Conasev Resolution No. 041-2011

Lima, May 27, 2011

VIEWED:

File No. 2010008049 as well as Joint Report No. 300-2011-EF/94.06.1/94.05.2 dated May 19, 2011 presented by the Secondary Markets Department and the Information Technologies Office, with the favorable opinion of the General Management;

CONSIDERING:

That, Article 145 of the Securities Market Law, approved by Legislative Decree No. 861 and modified by Legislative Decree No. 1061, states that CONASEV approves the bylaws of the stock exchanges and their modifications, except for capital increases and others that CONASEV establishes through general character norms; as well as the internal regulations issued by the stock exchanges and their respective modifications;

That, through CONASEV Resolution No. 107-2010-EF/94.01.1, the Regulation of the Integrated Market through Intermediate Routing was approved, which allows the routing of proposals from foreign intermediaries to the Trading Floor of the Lima Stock Exchange, as well as those from local intermediaries to foreign trading systems;

That, Article 6 of said Regulation states that for the functioning of the Integrated Market through Intermediate Routing, the Lima Stock Exchange S.A. and CAVALI S.A. ICLV must present before CONASEV the documentation and information detailed in said article, which includes, among others, drafts of internal regulations, complementary norms, and other provisions related to the Integrated Market;

That, on the other hand, the Fourth Complementary Final Provision of said Regulation states that the additional operational provisions that the Lima Stock Exchange S.A. considers necessary to enable or facilitate the functioning of the Integrated Market must be sent to CONASEV for their respective evaluation and approval;

That, the Lima Stock Exchange S.A. has requested the modification of Article 2 and the incorporation of Title VII titled “Rules of the Integrated Market through Intermediate Routing” to the Trading Rules of the Trading Floor of the Lima Stock Exchange, approved by CONASEV Resolution No. 021-99-EF/94.10, as well as the approval of Complementary Provisions to said Title, for which it presented the information required by the Single Text of Administrative Procedures of CONASEV, approved by Supreme Decree No. 056-2002-EF;

That, the proposals presented aim to regulate the provisions that the Lima Stock Exchange S.A. must develop and establish, among others, regarding technological requirements, systems or control procedures to ensure that operations carried out on the Trading Floor through Intermediate Routing correspond only to cash operations, equity securities, and authorized persons, mechanisms to avoid short sales and other events, in order to limit market risks;

That, from the evaluation of the documentation presented by the Lima Stock Exchange S.A., it is considered advisable to approve the modifications to the aforementioned Trading Rules, as well as to approve the Complementary Provisions to the cited Title VII;

That, on the other hand, it should be clarified that currently the Complementary Provisions of Article 49 of the aforementioned Trading Rules do not require prior authorization from CONASEV for their application;

That, in accordance with the analysis carried out on the regulation applicable to the Integrated Market, it is considered that the Complementary Provisions regarding non-compliance in the settlement of operations as well as in the delivery or replenishment of margin guarantees, referred to in said Article 49, must require prior approval from CONASEV for their application, insofar as these aspects are relevant for the proper functioning of the market and risk prevention;

That, it is necessary to point out that the proposals for modifications to the Trading Rules of the Trading Floor of the BVL, approved by CONASEV Resolution No. 021-99-EF/94.10, as well as to Article 5 of said resolution, have been submitted to public consultation, through the CONASEV Portal, so that interested persons may formulate comments on the proposed changes, no comments having been received on the matter; and,

Being in accordance with what is provided by Article 2 letter a) and Article 11 letter c) of the Concorded Single Text of the Organic Law of the National Commission for the Supervision of Companies and Securities, approved by Law Decree No. 26126, as well as what was agreed by the Board of Directors of the National Commission for the Supervision of Companies and Securities met in session on May 23, 2011;

RESOLVES:

Article 1st.- Modify Article 2 of the Trading Rules of the Trading Floor of the Lima Stock Exchange, approved by CONASEV Resolution No. 021-99-EF/94.10, according to the following text:

“TITLE I: GENERAL PROVISIONS

Article 2.- Terms and Definitions

(…)

e) Exchange or BVL: Lima Stock Exchange S.A.

(…)

w) Company or SAB: Stockbroker Company of the Exchange.

(…)”.

