CONASEV Resolution No. 038-2011

Lima, May 24, 2011

VIEWED:

The Joint Report No. 221-2011-EF/94.06.1/94.04.1 dated April 20, 2011 issued by the Secondary Markets Directorate and the Legal Advisory Office, with the favorable opinion of the General Management;

CONSIDERING:

That, through CONASEV Resolution No. 107-2010-EF/94.01.1, the Regulation of the Integrated Market through Intermediated Routing was issued, which, among other things, allows access and interconnection between intermediaries authorized to operate in any of the trading systems comprising the so-called Integrated Market through Intermediated Routing;

That, for the functioning of Intermediated Routing, foreign intermediaries and brokerage societies must sign correspondentship agreements in which the conditions and requirements regulated in the aforementioned regulation are established, mainly those relating to the responsibilities of each party, as well as other aspects and provisions that guarantee the proper functioning of said mechanism, and access and interconnection to the trading systems;

That, through letter GAFS-105/11 of March 8, 2011, the Lima Stock Exchange S.A. on behalf of the industry, requested CONASEV to evaluate certain improvements to the aforementioned Regulation, referring basically to the regime of the Special Representative, the relationship of the brokerage society with its client, and the minimum content of correspondentship contracts;

That, having analyzed the request of the Lima Stock Exchange S.A., and considering that CONASEV can establish measures with the aim of avoiding regulatory arbitrage, it is considered appropriate to introduce improvements to the aforementioned regulation;

That, it is necessary to highlight that the draft modification to the aforementioned Regulation has been submitted to a citizen consultation process, through the CONASEV Portal, so that interested persons can formulate comments on the proposed changes, no comments having been received on this matter; and

Being in accordance with the provisions of the Second Complementary Final Provision of Legislative Decree No. 1061, subsection a) of article 2 and subsection b) of article 11 of the Unified Text of the Organic Law of CONASEV, approved by Legislative Decree No. 26126, and in accordance with what was agreed by the Board of Directors met in session on May 16, 2011;

IT IS RESOLVED:

Article 1.- Modify paragraphs 3.5, 7.3, 12.6, 17.7, 18.2, 19.4, 19.5, 19.7.1, 30.3, 31.1 of their respective articles, as well as articles 13, 14, 15 and 16 of the Regulation of the Integrated Market through Intermediated Routing, approved by CONASEV Resolution No. 107-2010-EF/94.01.1, which shall be drafted as follows:

“Article 3.- Scope

(...)

3.5. Special Representative

(...)”

“Article 7.- Start of operations in the Integrated Market through Intermediated Routing

(...)

7.3. In the case of SABs, they must have: (i) Correspondentship agreement, and (ii) satisfactory results of the tests referred to in paragraph 12.3 of article 12 of this regulation.”

“Article 12.- Intermediated Routing

(...)

12.6. In the file of proposals formulated and operations carried out in the Stock Exchange Wheel registered by the BVL, each proposal entered through Intermediated Routing must contain the information that allows the identification of the Foreign Intermediary, as well as that which allows its traceability for supervision purposes.”

“Article 13.- Access of the Foreign Intermediary to the Stock Exchange Wheel through Intermediated Routing

13.1. For a Foreign Intermediary to be able to access the Stock Exchange Wheel through Intermediated Routing, the signing of the correspondentship contract with the SAB is required, in which the person or persons designated as Special Representative(s) will be specified.

Once the BVL receives a copy of said contract, it may enable access through Intermediated Routing.

13.2. The Special Representative is the person or persons with direct access to the electronic trading system of the Stock Exchange Wheel, BVL-EXS.

13.3. In the formulation of proposals in the BVL-EXS, the requirements and prohibitions established in the current Peruvian regulations apply.”

“Article 14.- On the Special Representative

The person or persons acting as Special Representative(s) must have the authority to perform in the country of origin functions equivalent to those corresponding to a local representative, within the organization of the Foreign Intermediary.”

“Article 15.- Change of the Special Representative

The SAB must communicate to CONASEV when it becomes aware of any of the following circumstances:

15.1. The termination of the function of Special Representative due to the conclusion of the labor and/or commercial link of the Special Representative with the respective Foreign Intermediary, or for any reason, in their country of origin, as well as the new appointments for said function.

15.2. The imposition of a sanction on the Special Representative in accordance with the regulations of the country where the Foreign Intermediary exercises activity, which results in the loss of the authority that supported their designation as Special Representative.”

“Article 16.- Responsibility of the SAB in Intermediated Routing

The obligations of the SAB are:

16.1. The SAB in the local securities market is responsible for the compliance of the obligations derived from the execution of operations carried out in the Stock Exchange Wheel by the Foreign Intermediary through Intermediated Routing, before the BVL, CAVALI and CONASEV.

16.2. In the signing of the correspondentship contract, the SAB is responsible for observing the minimum content established for said contracts.”

“Article 17.- Relationship of the SABs with clients

(...)

17.7. Knowledge of the legislation of the country in which their securities or funds are traded, cleared and settled by the realization of operations in Foreign Trading Systems.

(...)”

“Article 18.- Object of correspondentship contracts

(...)

18.2. Each SAB must send to CONASEV and to the BVL, without prejudice to communication as a relevant event, in accordance with the Regulation of Intermediation Agents, a copy of the correspondentship contract that it has celebrated with a Foreign Intermediary, as well as its modifications, within ten (10) business days following its signing or before it carries out operations through Intermediated Routing, whichever occurs first.”

“Article 19.- Minimum content of correspondentship contracts

(...)

19.4. Regime of responsibility of the Foreign Intermediary and local intermediary, indicating its scope in each case.

19.5. The obligation of the Foreign Intermediary to inform the SAB immediately about updates or modifications in the designation as official or authorized representative granted to the Special Representative.

(...)

19.7.1. Client knowledge of the applicable Peruvian legislation regarding the trading, clearing and settlement of operations with securities in the Stock Exchange Wheel.

(...)”

“Article 30.- Rules applicable to the clearing, settlement and custody of securities

(...)

30.3. The SABs will be responsible before CAVALI for the obligations derived from the clearing and settlement of the operations carried out with the securities traded in the Stock Exchange Wheel through Intermediated Routing.

(...)”

“Article 31.- Supervision

(...)

31.1. CONASEV may order the suspension of the offer or intermediation in the national territory of a value traded in Foreign Trading Systems when the security, transparency or integrity of the securities market is affected.

(...)”

Article 2.- Incorporate as the last paragraph of article 3 of the Standard on Contributions for the Supervision Services provided by CONASEV, approved by CONASEV Resolution No. 95-2000-EF/94.10, the following:

“For foreign issuers whose securities are registered in the Public Registry of the Securities Market by virtue of agreements on the integration of securities markets, the monthly or annual contribution rate to be applied shall be zero (0) percent; provided that in the countries or foreign trading systems comprising the integrated markets, an exemption mechanism or similar is applied to issuers of securities that are registered in the Public Registry of the Securities Market.”

Article 3.- This Resolution shall enter into force the day following its publication in the Official Gazette El Peruano.

Article 4.- Order the dissemination of this resolution in the Official Gazette El Peruano and on the CONASEV Portal.

Register, communicate and publish.
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Michel Canta Terreros
President