATIONS AND REGISTERS, Article 16 with the following:

ARTICLE 16 (AUTHORIZATION TO ISSUE AND TRANSFER SHARES OR PROVISIONAL CERTIFICATES).
Pension savings fund administrators must request prior authorization from the Financial Services Superintendence to issue or transfer shares or provisional certificates. Both shares and provisional certificates must be registered.

In analyzing these requests, the resolutions of the aforementioned Superintendence will be based on reasons of legality, timeliness, and convenience, considering, for the authorization of the transfer of social control, what is provided in Article 1.

The request must be presented supplying the following information:

1. Certified copy of the resolution adopted by the Shareholders' Assembly resolving to issue shares or provisional certificates.
2. When referring to an issuance or transfer to a new shareholder:
   a. Amount of capital to be contributed or paid by the new shareholder. b. The information corresponding to that provided in Article 3.
   c. The sworn declaration of the legitimate origin of the capital, in accordance with Article 153.
3. When referring to an issuance or transfer to someone who already holds the status of shareholder:
   a. Amount of capital to be contributed or paid by the shareholder. b. The sworn declaration of the legitimate origin of the capital, in accordance with Article 153.

If the authorized issuance or transfer of shares is not effected within 90 (ninety) calendar days counted from the date of notification, the corresponding authorization will automatically expire.

Those issuances of shares or provisional share certificates that do not modify the participation of each of the shareholders in the company's capital are authorized, and must be informed in accordance with the terms provided by Articles 157.2 and 153, respectively, for the capitalization of equity items or new contributions by shareholders. Items whose final destination is a result that cannot yet be recognized in application of the corresponding accounting standards cannot be capitalized.

In cases where the shareholder obtains in total a participation of less than 15% (fifteen percent) of the share capital and provided that control or significant influence is not configured, as provided in the appropriate accounting standards for commercial companies, prior notice to the Financial Services Superintendence will be sufficient, with the authorization understood as granted if no objections are raised within 10 (ten) business days following. In the aforementioned notice, the information required in this article must be supplied.

In all cases, the effectuation of the respective issuances or transfers must be reported to the Financial Services Superintendence within 10 (ten) business days following the date of occurrence.

In the event of the death of a shareholder, such fact must be reported and, within 30 (thirty) days following the date of occurrence, the following documentation must be presented:
a. Certified copy of the death certificate. b. Notarial certificate detailing persons with hereditary rights.

For the purpose of granting non-objection, the Financial Services Superintendence will evaluate whether the new shareholder(s) meet the required conditions.

In this regard, the initiation of the succession process must be accredited and the information on the presumed heirs required by the regulations for shareholders must be presented within a period of 90 (ninety) days following the date of the death.

Once the succession process is finalized, a certified copy of the Certificate of Results of the Succession Proceedings must be presented within a period of 10 (ten) business days, and if there are variations regarding the persons with hereditary rights previously informed, the corresponding information must be presented.

3. SUBSTITUTE in Chapter I - ACCOUNTING AND FINANCIAL STATEMENTS, of Title II - INFORMATION REGIME of Part I - PENSION SAVINGS FUND ADMINISTRATORS of Book VI - INFORMATION AND DOCUMENTATION, Article 146 with the following:

ARTICLE 146 (ACCOUNTING AND MANAGEMENT INFORMATION).
Pension savings fund administrators must supply the Financial Services Superintendence with the following information, in accordance with the instructions to be issued, at the frequency indicated below:

1. Annually:

• Within a period of 2 (two) months counted from the end of the economic year:
  a) Annual financial statements along with their corresponding explanatory notes and annexes.
• Within a period of 4 (four) months counted from the end of the economic year:
  a) Certified copy of the minutes of the assembly approving the financial statements. b) Certified copy of the annual report of the Board of Directors on the management of business affairs and performance in the last period. c) Certified copy of the report of the supervisory body.

2. Monthly:
   Within a period of 10 (ten) business days following the period to which they refer:
   a) Monthly financial statements along with their corresponding explanatory notes and annexes.

3. Within a period of 5 (five) business days following their holding:
   a) Certified copy of the minutes of extraordinary shareholders' assemblies.

4. SUBSTITUTE in Chapter III - SENIOR MANAGEMENT AND SHAREHOLDERS, of Title II - INFORMATION REGIME of Part I - PENSION SAVINGS FUND ADMINISTRATORS of Book VI - INFORMATION AND DOCUMENTATION, Articles 152 and 152.1 with the following:

ARTICLE 152 (SHAREHOLDERS REGISTER).
The Central Bank of Uruguay will maintain a Shareholders Register of pension savings fund administrators, which will be public.

Regarding direct shareholders, what is provided in Articles 16 and 157.2 will apply.

Regarding indirect shareholders, changes must be reported to the Financial Services Superintendence within 10 (ten) business days following their occurrence, accompanied by:

1. In the case of changes in the shareholder chain: information required by item e) of numeral II) of Article 3.
2. In the case of a change in the controlling group or legal subject exercising effective control: the information required by item i. of Article 2 and by Article 3.

If deemed necessary, the Financial Services Superintendence may request additional information beyond that indicated above.

ARTICLE 152.1 (WEALTH INFORMATION AND SIGNIFICANT EVENTS REGARDING SHAREHOLDERS).
Pension savings fund administrators must present the following information regarding their direct shareholders who hold a participation equal to or greater than 15% (fifteen percent) of the capital and the legal subject exercising effective control:
a. Annually:
a.1 Natural persons: sworn declaration regarding their wealth situation with indication of assets, rights, and bank and non-bank debts, and the existence of encumbrances on them. The date of the sworn declaration cannot be older than 3 (three) months.

Such declaration must be accompanied by a notarial certification of the holder's signature. a.2 Legal entities: financial statements corresponding to the last closed economic year with an external auditor's opinion, provided they do not belong to the public sector, nor are they institutions supervised by the Central Bank of Uruguay.

The aforementioned information must be presented within a period of 5 (five) months counted from December 31 of each year. In the case of legal entities, it will refer to the last closed financial statement during the calendar year prior to the date of presentation. b. Within a period of 2 (two) business days following the occurrence or knowledge thereof: any significant change that could negatively affect the wealth situation or suitability of the shareholder or the legal subject exercising effective control, provided they do not belong to the public sector, nor are they institutions supervised by the Central Bank of Uruguay.

5. SUBSTITUTE in Chapter VI - OTHER INFORMATION, of Title II - INFORMATION REGIME of Part I - PENSION SAVINGS FUND ADMINISTRATORS of Book VI - INFORMATION AND DOCUMENTATION, Articles 157.2 and 158 with the following:

ARTICLE 157.2 (INFORMATION ON CAPITALIZATION OF EQUITY ITEMS).
Pension savings fund administrators must inform the Financial Services Superintendence of the capitalization of equity items - resulting from both the application of legal norms and resolutions of the shareholders' assembly - within 5 (five) business days following its occurrence, supplying the following documentation:
a. Certified copy of the resolution adopted by the shareholders' assembly. b. Accountant's certified justification of the corresponding accounting registration.
c. The necessary information for the update of the Shareholders Register referred to in Article 152.

ARTICLE 158 (INFORMATION ON NON-CAPITALIZED CONTRIBUTIONS).
Pension savings fund administrators must inform the Financial Services Superintendence, within a period of 5 (five) business days following each imputation to the "Contributions to Capitalize" account, the amount of resources irrevocably affected for the purpose of capitalization and the date on which such resources became available to them, attaching a certified copy of the assembly minutes from which the decision to increase capital arises.

CRISTINA RIVERO
Intendant of Financial Supervision
2023-50-1-02066