Article 2nd.- Incorporate Title VII “Rules of the Integrated Market through Intermediate Routing” to the Trading Rules of the Trading Floor of the Lima Stock Exchange, approved by CONASEV Resolution No. 021-99-EF/94.10, according to the following text:

“TITLE VII: RULES OF THE INTEGRATED MARKET THROUGH INTERMEDIATE ROUTING

Article 73.- Object

This Title recognizes the application of the provisions of this Regulation established in the preceding Titles, insofar as they are applicable to cash operations with equity representative securities that are carried out within the framework of integration agreements with other Exchanges or administrators of trading systems. Such application will be supplementary to what is provided in this Title.

Likewise, the provisions related to the negotiations established in the Regulation of the Integrated Market through Intermediate Routing will be applicable to this Title.

Article 74.- Terms

1. Participating Exchanges: Stock Exchanges that sign market integration agreements.

2. Corresponsibility Contract: Agreement signed between a SAB and a Foreign Intermediary authorized to operate in a Foreign Trading System, for the negotiation of securities through Intermediate Routing.

3. Foreign Intermediary: Any intermediary duly authorized by the supervisor of the securities market of its respective country, that has entered into a Corresponsibility Contract with a SAB.

4. Local Intermediary: Brokerage Intermediary domiciled in national territory and authorized by the national regulator to participate in the negotiation of securities in the Centralized Negotiation Mechanism administered by a Participating Stock Exchange of the Integrated Market. In the case of the BVL, SAB authorized by CONASEV, authorized to enter buy and sell proposals into the BVL Trading Floor.

5. Procedures Manual: Document composed of the set of operational and technological procedures, documented and controlled, of the processes related to the Integrated Market through Intermediate Routing. In it, the objectives, scope, responsibilities, and activities of each procedure are detailed.

6. Integrated Market: That which originates from the signing of integration agreements between the BVL and CAVALI S.A. ICLV with the entities administering foreign trading systems and the respective central securities depositories, with the purpose of carrying out secondary offering and intermediation of the securities traded in the trading systems conducted by said entities in the countries where they have been authorized to operate, as well as allowing access of intermediaries authorized to operate in any of the referred trading systems, through Intermediate Routing, in the other trading systems.

7. Origin market of the security: When a security is registered in more than one centralized negotiation mechanism participating in the integration, the origin market of the security is considered to be that where the security was first registered.

Article 75.- Scope of the Integrated Market

1. Market Administration

The administration activities of each Centralized Negotiation Mechanism continue to be the responsibility of the respective Stock Exchange, administrator of said mechanism.

2. Trading Rules and Market Model

The negotiation of securities is carried out under the rules and/or market model of each Centralized Negotiation Mechanism where said securities are listed.

Thus, in the negotiation of securities listed in Foreign Exchanges, the conditions established by them will apply.

3. Market Access

Access to the market by Foreign Intermediaries will be direct, through their trading platforms and through proposal routing mechanisms, on behalf of and at the responsibility of the SABs with which they maintain valid Corresponsibility Contracts.

Regarding intermediate routing, adequate technological infrastructure will be available that guarantees the correct functioning of the components that form part of the routing solution. The characteristics of said technological infrastructure are described in the Procedures Manual.

4. Market and Type of Operations

The direct entry of proposals through proposal routing mechanisms referred to in numeral 75.3 will be carried out only to the secondary market of cash operations with equity securities.

5. Admitted Securities of the Integrated Market

From the set of securities listed on the BVL, the following may be included in the Integrated Market:

• Equity securities, such as shares, shares without voting rights, investment shares, ADRs, ADSs, participation units, and ETFs, or securities on stock indices, registered on the Exchange, whose listing request has been presented by the issuer itself.

• Equity securities, such as shares, shares without voting rights, investment shares, ADRs, ADSs, and foreign participation units or issued by foreign companies that carry out activities mainly in the country.

• ETFs, or securities on indices or baskets of shares, that within their components have local or foreign underlyings that carry out activities mainly in the country.

The BVL, in agreement and reciprocity with the other Participating Exchanges, may include the securities indicated above. Likewise, through Complementary Provisions, it may define the type of securities that within what is specified in this article will be traded in the Integrated Market.

Article 76.- Proposals Entered by Foreign Intermediaries

The acceptance and withdrawal of proposals entered by Foreign Intermediaries will be subject in general to what is indicated in numeral 75.2 of Article 75 of this Title and in particular to the conditions detailed below:

1. Type and Validity Conditions

Proposals from Foreign Intermediaries entered under the responsibility of the SAB, which meet the type and validity conditions established in the Complementary Provisions to Article 15 of this Regulation, will be admitted to the BVL Trading Floor.

2. Trading Hours

1. Proposals from Foreign Intermediaries entered under the responsibility of the SAB, which are compatible with the trading schedule established in the Complementary Provisions of Article 3 of this Regulation, will be admitted to the BVL Trading Floor.

2. The proposal routing mechanisms will be made available to the SABs during the hours in which Foreign Exchanges admit the entry of proposals in their respective markets.

3. There is no obligation on the part of the BVL to make the proposal routing mechanisms available to the SABs on non-working dates in the National Territory.

3. Market margin (price range)

Proposals from Foreign Intermediaries entered under the responsibility of the SAB, which are compatible with the market margin established in the Complementary Provisions to Article 20 of this Regulation, will be admitted to the BVL Trading Floor, under the same conditions in which said margin is applied to proposals entered directly through the Electronic Trading System.

4. Price indication (minimum price jump)

Proposals from foreign intermediaries entered under the responsibility of the SAB, which are compatible with the price indication established in the Complementary Provisions to Article 7 of this Regulation, will be admitted to the BVL Trading Floor.

5. Uncovered sales

Proposals for sale that are entered with the attribute of uncovered sale will not be admitted to the BVL Trading Floor for the Integrated Market.

Sales made using the proposal routing mechanisms of the Integrated Market that are subsequently identified as uncovered sales will be subject to the sanctions and procedures established for such cases in the Complementary Provisions to Article 21 of this Regulation.

6. Withdrawal of Proposals

Buy and sell proposals may be withdrawn under the conditions indicated in the Complementary Provisions to Article 8 of this Regulation.

7. Settlement Period

1. For securities listed on the BVL, the settlement period provided for in Article 15 of this Regulation and its Complementary Provisions will apply.

2. Cases of non-compliance in the settlement of operations will be subject to the procedures and sanctions indicated in Article 49 of this Regulation and its Complementary Provisions.

3. Without prejudice to what is indicated, in case of non-compliance in the delivery of securities from shareholders who do not reside in Peru corresponding to an operation carried out under the proposal routing mechanisms corresponding to the Integrated Market, the non-compliant SAB, with the consent of its counterparty, may request the Markets Department for an extension of the settlement period of the operation, to be determined by the Board of Directors taking as reference what is established in Article 49 of this Regulation, insofar as applicable. Immediately after such extension occurs, it must be communicated to the ICLV.

During the course of the additional period, the non-compliant SAB may regularize the non-compliance by delivering the securities of its client. Likewise, the non-compliant SAB may effect the regularization through a securities loan, a change of principal, or by purchasing such securities (in which case it must be registered as the selling principal in the non-compliant operation) so that the settlement takes place within the additional period referred to in the previous paragraph. In any case, the non-compliant SAB will assume the price differential and higher costs that this implies.

In case the regularization of the non-compliance requires the assignment of the SAB as the selling principal, or is executed through the assignment of a principal registered in CAVALI as the selling principal, the referred sale will cease to be considered as an operation of the proposal routing corresponding to the Integrated Market, for administrative, statistical, and settlement process purposes.

In the event that the non-compliant SAB does not comply with the delivery of securities during the course of the additional period or if the consent of the affected counterparty is not given, the non-compliant SAB may request the lifting of the corresponding suspension by constituting in favor of the ICLV a guarantee equivalent to 30% of the amount of the non-compliant operation. Such guarantee must be constituted through a bank deposit at the order of the ICLV or a bank guarantee in favor of the ICLV.

The guarantee referred to in the preceding paragraph will cover the price differential and higher costs that imply the acquisition of the securities, necessary for the settlement of the operation.

4. On the other hand, the delivery of securities may be subject to an extension of the settlement period as provided for in Article 9 of this Regulation.

In case an extension request for the delivery of securities is approved in accordance with what is provided in Article 9 of this Regulation, the approval of said request and the consequent constitution of the SAB as the selling principal will imply that for administrative, statistical, and settlement process purposes, the referred sale will cease to be considered as resulting from the proposal routing corresponding to the Integrated Market.

Article 77.- Access to the BVL Electronic Trading System

The assignment of User accounts in the Electronic Trading System is carried out by the BVL.

For each Corresponsibility Contract between a Foreign Intermediary and a SAB, the BVL will assign a User account in the Electronic Trading System.

Any proposal entered in the BVL Trading Floor by virtue of a determined Corresponsibility Contract will be identified with the User assigned to said contract.

The negotiation limit control mechanisms, which the BVL will make available to the SABs, may be applied to each Corresponsibility Contract through the User account created and assigned exclusively to the respective Corresponsibility Contract.

Article 78.- Suspension of Securities

1. Suspension of Trading of Securities Listed on BVL

When the trading of a security listed on the BVL Trading Floor is subject to temporary or permanent suspension by the BVL, it will proceed to exclude it from the Integrated Market applying the corresponding controls or filters, without prejudice to the actions it takes to disable the entry of buy and sell proposals by the SABs on said security. Likewise, it will proceed to inform of such fact, through electronic means, to the Participating Stock Exchanges.

The referred exclusion will be executed on the same business day that knowledge of the suspension of the trading of the security is taken.

2. Suspension of Trading of Securities Listed on Other Participating Exchanges

When the trading of a security listed on another Participating Exchange is subject to temporary or permanent suspension, the disqualification for the trading of said security will be the responsibility of the Stock Exchange where the security is listed.

Without prejudice to what is indicated in the previous paragraph, the BVL, after having been communicated of this fact, may apply the controls or filters it considers necessary to prevent the routing of proposals on the suspended security.

Article 79.- Suspension of Intermediaries

1. Suspension of Local Intermediaries

When by disposition of the regulator or competent authority, or by application of the provisions contained in this Regulation, a SAB is subject to suspension, the BVL will proceed to disable the entry of proposals into the negotiation system that are carried out by virtue of the Corresponsibility Contract that said SAB has signed with a Foreign Intermediary or to the user of the corresponding electronic negotiation system, and will inform the Participating Stock Exchanges.

2. Suspension of Foreign Intermediaries

When the BVL takes knowledge of the suspension (or equivalent administrative disposition) of a Foreign Intermediary in its home market, it will proceed to disable the entry of proposals into the negotiation system that are carried out by virtue of the Corresponsibility Contract that said foreign intermediary has signed with some SAB or the user account of the corresponding electronic negotiation system.

The disabling of the entry of proposals into the negotiation system that are carried out by virtue of the Corresponsibility Contracts will be temporary or permanent depending on the nature of the suspension applied.

Article 80.- Programming of Special Operations (Public Offerings, auctions, others)

When a Public Offering is made, such as a Public Acquisition Offer (OPA) or a Public Purchase Offer by Exclusion (OPC), the Exchange responsible for conducting the centralized negotiation mechanism where the security is traded must inform the occurrence of the event to the other Participating Exchanges.

The communication must be made immediately after the diffusion of the event begins in the local market (or simultaneously if the media allow it).

The information exchange mechanism between Stock Exchanges to be used for these events will be that indicated in the Procedures Manual.

The communication indicated in the previous paragraphs will be made without prejudice to the diffusion that the Exchange responsible for the negotiation mechanism where the security is listed carries out through its internet portal or other diffusion means whose access has been made available to the other Exchanges in advance.

Article 3rd.- Approve the Complementary Provisions corresponding to numeral 75.3 of Article 75, numeral 75.5 of Article 75, and to Article 77 of Title VII “Rules of the Integrated Market through Intermediate Routing” of the Trading Rules of the Trading Floor of the Lima Stock Exchange, approved by CONASEV Resolution No. 021-99-EF/94.10, according to the following text:

“Complementary Provision of numeral 75.3 of Article 75

Technology services, such as infrastructure, communications, security, provided by third parties, will include in their contracts and/or technical proposals service level agreements.

Operability will be backed by a business continuity plan, which will be approved by the BVL Board of Directors.

Complementary Provision of numeral 75.5 of Article 75

The following securities are included within the Integrated Market:

• Shares, shares without voting rights, investment shares, and securities on stock indices, registered on the Exchange, whose listing request has been presented by the issuer itself.

• Shares, shares without voting rights, and foreign investment shares or issued by foreign companies, that carry out activities mainly in the country.

• Securities on stock indices, that within their components have local or foreign underlyings that carry out activities mainly in the country.

Complementary Provision of Article 77

Limit control by working groups

1. Organization of Agencies and User Accounts in the Electronic Trading System

The organization of Users in the Electronic Trading System is composed of 3 instances related to each other hierarchically:

• Agency.

• Working Group.

• User.

Local Intermediaries and the BVL are identified within the Negotiation System at the Agency Level.”

• An Agency may contain one or more Working Groups.

• A Working Group may contain one or more Users.

User access to the Electronic Negotiation System and the actions each of them can execute are determined by the profile assigned to each of the three (3) corresponding instances (Agency, Working Group, and the User itself).

Relationship between Integrated Market Correspondence Contracts and Negotiation System Users

When a Foreign Intermediary sends proposals to the market administered by BVL under a given Correspondence Contract with a Local Intermediary, all such proposals will enter the Negotiation System associated with a user account assigned to said Correspondence Contract.

Such a User account belongs to the Local Intermediary (Identified in the Negotiation System at the Agency Level) and is in turn assigned exclusively to said Correspondence Contract.

Application of Limit Controls

The application of limit controls to each Integrated Market Correspondence Contract will be carried out at the Working Group level. For this reason, each user assigned to a Correspondence Contract will be created within an independent working group, so that the fixed limits will apply exclusively to the single user that said working group contains, and by extension to the Correspondence Contract associated with it.

For setting the corresponding limits, the Local Intermediary will have an “Administrator” user who will centralize the responsibility for assigning and administering the limit controls to be applied to each Correspondence Contract. If necessary, there may be two (2) or more Administrator Users.

2. Available Controls at the Working Group Level

The Local Intermediary may configure the following Limit Controls for the Working Group where each user assigned to a Correspondence Contract is assigned:

1. Maximum Total Amount: Maximum limit on the total sum of the amounts of proposals entered by the Working Group during the day, both for purchase and sale (valid and applied).

2. Maximum Net Amount: The maximum limit on the absolute value of the difference between: the amount of the sum of purchase proposals minus the amount of the sum of all sale proposals entered (valid and applied) by the Working Group during the day.

3. Maximum Purchase Amount: Maximum limit on the sum of the amounts of all purchase proposals entered during the day by the client (valid and applied).

4. Maximum Sale Amount: Maximum limit on the sum of the amounts of all sale proposals entered during the day by the client (valid and applied).

Note: The limits by Amount assigned to each working group will be expressed in New Soles (S/.). Proposals in United States Dollars (US$) will be subject to these limits according to the exchange rate entered into the system.

5. Maximum Amount per Proposal: Limit on the maximum amount allowed for the entry of an individual purchase or sale proposal by members of a Working Group.

6. Maximum Percentage Price Variation per Proposal: Limit on the maximum percentage variation in the price of a proposal with respect to the current quote, allowed for the entry of a proposal by members of a working group.

7. Minimum Liquidity

Ineligibility based on liquidity parameter:

• Assignment of an attribute or indicator (numeric) of liquidity, at the instrument level.

• Assignment of a parameter at the level of each working group that disables the entry of proposals for instruments whose liquidity indicator does not exceed the numeric value of said parameter.”

Article 4°.- Modify the first paragraph of Article 5° of Resolution CONASEV No. 021-99-EF/94.10, which approves the Regulations for Operations in the Stock Exchange Wheel of the Lima Stock Exchange, replacing it with the following text:

“Article 5°.- The provisions referred to in Article 13º of the Regulations for Operations in the Stock Exchange Wheel of the Lima Stock Exchange, will be communicated to CONASEV in accordance with the last paragraph of Article 145º of the Securities Market Law, Legislative Decree No. 861, except those dictated in accordance with Articles 5º, 9º, 18º, 21º, 26º, the first paragraph of Article 27º and Article 49°, of the aforementioned regulations, which for their application will require prior authorization from CONASEV

(…)”.

Article 5°.- This Resolution will enter into force the day after its publication in the Official Gazette El Peruano.

Article 6º.- Order the dissemination of this Resolution in the Official Gazette El Peruano and on the CONASEV Portal.

Article 7º.- Transmit this Resolution to the Lima Stock Exchange S.A.

Register, communicate, and publish.

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Michel Canta Terreros
President